Before You Buy a Home: Questions to Ask
Buying a home, whether it's your first home or your fifth, is a significant endeavor and investment. You cannot undo your decision once the title and the money have been transferred. So asking questions while you are house hunting and before making an offer on a home is essential.
This article explores a few important questions to ask when buying a home.
The Homebuying Process
Buying a home is a process that begins before you start to house hunt. The first step in purchasing a home is not finding a real estate agent or checking out your local housing market. The first step is determining how much home you can afford.
There are two ways to make this key financial determination. The first is through a pre-qualification letter. The second is through a preapproval letter. These terms are not synonymous. A pre-qualification letter tells you how much money you will likely qualify for, while a preapproval letter gives the amount, including an interest rate, for which you have qualified.
Lenders will review your credit score and a past year's income tax returns before issuing a preapproval letter. This letter should also give you an idea of your monthly mortgage payments and how much you will need for a down payment. To avoid surprises or obstacles, get copies of your credit report a few months before you buy a house. Doing so lets you avoid unpleasant surprises or an untimely denial of your mortgage loan application.
Real Estate Agent
Once you know how much you can spend on a home, you can enlist a Realtor or real estate agent to help you find your new home. A buyer's agent helps the buyer find their dream home by showing buyers homes that meet their criteria. They do this through a combination of open houses and private showings.
What Can You Tell Me About the Current Housing Market?
Realtors and real estate agents are often great resources for their clients because they are experts on the local housing market. They should understand the local market and how to explain it to you. You want to get the best purchase price for your new home, and understanding the pricing on similar homes can help you make the best choice.
What Can You Tell Me About This Neighborhood?
Location is almost everything in real estate. You know what you are looking for in a home and community. Be sure to communicate your desires with your Realtor or real estate agent.
Sample questions to ask your agent include:
- How close is the area to my place of employment?
- What is the proximity of grocery stores and other conveniences to the neighborhood?
- Are there any local parks or trails?
- Is the community close to public transportation?
- What is traffic like in the neighborhood?
- Does this community have a homeowners association (HOA)?
- Is this neighborhood susceptible to natural disasters?
What Makes a House a Good Investment?
For many people, a house is more than just a home. It is also an investment. Because houses appreciate with time, home ownership often provides the foundation for personal net worth and generational wealth.
What Is the Condition of the Home?
Once you have officially purchased your new home, it is all yours. You are responsible for any necessary repairs or renovations, so you should know the house's condition. One way most buyers confirm the condition of a home is through a home inspection. Hidden defects can alter the home's value, so the inspection report can help you make an offer.
During a home inspection, home inspectors check the house, including the following:
- Crawl spaces
- HVAC system
- Air conditioning system
- Water heaters
The inspector will prepare a report after they complete the home inspection. The report will point out any defects in the house or property.
How Old Is the Roof?
Roofs are expensive to repair and last between 15 and 50 years, depending on their materials. If you know the roof's age, you can estimate how long it will last and incorporate this knowledge into your offer.
When Were the Appliances and Systems Last Replaced?
Consider the age of the appliances, such as a washer and dryer, and possible replacement costs.
The current homeowner must make certain disclosures to potential buyers. These disclosures include but are not limited to the following:
- Lead paint
You should ask the current homeowner about the home warranty and any claims made under it. You can also ask about any major renovations made to the house to understand its condition better.
Can I Get Financial Help With Buying a Home?
Financial help is available for buying a home. Some states, cities, and the federal government offer programs to help people buy homes, especially first-time homebuyers. The Federal Housing Administration (FHA) is part of the U.S. Department of Housing and Urban Development and offers access to several government-backed home loans. Some cities offer financial assistance with down payments and closing costs for first-time homebuyers.
How Much Should I Offer for a House?
Whatever offer you come up with will be very personal to you. At this stage in the process, you should have a good idea of what you want in a new home. The following are a few additional questions you can ask as you try to determine an offer amount:
- What is the asking price for the house?
- What is the home's last purchase price (how much the seller paid)?
- How does this home's price compare to the listing prices of similar homes?
- What are the unique characteristics of this home?
- What are my projected monthly payments, including property taxes?
What Is the Closing?
The house closing is the transfer of the ownership of a house from the seller to the buyer. The closing occurs after both parties have met the terms of their contract. Some items typically finalized at closing include:
- Deed transfer
- Mortgage insurance
- Homeowners insurance
- Closing costs, including attorney fees and commissions
Do I Need an Attorney to Draft My Agreements?
The answer depends on your location. Only attorneys may draft real estate contracts and purchase agreements in some states. In other states, real estate professionals can use standard forms. However, given the magnitude of this purchase, potential buyers should speak to an attorney before signing any agreements.
Get Legal Help
If you are looking for or considering buying a new house, an experienced real estate attorney can help you avoid red flags. They can review all of your agreements and negotiate on your behalf. Speak to a local real estate attorney today.
You Don’t Have To Solve This on Your Own – Get a Lawyer’s Help
Meeting with a lawyer can help you understand your options and how to best protect your rights. Visit our attorney directory to find a lawyer near you who can help.