With the kids back to school, you can practically smell knowledge in the air – along with the scent of pumpkin spice! But education is not just for kids, especially if you’re thinking about buying or selling a home. Whether you’re a first-time buyer wondering where to start or you’re a repeat buyer who could use a “refresher course” on the process, we’ve got answers to some of the most common real estate questions.

What is the first step in the home buying process?

Getting pre-approved for a mortgage is a great first step in the home buying process because it determines how much you can borrow. Knowing how much home you can afford helps you narrow down your search and avoid wasting time looking at homes that are not within your budget. In addition, the loan estimate from your lender will show you how much money is required for the down payment and closing costs so you can plan accordingly. And finally, getting pre-approved will let sellers know you’re a serious buyer and can expedite the process.

How much do I need for a down payment?

You may have heard that a 20% down payment is “required” to buy a home, but that is no longer true. That percentage is the cutoff many lenders use for requiring private mortgage insurance (PMI) on a conventional loan. However, there is no “one size fits all” amount for a down payment. In 2025, the median percent down payment for all home buyers was 19%, but first-time home buyers put down an average of 10%. According to the National Association of Realtors, repeat buyers made down payments of 23%, on average. This makes sense since repeat buyers (at a median age of 62) have had more time to build equity in their home, along with personal wealth. Some of today’s conventional loans allow down payments as low as 3% to 5%. However, the lower the down payment, the higher your monthly mortgage payments and mortgage insurance will be. It really comes down to what you can afford, and what makes the most sense for your personal finances. Talking to a lender and getting pre-approved for a mortgage can help you make the best decision.

What is a seller’s market?

When the demand for homes increases, it creates a seller’s market, meaning prices go up and sellers can typically get more for their homes. Increased demand can be caused by several factors:

• Low inventory – Fewer homes on the market due to lack of new construction and/or less people wanting to sell.
• Economic factors – When the economy is thriving and jobs are plentiful, home prices tend to increase, especially if an area gets an influx of new businesses and residents.
• Interest rates – A downward trend in interest rates improves affordability, creating more buyer interest, especially for first-time buyers who can afford bigger homes.

What is a buyer’s market?

When the demand for homes decreases and prices decline, it creates a buyer’s market. Again, there are several factors that can cause this to happen, including:

• High inventory – When new subdivisions are built in an area, this can cause downward pressure on prices of older homes in the area.
• Economic disruption – If one or more large employers closes and lays off their work force, the local market often sees less demand and lower home prices.
• Interest rates – When interest rates are trending higher, the amount of money people can borrow to buy a home is reduced because the cost of money is higher. This reduces the number of potential buyers in the market and therefore home prices drop to meet the lower level of demand.

What is happening with interest rates, and should I wait for mortgage rates to fall before buying?

As of September 28, 2026, the national average interest rate on a 30-year mortgage increased to 7.22%, while the average rate for a 15-year fixed-rate mortgage rose to 6.6%. While we were all hoping interest rates would fall like the autumn leaves, the Federal Reserve increased the federal funds rates for the first time in three years due to inflation and rising energy costs, among other factors. While the Fed doesn’t directly set mortgage rates, it does impact them, and some experts believe this increase could push mortgage rates even higher. With that in mind, you might consider buying now if you are in the market, before another potential increase occurs.

However, long-term forecasts suggest that once inflationary pressures ease, rates could slowly decrease closer to the low 6% or upper 5% range over the next five years. Economic forecasters project average rates of 6.20% to 6.7% next year.

Sometimes it’s impossible to “time the market” because you need to make a move. Here’s some sage advice: Timing a home purchase around interest rates is less about predicting market lows and more about aligning personal financial readiness with strategic loan structuring. One saying in the industry is “marry the house, date the rate – you can refinance if rates drop.” It all boils down to your personal and family needs. Keep in mind, you can and should shop around for competing loan estimates among lenders.

What’s the average credit score I need to buy a home?

The majority of lenders require a FICO score of 620 or higher. Individuals with higher credit scores pose a lower risk to the lender, which means they can require a lower down payment and better interest rates. On the other hand, those with lower credit scores may need a higher down payment.

How much will I have to pay in closing costs?

Closing costs are the fees and expenses required to finalize a real estate transaction. Whether you’re buying or selling a home. Some fees are paid to your lender, and others are paid to appraisers, inspectors, and title companies. Closing costs typically range between 2% to 5% of the home’s purchase price. Seller closing costs are usually higher (6% to 10%) because they include the commission they’ve agreed to with their agent to sell the home, along with 2% to 4% of the sale in transfer taxes, property taxes, and other real estate fees.

Who pays the real estate agent fees?

Real estate agent fees are not set by law and are fully negotiable. Buyers and sellers each agree on fees directly with the agent they choose to represent them. Sellers are no longer automatically responsible for paying the buyer’s agent, but many still choose to offer buyer agent compensation as part of the overall marketing of their home. On the buying side, it’s common for buyers to have their agent include a request in the offer asking the seller to pay their agent’s commission on their behalf, and many sellers agree to it. Your agent can walk you through your options and what’s typical in your market.

Are home inspections required?

Inspections are not legally required (unless you are financing your home with a FHA or VA loan), but they are strongly recommended before purchasing a home. Inspections can reveal defects in the home that are not easily detected, helping the buyer avoid costly surprises.

What are common mistakes to avoid?

Some common mistakes can delay or completely derail a transaction. For buyers, these missteps include failing to get pre-approved, overextending financially, or not getting a thorough home inspection. For sellers, the most common mistakes are overpricing their home, ignoring staging or curb appeal, or choosing an agent that doesn’t have experience with the local market.

Ready to take the next step?

Of course, these are just some of the many questions you may have about buying or selling a home. Real estate transactions can be complex, but they don’t have to be difficult. Understanding the basics, doing some upfront research, and working with a qualified real estate agent can help you buy or sell with confidence and avoid costly mistakes. Our team at Cornerstone Real Estate knows the local markets and are ready to answer your questions and walk you through every step. Reach out to us today to get started.