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Can You Make It Through This Really Hard House-Buying Quiz?

Buying or selling a house can be pretty intimidating. California REALTORS® are Champions of Home who can not only help you navigate the buying and selling process but also help make it a safe and enjoyable journey.

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  1. So you’ve seen your dream house. What’s one thing you NEED to make an offer? 
    Correct
    Incorrect
    A pre-approval letter 
    Correct
    Incorrect
    A 20% down payment 
    Correct
    Incorrect
    A signed offer 
    Correct!
    Wrong!

    A signed offer

    While a preapproval letter and a 20% down payment can make your offer more attractive, all you really NEED for an offer is the signed offer itself (but you’ll need to pay your earnest $$ pretty quickly if the offer is accepted).

    A signed offer
  2. WTH is a comparative market analysis? 
    Correct
    Incorrect
    An assessment that determines if real estate is actually your best investment
    Correct
    Incorrect
    Figuring out which neighborhood gives you the most bang for your buck
    Correct
    Incorrect
    ...Deciding which shopping market is cooler to live next to? *help*
    Correct
    Incorrect
    Comparing a home to similar homes in the area to figure out its value
    Correct!
    Wrong!

    Comparing a home to similar homes in the area to figure out its value

    When you find your *dream house,* having an expert do a comparative market analysis of similar homes in the area can help you decide how much $$ you should offer for it.

    Comparing a home to similar homes in the area to figure out its value
  3. A pest-control inspection report (i.e., an “Is this house riddled with a billion termites?” report) is REQUIRED by law.
    Correct
    Incorrect
    True
    Correct
    Incorrect
    False
    Correct!
    Wrong!

    False

    Pest-control inspection reports aren’t required by law, but experts usually recommend one and mortgage lenders might require this extra step (no one wants to find out they have a crazy expensive termite problem down the road). Buggies = grossies, so act accordingly.

    False
  4. What does PITI stand for? 
    Correct
    Incorrect
      Principal, interest, taxes, and insurance 
    Correct
    Incorrect
    Price, interest, terms, and increment 
    Correct
    Incorrect
      Principal, investment, target, and inflation 
    Correct
    Incorrect
     ...Professional irrigators tangoing illegitimately?  
    Correct!
    Wrong!

    Principal, interest, taxes, and insurance

    PITI is a mortgage-payment breakdown, and it stands for principal, interest, taxes, and insurance. It usually reflects the total monthly amount you have to pay your lender as your mortgage payment.(so will be more than just the loan amount and interest). It usually has very little to do with the tango.

    Principal, interest, taxes, and insurance
  5. You decided to do this thing called “waiving the inspection contingency” while making an offer on a home. This basically means:
    Correct
    Incorrect
    You have to make all repairs to the home before close of escrow if your offer is accepted
    Correct
    Incorrect
    You can’t back out of the purchase regardless of what you find during the house inspection
    Correct
    Incorrect
    You agree not to have the home inspected before making the offer
    Correct
    Incorrect
    All of the above
    Correct!
    Wrong!

    You can’t back out of the purchase regardless of what you find during the house inspection

    Many home-purchase agreements include an inspection contingency that allows buyers to back out of the purchase agreement if an inspection reveals something they’re not into. After the contingency is waived, if the buyer finds something in an inspection that they don’t like, they usually can’t cancel the purchase (IOW, if your dream house’s foundation is made of silly putty and spider eggs, you’re still committed…yikes!). No inspection contingency = accepting a large amount of risk in the purchase, so def talk to an expert before deciding to do this.

    You can’t back out of the purchase regardless of what you find during the house inspection
  6. You find a ~slammin’ pad~ you HAVE to buy, and you’re not alone — 12 other people want it too. Does this indicate that you’re in a seller’s market or a buyer’s market?
    Correct
    Incorrect
    Buyer's
    Correct
    Incorrect
    Seller's
    Correct!
    Wrong!

    Seller's

    When a seller gets a bunch of offers on their home, it often means you’re in a seller’s market. Translation: Competing buyers are likely to push the offer prices of the home up much higher than the seller might otherwise have received. Knowing whether you’re in a seller’s or buyer’s market can be SUPER helpful for determining what to offer, so getting help from an expert who knows the market trends can definitely make this easier.

    Seller's
  7. You’re at your mom’s cocktail party, and someone says they’re “in escrow.” You say:
    Correct
    Incorrect
    “Ah! So you’ve signed a purchase agreement with the seller, and your earnest money has been given to a third party? Hmm? Oh, no, I always talk like this.”
    Correct
    Incorrect
    “By Jove! You’ve made an offer and submitted it to lenders for review in order to obtain a preapproval letter! How terribly spiffing!”
    Correct
    Incorrect
    “The seller has obtained your down payment, and you’ve begun occupying your new home. Congratulations, my good man!”
    Correct
    Incorrect
    “Sorry, I don’t eat snails. Mom, can I go now?”
    Correct!
    Wrong!

    You’ve signed a purchase agreement with the seller, and your earnest money has been given to a third party

    Being in escrow means your offer has been accepted by a seller, and your earnest money will be held until closing in an escrow account run by a third-party escrow company agreed upon by both the seller and buyer. Before closing, various steps will usually need to be completed like a bank appraisal, inspections, financing, and approval of disclosures. Being in escrow does NOT mean you start talking like a Dickens character, however.

    You’ve signed a purchase agreement with the seller, and your earnest money has been given to a third party
  8. You decided to go for a bit of a fixer upper (AKA, a garbage fire nightmare pile). Which of the following may cost you the most to fix?<br>
    Correct
    Incorrect
    Replacing the roof
    Correct
    Incorrect
    Repairing the sewer or septic tank system
    Correct
    Incorrect
    Rewiring the house
    Correct
    Incorrect
    Repairing a cracked foundation
    Correct!
    Wrong!

    Repairing the sewer or septic tank system

    Before you buy a fixer upper, it’s important to know what you’re getting yourself into, because some of this stuff can be pretty expensive. The average cost of repairing the sewer or septic system is $25,000–$50,000, replacing the roof is $10,000–$30,000, rewiring the house is $3,000–$20,000, and repairing a cracked foundation can often cost between $1,900–$6,300 (BTW, this can all cost even more… yikes). An expert can help you get the inspections and estimates you need to make an informed judgment before it’s too late, so you don’t bite off more than you can chew.

    Repairing the sewer or septic tank system

All images courtesy of iStock.

Luckily, you don’t need to know EVERYTHING in order to buy a home. Since REALTORS® abide by a code of ethics that they've sworn to uphold, they can make this whole process better. So find a California REALTOR® at ChampionsofHome.com to help guide you through the adventure.

 
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