Homebuyer Incentives: Learn how to maximize buyer incentive

Learning how to buy a home and use buyer incentives

STEP 1 - GET PREQUALIFIED

Start your home buying journey with a mortgage pre-approval. It helps you understand your budget and demonstrates to sellers that you're a serious, qualified buyer. This step can make you more competitive, especially in a hot market. Many sellers and listing agents will make it a requirement to submit an offer along with a pre-approval or prequalification letter from a bank.

A great place to start is at Lending Tree. Lending tree enables prospective buyers to get prequalified without it impacting your credit score. In addition, Lending Tree works with dozens of lenders so you can find the right mortgage option for you. Get your prequalification today by visiting LendingTree.com

STEP 2 - SEARCH AND RESEARCH

When searching for your home, it's important to utilize all available search options. There are dozens of real estate websites you can use to search for a home, including Zillow, Trulia, Homes.com and Realtor.com.

Many websites will offer the ability to track certain price points in certain cities, towns and neighborhoods. Make sure to save your desired price range and locations into these free online services so that you are automatically contacted once homes that fit your criteria are listed on the internet.

In terms of valuation and understanding a homes worth, there are many tools you can use. Many of those same websites offer Automated Value Models ("AVM"). While AVMs are not perfect indicators of a home's value, looking at several AVM valuations should give a good barometer of value.

STEP 3 - SUBMIT AN OFFER / CONTRACTUAL

If you are using a buyer's agent, the buyer's agent will have the necessary forms needed to submit an offer. Depending on the state, the offer form outlines the specifics of the deal that the Seller will need to countersign. The offer form will be utilized by an attorney or title company (depending on the state) to create the purchase and sale agreement.

For those not using a real estate agent, we are in the process of creating a membership only website that will provide necessary forms to be used for the home purchasing process (Coming Soon)

STEP 4 - HOME INSPECTION AND CONTINGENCIES

The offer form should include a home inspection contingency. Home Inspections are an important step in the home buying process as it allows a buyer to use a license professional to inspect the property and find potential issues. It's important to note that an inspector is not able to inspect all facets of the home. That being said, there are many valuable things an inspector can test including electrical, HVAC, radon levels, air quality, etc.

Home Inspectors cannot provide an opinion of value to fix certain issues. It is important to speak with your inspector about the need for 3rd party contractors, if needed, to come in after the inspection to provide quotes on any issues that may arise during the inspection process.

STEP.5 - APPRAISAL AND LOAN COMMITMENT

If you are using a mortgage to finance the purchase of your home, the bank will need to conduct an appraisal. The appraisal is outsourced to a third party appraisal company. When an appraisal is conducted, an appraiser will typically tour the property in person and subsequently put together a full appraisal report with comparable sales and listings within close proximity to the home you are buying. Once the appraisal report is completed, a copy is also sent to the buyer as well as the bank. The appraiser will give their opinion of value on the property. It is important that this value is equal to or greater than the purchase price. Otherwise, a bank will typically not lend the full amount need to purchase the home.

In addition to the appraisal, the bank will need to provide the final loan commitment to the borrower. This is a much more thorough process compared with the original pre-qualification.

STEP 6 - CLOSING

We The final step is closing on your new home! Most of the upfront legwork leading up to finalizing the necessary paperwork will be conducted by the closing attorney or title company (depending on whether you are buying in an attorney or title state).

If you are financing the transaction, a bank will provide the funds on the day of closing. The buyer will be responsible for the remaining down payment needed and any additional expenditures such as closing costs. Closing costs vary from transaction to transaction but typically range between 1-2% for the typical residential transaction

Prior to closing, it is important to do a final walk through within 24 hours of the closing date. The closer the final walk through is to the actual closing, the better. You don't want to close on a property that may have had any last minute issues you are unaware of.

Frequently Asked Questions

Please reach us at if you cannot find an answer to your question.

What is a Buyer Incentive / Buyer Concession?

A Buyer Concession, or sometimes referred to as a Buyer Incentive, can be offered by a Home Seller to a Home Buyer. The Buyer Incentive can be used in a variety of ways by the Buyer. Some of the more common ways a Buyer Incentive can be used are to reduce the purchase price, to pay for a portion or all closing costs and/or to pay for a buyer’s agent. Some lenders will allow for the Buyer Incentive to be used towards a rate buy down, which can reduce your monthly mortgage payment temporarily or permanently throughout the course of the loan.

Why are sellers now offering a Buyer Incentive?

The National Association of Realtors has settled litigation, and as part of that settlement, Listing Agents can no longer advertise a Buyers Agent’s commission on MLS. As part of the settlement, prospective buyers of real estate who elect to work with a Buyer’s Agent will need to sign an agreement with the Buyer’s Agent in advance of looking for a home. Listing Agents are allowed to offer Buyer Incentives or Buyer Concessions, which a buyer can use in a variety of ways, including paying their broker.

Do I have to use a Buyer’s Agent?

No, you do not have to use a Buyer’s Agent to buy a home. Buyers can choose whether they want to have Buyer Agent representation or not. If you elect to use a Buyer’s Agent, the Buyer Incentive can be used entirely, or in part, to pay for the Buyer Agents fee.

How Can BuyerIncentive.com Help Me?

Now that the National Association of Realtors settled, Sellers and their Listing Agents cannot set and advertise Buyer Agent commissions on MLS. Some Sellers have been offering Buyer Incentives or Buyer Concessions as a replacement mechanism to incentivize Buyers to purchase their home. The Buyer Incentive can be used in a variety of ways, including paying a Buyer’s Agent if the buyer chooses to do so. For buyers who choose to not be represented by a Buyer’s Agent, BuyerIncentive.Com has created a road map to assist Buyers in their home purchasing journey.

How to Buy a Home?