Pismo Beach, CA – Buying a Home – The Surprising Results to a Survey
Zillow recently took a survey of prospective home buyers asking them questions regarding purchasing a home. They found that 42% thought that homes typically appreciate about 7% a year. However, the “normal” appreciation of homes in most areas is around 2 – 5% annually. 41% of the respondents thought that mortgage insurance was required, regardless of how much money was put down in the down payment. In reality, no mortgage insurance is required if a borrower puts down at least 20%. The mortgage insurance protects the lender should a borrower default on the loan. 37% thought that hazard insurance is optional. The fact is that if you have a loan on a house of any size, the lender will require hazard insurance, and it’s still a wise decision to have hazard insurance even if you own the house outright. A house is a big investment to lose to a fire!
56% of the respondents were confused as to what an appraisal is for and thought that the appraisal was to determine the condition of the house, which is actually revealed by a home inspection. The appraisal gives a value of the house on the date of the report. A buyer would want an appraisal to confirm they’re not paying too much for the house and a lender will require an appraisal to determine the amount they will lend on the house.
Almost half of the respondents (47%) did not understand when they actually became the owners of the home, thinking it was after the contract was signed and accepted by the seller. In actuality, that is when escrow is opened and the house is “pending.” Another party can not submit a better offer and “bump” the first party out so the buyer is protected in the buy until escrow closes or until the buyer cancels the escrow in writing. Title to the property actually transfers at the end of escrow when everything in the contract is completed and the documents are recorded at the county court house.
87% did know that closing costs are negotiable and can vary bank by bank.
We love working with first time homebuyers, and if you have questions or are interested in buying a home, contact us either by calling or texting us at 805-709-8535 or by emailing us at team@morristeamrealtors.com.
