09/06/2024
EVERY QUESTION BUYERS SHOULD ASK BEFORE PURCHASING A HOME
Buying a home buyer is a fraught process these days. Not only are home prices and mortgage rates high, but buyers are facing new buyer's agency agreements that they may not understand. Regardless of the obstacles, buyer's agents aim to make the purchase process as smooth as possible for their clients. That's why we're highlighting this consumer-focused article — it lays out all the most important questions your buyer clients should ask when looking for the home of their dreams. Feel free to share it with them, or simply use it as a reference point when guiding them on their journey.
Questions buying a house - A lot of research goes into buying a home, especially if you're doing so for the very first time. And because the house-hunting process can be exciting and fast-paced, potential buyers may get so caught up in the emotion of it all that they could overlook the important questions that need to be asked.
Whether it's your first time buying a home, or you're on the lookout for a vacation or income-generating property, make sure you're prepared with a list of questions to ask yourself, your mortgage broker and your real estate agent.
Laying the Foundation: Essential Questions for First-Time Buyers
No matter how much research you do, nothing will prepare you for homebuying like a trial by fire. First-time homebuyers are in a unique position, and real estate agents will understand if their client comes to meetings and open houses with a lot of questions.
"I've seen situations where asking the right questions up front could have saved a lot of trouble," Douglas Elliman agent Evangela Brock, based out of Greenwich, Connecticut, told Homes.com.
Why is now the right time for me to buy?
Why is owning a home right for me? Why not continue renting?
What will I gain as a homeowner? Is there anything I will lose?
Beyond the Basics: Questions Savvy Homebuyers Should Ask
Homebuyers who've been through the process before come to house hunting with a slight advantage. Experienced homeowners may have learned a thing or two from their previous round in the saddle, but that doesn't mean they have nothing to learn.
What are some things from my previous homebuying experience that I want to avoid? What lessons did I learn?
Why do I want to buy a home again?
What is my goal in purchasing a home this time around?
How has the market changed since I last purchased a home?
What about the current market makes it the right time for me to buy?
What challenges might the current market present?
Am I Financially Prepared to Buy a House?
This is likely the most important question that a buyer will ask themselves during the homebuying process. After all, Pew Research Center claims that "an owned home is typically the most valuable asset for U.S. homeowners." It's important to really consider your finances before making what will likely be your greatest financial commitment. Some questions that may help you get the ball rolling to decide if you're ready for homeownership might include:
Is my income steady? Can I anticipate this income or higher for the foreseeable future?
What do my debts look like? How long will I have these debts?
What is my credit score? Will my credit score get me a good interest rate?
Do the benefits of owning a home outweigh the risks of carrying a mortgage?
Does renting a home make more financial sense?
After you've established that you are indeed financially prepared for homeownership, you can start to ask yourself other questions, too.
What kind of home do I want? Do I want a single-family house, a townhouse or a condo?
Which neighborhood do I want to live in?
Do I want a fixer-upper or something move-in ready?
Do I need backyard space? A garage? A basement?
Do I see myself in this area for the foreseeable future?
How Much House Can I Afford?
There are a lot of factors that a homebuyer will have to take into consideration when thinking about what they can afford. Generally speaking, a buyer will need to know their household income, monthly debts, cash on hand for a down payment and credit score.
Before you apply for a loan, run the numbers to get a general sense for how much you can expect to pay each month. Be aware that you may be approved for a loan that greatly exceeds that which you can comfortably afford. Just because you're approved for a certain purchase price, doesn't mean that you must look for homes in that range.
Understanding Down Payments, Closing Costs and Mortgage Options
Asking questions during the financial chapter of the homebuying journey is expected. Lenders understand that buyers will likely not understand every aspect of a mortgage, and they're ready to take your questions. In a time like this, it's best not to hold back any questions that pop up.
How much money should I have set aside for a down payment?
Are there any assistance programs available to me?
How much can I expect to pay in closing costs?
Are there any other fees I'm expected to pay? (Such as an origination fee.)
Is a 30-year or 15-year mortgage right for me?
Do I need mortgage insurance?
What is my interest rate? What is my APR?
What will my monthly payment be?
Are you running a hard credit check?
Property Details
After a buyer is pre-approved for a loan and understands the financial aspect of homebuying, it's time to get to the fun part of the search: actually looking at homes.
You may get started by browsing homes for sale, but this is the point at which you'll want to hire a real estate agent. According to the Profile of Home Buyers and Sellers conducted by the National Association of Realtors, 71% of homebuyers interviewed just one Realtor during their search.
Finding an experienced real estate agent could make or break your experience, so it might serve you to shop around a little before committing to the first person you interview. If you have a bad feeling or just don't vibe with someone, there's no harm in interviewing someone else.
Uncovering a Home's History and Condition
Even if a home looks great, you'll want to investigate further before the official inspection. If your real estate agent doesn't know all the answers to your questions, they'll either ask the seller or research the answers for you. Make sure to write down any questions that don't get answered, that way you can send them a follow-up email.
How long have the current owners lived in the house? Why are they selling now?
How long has the house been on the market?
What are comparable homes in the area going for?
When was the home built?
Have there been any major renovations or additions?
Were renovations and additions completed up to municipal code?
Is there a warranty on any renovations and additions?
If the home is old, are any of the fixtures or moldings original to when the house was first built?
Was the home built before 1978? If so, was any existing lead paint removed?
Does the home have lead pipes?
Have there been any leaks?
What's the flooding history?
Is the area prone to natural disasters?
Have there been any homeowners insurance claims filed in the last seven years?
Is the home on municipal sewer or a septic tank?
How old are the windows?
How old are the appliances? Which appliances are included in the sale of the home?
Do the smoke detectors work? Is there a functional carbon monoxide detector?
How much do the utilities typically cost per month?
Do the walls have any soundproofing?
What are the property taxes?
Are there any shared communal spaces? (This is especially important in a townhouse or condo building.)
Major Systems and Upcoming Repairs
No house is perfect. However, the homebuyer shouldn't be blindsided with major repairs after the deed has been transferred to their name. Sellers may not always be forthcoming with information about the state of a home, so it's important to ask the right questions so that you can be well informed. If there are structural issues, the cost of those repairs may fall on you – which might impact the price you're willing to pay for the house itself.
Are there any recent repairs that were completed on the home? If so, what were they?
Was a warranty issued for the repairs that have been completed?
Are the sellers willing to make any further repairs after inspection? Or is the home being sold "as is"?
How old is the roof? When was it last repaired or replaced?
How is the house heated and cooled? How old are those systems and how well do they work?
How old is the electric? Water heater?
Is there any history of mold? What about asbestos?
Lifestyle
Even if a home is perfect, a buyer will need to consider how their lifestyle fits in with the move. "You're not just buying a house," Brock said. "You're buying into a community. Understanding the vibe, amenities and long-term potential of the neighborhood is key."
Do I like the neighborhood?
What will my commute look like?
What kind of amenities are close by? Restaurants, parks, entertainment venues?
Can I walk or bike to local establishments?
How does this neighborhood suit my lifestyle?
If a buyer has a dog, they'll also need to think about what the area will be like on walks. Are there sidewalks? Any off-leash parks nearby?
It's also a good idea to ask your real estate agent a few questions that you can't necessarily answer for yourself.
What are the noise levels like on a typical day?
Are there any trains nearby?
Is the home in a flight path?
How is the cell service?
What are the neighbors like?
What kind of households or families live in the area? Young adults, young families, empty nesters, retirees?
Are the neighbors loud? Any frequent noisy partiers?
Is there any kind of wildlife I should be aware of?
Negotiating and Closing
Now that you've found the home of your dreams, it's time to put in an offer. However, you can ask your real estate agent for some advice before you submit your bid.
"In a competitive market, having a game plan is essential," Brock said. "Knowing how to position your offer and stand out, whether it's through flexibility with closing dates, waiving mortgage contingency and building inspection contingencies, or other creative approaches, can be the difference between winning the bid or not."
Do you recommend including any contingencies in the offer?
Should I put down an earnest money deposit? If so, how much?
When is the seller expected to respond to my offer?
How long do I have to respond to a counter-offer?
How can we strategize if there are multiple offers?
What are the next steps after the offer is accepted?
What timeline can I expect between signing a contract and closing?
Understanding Seller Disclosures and Inspections
You may think that all sellers are held to the same standard, but what a seller is required to disclose on a property can vary greatly depending on the state. For instance, in the state of California, a home seller is required to disclose any known issues on the property. This doesn't just include structural issues and natural disasters, but also deaths – whether it be from natural causes or murder.
When it comes to inspections, the buyer is expected to foot the bill. While this may seem like another cost to tack onto a long list of bills associated with homebuying, it's best to remember that you'll want your inspector working for you, not someone else.
What is the seller required to disclose about this property?
Is there any way to find out things about the property that the seller is not required to disclose?
Does the seller have to see the report that the inspector provides? If they ask, do I have to give it to them?
Closing Day
When you've finally reached closing day, it can be a rush of emotions. This is the day when the deed of the house is officially transferred to you, making you the homeowner.
Do I need to be physically present to sign paperwork?
What documents will I receive on closing day?
How long will closing take?
What can I expect on closing day?
Is there anything that can go awry between now and closing day?
At what point can the seller no longer back out of the sale?
Commonly Overlooked Homebuying Questions
Some questions may get overlooked in the exciting process of buying a home, but these should not be forgotten.
Is the home in an HOA, and if so, what are the fees?
What are the HOA rules and regulations?
Have there been any issues with the HOA in the past?
Is this a stigmatized property?
What are the future maintenance needs of this property?
What is the resale potential?
Are there any upcoming developments or zoning changes?
"Future developments can impact property values and quality of life," Brock said. "So it's crucial to know what's on the horizon."
The Bottom Line
Buying a home is exciting, but it also requires a lot of due diligence. There are no stupid questions when it comes to your next home purchase, so feel free to ask away. After all, owning a home is typically a long-term investment. And it's not just a financial investment, it's also an investment in your lifestyle.
To view the original article, visit the Homes.com blog.
