6 Questions to Ask Before Buying a Home
Before you make an offer on a house, it pays to ask a handful of questions. The answers to your questions may not sit easy with you. You may rethink your decision but you should ask them. It will also facilitate a smoother transaction which is good for everyone.
1- What is the property worth in today’s market? Agents can only advise you how much to offer on a home, so ask your agent to provide you with some of the most recent sales comparisons near the property you are interested in buying. Your agent can also give you an idea how long homes are sitting on the market. Try and get at least one comparable that is very close to the property you are interested in so that you feel comfortable with the offer you make.
2-How flexible is the seller on the asking price?- Have your agent find out from the seller how willing they are to negotiate on the price. This allows you to feel out the situation without insulting the seller. Not all sellers are willing to bargain. If you as a buyer have a strategy of submitting low ball offers, you will have to plan on many of them being rejected. Lenders today will absorb the closing costs in their estimates to you if you don’t have the funds. It may raise your rate a bit but you can stay more liquid.
3-What’s wrong with this house?- All homes have flaws and are not perfect. Be wary of any listing claiming the home is perfect. Their agent should know better and should never claim a home is in flawless condition. Take the direct approach and ask are any issues with the house in which you are interested. See if the sellers had a pre-listing inspection before listing and if they did, ask to read it. When you get into escrow, read the disclosures carefully and have a home inspection done by a licensed inspector. Find any problem early and resolve it.
4- Is the home in a flood plain?- Living in a flood plain can raise the cost of living in a house. The Federal Emergency Management Agency (FEMA) posts free online maps that would show if your future home is in a flood plain. In most cases you can assume the seller’s flood policy just makes sure the price stays similar. Make you read and are comfortable with what does and does not get covered in your policy.
5-Will the lender allow a short sale?- In a short sale, the bank allows the property to be sold for less than the amount of the outstanding mortgage. Without the bank’s consent, there will be no sale. It is important to find out if the seller’s have been in contact with their bank and if the bank is willing to give its permission? Do the mortgagee’s meet the banks requirements. Ask your agent if they contacted the seller’s agent to see if the requirements for a short sale are being met. What was the banks reasoning for granting the short sale? Agreeing on a price with a non approved short sale wastes your time and you may miss a different home that is available to buy.
6-Do the sellers have the paperwork for all the mechanical systems?- Some sellers will have all the instructions and warranties for all the appliances. They will be kept in a book along with the receipts. You should now all them or at least where to find these warranties as they will save you a ton of money should your A/C go out or you want to know the name of the contractor who did the flooring in your home.