Whether you’re buying your first home, or you’ve bought and sold multiple properties, there are certain mistakes that you should avoid making and questions that you should ask. Being informed about the properties that you’re considering and the most responsible way to go about making a purchase can help ensure that you don’t come up on the losing end of your real estate deal. So here’s a look at a few questions that you should ask before you even consider signing on the dotted line.
What’s My Budget?
Before you even start looking for homes on a real estate app or calling local real estate agents to ask about listings, you need to find out how much home you can afford. While a mortgage professional can give you a pre-approval letter that tells how much they are willing to lend you, that doesn’t necessarily that you should buy a home that costs that much. For instance, let’s say you a mortgage lender approves you for $150,000. While you can certainly buy a $150,000 home, you need to figure out the other parts of your budget. Homeowner’s insurance, maintenance costs and HOA fees all need to be taken into consideration when you’re figuring out your budget. Of course, that doesn’t include existing debt such as car payments, student loans, credit cards and all of your monthly utilities. Be ready to stick to your budget once you’ve established it.
Understanding what means the most to you in the home you’re going to buy will help you eliminate potential properties from your wish list. For instance, if you have children or plan on having them, you probably want to ensure that you buy a home in a good school district. If you love being outdoors, you’ll want to find a home that has a spacious yard with plenty of room for you to enjoy. Before you start house hunting, make a list of your must-haves and rank them by order of importance to you. The odds of you finding a home that checks all of the boxes on your list is pretty slim. However, when you know what features mean the most to you, you will be able to eliminate properties that don’t offer what you’re looking for.
Will You Work with a Real Estate Agent?
If you’re about to start house shopping, you may think that you should just find some properties that interest you in a real estate app or look for “For Sale” signs in the yard of a neighborhood you like before calling the real estate agent who is listed on that property. However, that agent works for the seller. According to both state and federal real estate laws, the agent who represents the sellers have a fiduciary responsibility to them. That means that when they negotiate on the price, they are legally obligated to do what is best for their clients. Instead of trying to represent yourself against a trained real estate agent, you’re better served by finding an agent to represent you. This agent can get information about any properties you’re interested in and will negotiate on your behalf when it comes time to put in an offer.
How Old is the Roof?
Once you’ve narrowed your house hunting search down to a couple of properties, you can start gathering information on them. One of the most important things to find out is how old the roof of the home is. Roofs, no matter the type, are an expensive part of any home. In many states, the sellers are required to list the age of the roof on a form called the “Property Disclosure Form.” There will be lots of information about the property on that form, including the age of the roof. The sellers and their agent are legally bound to provide accurate information on those forms, so you can trust the fact that they’re being honest. If you find out that the roof of a home you’re interested in will need replaced soon, you can adjust your offer accordingly or walk away altogether.
Is the Home in a Flood Zone?
A home’s position in a flood zone has an impact on multiple aspects of the deal. Obviously, you don’t want to lose everything in a flood, so if you’re looking at a property that is prone to flooding, you may lose interest quickly. However, there are also financial ramifications of purchasing a home in a flood zone. FEMA designates certain areas as flood zones based on data that extends back 100 years. If a home resides in an area that FEMA consider a flood zone, you will be required to carry flood insurance on the property. In many areas, flood insurance is incredibly expensive and can have a major impact on your monthly budget.
Why is the Seller Selling?
Motivation matters when selling a home. For instance, a couple who is just looking to downsize into a smaller space may be less motivated to sell than someone who is forced to sell because of a job relocation. While you may not want to take advantage of anyone, understanding how motivated someone is to sell their home can give you a better position when you start negotiations. Highly motivated sellers may be willing to take a lower offer than someone who is just looking to move based on convenience. Knowing why someone wants to sell their home is a key piece of the puzzle before you start putting together an offer sheet.
What’s Included in the Sale?
In most states, fixtures are considered part of the home and are included in the sell. That means that items that have been affixed to the property such as ceiling fans, fireplace inserts and other attached fixtures are generally included in the purchase. However, if a seller is looking to downsize or wants to move into a new home without having to pack much may include furniture and appliances in the sell. Make sure that you gather information about what items are included in addition to the home itself. Also make sure that the seller intends to leave any fixtures before making an offer.
How Long Has the Home Been for Sale?
The longer a home sits on the market, the less it’s worth in the eyes of potential buyers. While this question is largely contingent on the type of market in the area you’re shopping in, there can be other factors that cause a home to stay on the market for an extended period of time. Homeowners regularly overvalue their home. While they may have developed sentimental attachment to a property, that value doesn’t translate to dollars and cents. If you’re interested in a home and find out that it’s been on the market for twice as long as other homes that sold, it may be overpriced. If you like the property, don’t be afraid to put in a lower offer and find out how motivated the sellers really are.
How’s the Neighborhood?
You can change the windows, the paint color and the roof on any home. You can’t change the neighbors. While the sellers may not want to come out and tell you that the neighbors are rude and nasty, there are plenty of other ways to find out. When you and your real estate agent set a time to go look at the home, consider getting there a few minutes early. While you’re waiting, take a walk around the neighborhood and see how people act. If they seem grumpy, you may want to consider finding a home somewhere else.
Purchasing a home is a major decision, and major decisions should only be made after you’ve become thoroughly educated on your options. The more information that you gather, the better position you will be in to get the best deal possible. While buying a home is a financial commitment that generally requires decades to pay, you don’t want to spend your money buying a home that you aren’t going to be happy with. Instead, find out as much as you can about the home and the surrounding area in order to ensure that you’re as happy as possible with the home that you choose.