Buying a house is one of the most thrilling moments in your life. It’s a sign of change and new things to come. Whether it’s your first house or the home you plan to retire in, you want a property that fits your budget and personal needs. Knowing what questions to ask when buying a home can help you find the right house for the right price. If you’re not sure what to ask, here are some questions to get you started.
Knowing how much you can actually afford is the best place to start. Even with modern financing options, you don’t want to be in a situation where you’re paying off your house for the rest of your life. The sticker price on the house will comprise the crux of what you pay, but it’s just part of the picture. Most home sales involve a bevy of other ongoing costs, including:
There are a lot of unknowns that go into these processes, so you likely won’t know the final cost upfront. Still, working with your agent and seller, you can get a general estimate for the total cost. Some of these costs are negotiable, and many can be rolled into your closing costs.
Showing the seller that you have the money to cover the cost of the house just makes it easier to accept your offer, and it assures the REALTOR® that you’re a qualified home buyer.
You obviously know that you’re getting the actual house, but what else comes with the sale? Anything that’s considered a fixture, including cabinets, window blinds, and faucets, typically comes with the house, but beyond that, things can be a bit unclear. The listing description itself should identify any inclusions and exclusions, but it doesn’t hurt to ask what the seller plans to take with them and what will stay with the house. That includes:
This gives you an idea of what you’ll have to spend on when you move in, which can then affect what you are willing to pay for. If you really want to keep that shed or other items in the house, you may be able to work out a deal with the seller.
Utility bills are another important component to consider in your monthly budget, and is one of the best questions to ask when viewing a house. Ask about average heating, cooling, water, electric, and internet costs. If those costs seem high, you may be able to keep them down by investing in more efficient appliances or a green power supply once you move in, but keep in mind that both of those things will also have a fairly high upfront cost.
Related to the above, knowing the age of all the essential systems and appliances can help you anticipate how much and how soon you may have to deal with repairs or replacements. Older appliances typically use up more energy than more modern appliances, which can cut into your monthly utility expenses. Older appliances are also more prone to malfunction. You don’t want to move into your new home only for the stove to stop working within your first week.
In particular, ask about the age of the furnace, water heater, and condenser, as well as how often they have been serviced and maintained. For appliances, ask the seller if they have any warranties still available to determine any manufacturer protections that still apply. If any of the major appliances or systems are nearing the end of their average lifespan, you can also ask the seller to purchase a home warranty. This can cover at least some of the replacement and repair costs for important appliances and home systems.
Understanding how much nearby homes have sold for can give you an idea of what to expect to pay. It can also help you determine if a seller’s price is too high or just right. Real estate agents can usually pull up the data for comparable listings in the area that have recently sold or are still on the market, and you can look up recently sold homes online.
If the home you are looking at is wildly more expensive than other comparable properties, like the similar home down the street, you should ask why. The current owner may have done a lot of work on renovations and expansions to the property, or they may have just listed it at a high price.
Homes can stay on the market for a variety of reasons, and not all of them necessarily point to a bad property. Some sellers simply have an overly high initial asking price. Still, houses that have been on the market for too long should make you ask more questions.
In general, do not make a low offer on a home that has been on the market for 21 days or less. However, beyond 90 days, it can be safe to proceed with a lower offer, often about 90 percent of the asking price. You can talk to your real estate agent about pricing negotiations, particularly between that 21- and 90-day period.
A history of insurance claims on a property can actually affect your ability to get homeowner’s insurance on that property, as well as the actual rate of coverage that you pay. This can be troublesome, but it technically makes sense. Insurers want to manage risks, and a property that has had insurance claims in the past may have a higher risk.
For example, a property that previously suffered water damage is more likely to experience mold problems or more water damage in the future. That actually gives you a fair warning about that property and potential problems you may run into.
To learn about a property’s past insurance claims, ask for the Comprehensive Loss Underwriting Exchange (CLUE) report. This provides a record of insurable incidents that have happened to the house in the past seven years. This can then provide insight into any damage caused by vandalism or weather events.
You can always remodel, renovate, and repair things in and around the house, but fixing things in the neighborhood is a little harder. It’s important that your neighborhood has everything that you personally need, like walkable cafes, public transit lines, or easy access to freeways. Even if you don’t plan to live in that home forever, think about it like you will be there for at least a decade. Living next to a loud, busy street may be something you can tolerate for a few weeks or months, but can you do that for 10 years?
If you have kids, use the internet to research nearby schools, parks, amenities, and HOA rules. You may also be able to ask your real estate agent or the seller for more information about the neighborhood.
It’s also a good idea to time your commute to work. Having a beautiful home doesn’t mean much if most of your days are spent at work or sitting in traffic for hours.
Closing costs are the fees that come with closing on a home, beyond the down payment. The exact amount for these closing costs will vary based on the location of the home and other factors, but you can generally expect to pay 2 to 5 percent of the home’s sticker price. This covers:
Your mortgage lender will typically provide you with a closing disclosure three days before closing. This disclosure presents all of your mortgage loan fees and the amount that you’ll need to hand over to close on your home. Depending on the deal, the seller may actually cover part or all of your closing costs, though this comes at a tradeoff. For example, a seller may cover closing costs if the buyer agrees to a higher purchase price. Sellers may also agree to pay closing costs if the buyer speeds up the closing process.
Purchasing a home can be confusing and intimidating, so asking the right questions gives you the information to make the right choice. Berkshire Hathaway HomeServices California Properties can provide the insight and guidance to help you through every step of the buying process. If you are looking for the home of your dreams, contact one of our real estate agents today.