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Finding the right home involves a lot of research — about your lifestyle, your local housing market and especially your personal finances. When you’re ready to begin house-hunting, it’s important to ask the right questions to ensure you’re making a competitive offer on a home that you can afford, and one that meets your long-term needs. Here are 10 crucial questions to ask both yourself and others when buying a house.
1. What’s my total budget?
Don’t waste your time looking at houses without first understanding how much house you can afford. There are additional costs to consider beyond just the sale price, such as property taxes, homeowners insurance, ongoing maintenance and any renovations you want to do.
“With all the other added expenses that come with homeownership, like repairs and homeowner’s association fees, you may not see the financial benefits for several years,” says Wendy Mays, a Realtor with eXp Realty of California in San Ramon, California.
If you want your offer to be accepted, you must show the seller you have the financial means to buy their house. This means getting preapproved for a mortgage.
“Not only does preapproval give the buyer an idea of what they can afford, but it also gives the Realtor assurance that they’re showing a qualified buyer a home,” says Joey Sampaga, a Realtor with Realty ONE Group in Goodyear, Arizona. “It shows you’re not wasting the seller’s time.”
2. Is the home in a flood zone or prone to natural disasters?
Be aware. Homes that are located in a federally designated, high-risk flood zone require flood insurance — which is separate from your regular homeowners insurance policy. (You can find out whether a property is in a high-risk flood zone using FEMA’s Flood Map Service.)
Likewise, if you’re buying a home in California or another region where earthquakes are common, you may need to get earthquake insurance. Another tip: Make sure you purchase enough homeowners insurance to cover the cost of completely rebuilding your home if it’s destroyed. If a major disaster hits and you’re underinsured, you could be left footing a massive bill to repair or rebuild.
3. What’s included in the sale?
Anything that’s considered a fixture is typically included when purchasing a house — think cabinets, appliances, built-ins and window treatments. However, there could be items that you think are included but actually aren’t. This depends on your state’s laws. The listing description should spell out anything the seller is not including, but that’s not always the case.
Make sure to ask in your offer what is (and isn’t) included with the home. Do you really want that washer/dryer, or that chandelier? Confirm whether the seller is willing to throw these items into the deal.
4. Are there any major renovations?
In some cases, property records and listing descriptions don’t always match up. For example, a home might be advertised as having four bedrooms, but one of those rooms may be a non-conforming addition that doesn’t follow local building codes.
Find out what major repairs or renovations the seller has done since owning the home. Knowing a home’s improvement history can help you better gauge its condition and understand the seller’s asking price.
5. How old are the roof, appliances and major systems?
Roofs are necessary, and also expensive. If a home’s roof is at the end of its lifespan and you wind up having to replace it shortly after move-in, you’ll be shelling out thousands of dollars. And if it has existing damage, the lender may require that it be repaired in order to approve your loan. If the listing description doesn’t list the roof’s age, make sure to find out so you can avoid a costly headache later.
It’s also smart to request the original manufacturer warranties on any appliances or systems that have been replaced. Understanding the anticipated lifespan of essential systems and appliances — like the air conditioner, furnace, water heater, washer/dryer and stove — can help you anticipate major repair or replacement expenses. If these items are already at the end of their lifespan, or near it, ask the seller to purchase a home warranty, which can help cover the replacement costs in certain instances.
6. How long has the house been for sale?
The longer a house sits on the market, the more motivated the seller will likely be to make a deal. This means you might find flexibility to negotiate the price, contingencies, terms and credits for replacing outdated carpet or other noticeable issues.
Many times, a home will languish on the market if it was priced too high at the onset, resulting in the need for a price reduction. A listing that shows multiple price cuts and has been sitting on the market too long may give buyers the impression that something is wrong with it. And that gives you a prime opportunity to negotiate a deal.
7. How much do homes sell for in the neighborhood?
Understanding the current local market will help you determine whether a seller’s asking price is reasonable — or way too high. Your Realtor can pull the data for comparable homes that are currently on the market, and ones that have sold in the last six months or so, as a basis for comparison.
“If conditions support further negotiating, consider making a lower offer or even requesting concessions, like asking the seller to pay for some closing costs,” Mays says.
8. Are there any safety hazards, past insurance claims or other problems?
Issues like lead paint, radon, mold or other major hazards can be costly to address and can hold up your loan approval. Ask the seller to provide documentation if there have been past issues, and find out exactly what was done to resolve those problems. If you suspect hazardous problems — or a home inspector suggests additional testing — you might need to pay extra for those specialized services.
One way to investigate the home’s history is to get a copy of a Comprehensive Loss Underwriting Exchange, or CLUE report, from the seller to see if there have been any homeowners insurance claims filed in the last seven years. This report can give you insight into what, if any, damage the home has sustained from a weather event or vandalism that a home inspection doesn’t catch or a seller fails to mention.
Sellers are typically required to provide a disclosure form listing any known defects. But what they don’t disclose — and you don’t know — can lead to major issues later. That’s why it’s critical to get a home inspection done by a professional home inspector as soon as a purchase agreement is signed.
The inspection report outlines the home’s overall condition and can help you negotiate future concessions, such as repairs or seller-paid credits, before closing the deal. If a home has too many problems and you included an appraisal contingency when you made an offer on the home, you’ll be able to back out of the deal without penalty and (in most cases) get your earnest deposit returned.
9. What is the neighborhood like?
Getting the true feel of a neighborhood can be difficult before moving in, but this aspect shouldn’t be overlooked. Ask the seller what the neighbors are like. Noisy or quiet? Friendly or more likely to keep to themselves? Is it a pet-friendly area, or are there few pets around?
Don’t rely solely on the seller to reveal these details, though, or you might not get the full story. “Drive the neighborhood and stop and speak with neighbors,” Mays suggests. “Neighbors are an excellent way to get information about the community that a seller might not want to share.”
You can always change a house and fix things you don’t like, but the neighborhood is there to stay. It’s important that you like the area you’ll be living in. Your Realtor can help you find out key information, such as community amenities, crime statistics, school ratings and how busy traffic is where you’ll be living. The internet is also a great resource for researching schools, homeowners association rules (if applicable), nearby parks and other amenities. And don’t forget to time your commute to work — a long one might be a deal breaker.
10. How much will I pay in closing costs?
The down payment isn’t the only cash you’ll be forking over on closing day. You’ll also be responsible for closing costs, which typically include loan-related fees and fees for title research, processing of paperwork, an appraisal and other administrative tasks. Expect to pay around 2 percent to 5 percent of the home’s purchase price in closing costs. (The amount can vary depending on your area.)
The closing disclosure, which a lender is required to provide you three business days before closing, will spell out all your loan fees and how much cash you’ll need to close. Even if you aren’t financing, you should also receive a closing statement that outlines all the various expenses associated with finalizing the deal.
“Once the closing documents are signed by both parties and the escrow company sends it to the lender, the lender will fund the loan,” Sampaga says. “Now you’re a homeowner.”