There is a lot to consider before buying a home. If you’re going to live in the home, you’ll need to get a clear picture of what the next few years will look like for you and your family. If the house will be an investment property, you’ll need to understand what kinds of risks you’re taking on.
Here are several of the most important questions to ask your agent when buying a home:
- What am I going to pay each month to keep this house running?
- Is this house in a flood zone?
- When are the sellers looking to close and move out?
- Why are the sellers looking to close and move out?
- What is the market like in the neighborhood?
- What is life like in the neighborhood?
- What is on the seller’s disclosure?
- Have the owners filed any insurance claims in recent years?
- Where can I find paperwork for the home’s appliances and systems?
- Would you buy this house?
Now let’s take a closer look at why each question is critical and how to apply the information you gather to your decision on whether or not to purchase the property.
1. What Am I Going to Pay Each Month to Keep This House Running?
You should already be pre-approved for a mortgage, but talk to agents about just how much it costs to keep the lights on. These costs could show you just how much wiggle room is in your budget. Unusually high electric and heating costs could also point to problems that you will need to fix. (A lack of insulation or leaky faucets could affect utility bills, for example.)
If you are buying a condo, don’t make assumptions about HOA fees. Get the details from your agent and be sure to ask whether any HOA assessments are coming up. New condo owners are often overwhelmed with disclosures, assessments, and other high fees, so eliminate as many surprises as you can before you buy.
2. Is This House in a Flood Zone?
Don’t forget to consider the homeowner’s insurance when calculating monthly payments. Flood insurance, earthquake insurance, and other structures’ insurance will add up quickly. Figure out how much it would cost to rebuild your home and factor this into any insurance payments that you will have to make throughout the year.
3. When Are the Sellers Looking to Close and Move Out?
Sellers who are pressed for time may not have the resources or capability to wait around and negotiate with every buyer who comes their way. If you know that the sellers are looking to get out in a hurry, you could potentially score a deal.
4. Why Are the Sellers Looking to Close and Move Out?
Sellers may need to start a new job in a new city soon. Or they may just be running away from a house that can’t be saved. Do a little digging as to why the sellers are selling. Your curiosity could reveal some problems that you don’t want to fix.
5. What Is the Market Like in the Neighborhood?
Take a drive around the neighborhood to see if any other properties are for sale. Is everyone looking to move out? Or is everyone looking to move in? This information is key not only for investors but also for buyers who might want to wait things out and see what other opportunities arise in the area.
Be sure to do some digging into the value of the homes throughout the neighborhood, too. This will help you determine what is a fair price for the home you are looking to buy.
6. What Is Life Like in the Neighborhood?
A house isn’t a dream house if the nightly train shakes the whole property at 3 a.m. Open houses don’t show the damage from rowdy teens. Take some time to research the demographics of the neighborhood and who you’ll be living around. If you plan to flip the property or rent it to long-term tenants, you might still have to answer similar questions about life in the neighborhood.
7. What Is on the Seller’s Disclosure?
Almost every state in the country requires sellers to sign a form disclosing important information about the condition of the home. This form could include information dating back a decade. If there is anything wrong with the house, the seller’s disclosure form should let you know.
8. Have the Owners Filed Any Insurance Claims in Recent Years?
Alternatively, you could ask to see a Comprehensive Loss Underwriting Exchange (CLUE) report. Only homeowners and insurance companies have access to this report, but it’s easy to obtain and pass along to buyers. This report will show you any insurance claims that have been made in recent years after incidents such as vandalism or natural disasters caused damage to the home.
The CLUE report, seller’s disclosure forms, and other insights will help you get the full story on the property you want to buy. Without this story, you can’t confidently write the home’s next chapters.
9. Where Can I Find Paperwork on the Home’s Appliances and Systems?
Even if the house has brand new appliances and an HVAC system, look for documentation. Get warranty information on everything in the kitchen and anything that might need to be replaced in the next few years. Organized documents will be a huge time-saver if you need to call a repairman or have routine inspections. If the seller isn’t organized, it might be a clue of things to come.
10. Would You Buy This House?
This is always a fun question to ask your real estate agent. Turning the question on them may bring up any hesitations (or great features) that you hadn’t previously thought about. If your agent isn’t enthusiastic about buying this house for themselves, why would they want to show it to you?
If you have a question about a property, don’t be afraid to ask. The more you know about your potential home or investment, the easier it will be to make the right decision.
Source: BiggerPockets.com ~ By Scott Smith ~ Image: BiggerPockets.com