For most people, a home will be the most expensive purchase they’ll ever make. It’s an investment, a way to build equity and also find a place to live. Needless to say, this is not the type of purchase that should be made lightly. That’s why knowing the questions to ask when buying a home is so you don’t end up with a bad buy.
Here are the most important questions to ask when buying a house, grouped by the type of questions they are.
- Financial Questions
- House Specific Questions
- Area Related Questions
- Questions for the Real Estate Agent
1. Financial Questions
Can I Afford To Buy a Home, and Can I Qualify For a Loan?
If you’re going through traditional lending methods, you need to be able to be sure that you have enough income to afford a house in your area. If you are unable to show enough monthly income or have subpar credit, it can be difficult to qualify for a loan. A home affordability calculator can help, as can using a credit score calculator.
Can I Afford a House’s Total Monthly Costs?
The cost of the property isn’t all you need to budget for. You will need to budget for additional monthly expenses on top of your mortgage payment, including, insurance, HOA fees, property taxes, utilities, and maintenance. If you plan on making renovations or improvements to the home you should also factor those in.
Will I Need a Bigger House Down the Line?
If you’re planning to have kids, or your kids are growing up, you might want to consider looking for a larger home than what you currently need. After all, you'll want more space as your family grows. And if you'll need to upgrade to a bigger home in a couple of years, you'll lose a lot of money in closing costs.
Do I Need To Save Up For a Down Payment?
Some loans won’t require a down payment, but most will. A minimum of 3.5% is required for the majority of FHA loans, while traditional loans will require 20% or more. You'll also want to factor in other closing costs as well as moving expenses.
2. House Specific Questions
Why Is the House For Sale?
A house that’s on sale as a result of a foreclosure may be a high-risk property. A home that’s on sale as a result of a fix and flip is a better bet.
Hold Old Are the Roof and Appliances?
Nothing is worse than getting a new home, only to find out that you have to pay $30,000 or more for a new roof. Finding out the roof’s age, as well as the age of appliances like the boiler and stove, can help mitigate that risk.
How Many Days Has the House Been On the Market?
A house that has sat on the market for a long time may have problems with it that you should be aware of. Knowing this can also help you figure out how much negotiating room is on the table.
What’s the house’s history of insurance claims?
This can help you glean how much of a risk owning the home is, as well as important issues that may not immediately be visible.
How Much Would the Utilities Cost?
This is an often-overlooked aspect of home buying that needs to be brought up more often. A high-cost home is not going to be a good investment.
What’s Included In the Sale?
Are you getting a townhouse, plus a shed? What about the land near the lake? Does the property include free parking or passes to the nearby beach? These are good questions to ask that might sweeten an otherwise bland deal.
Is There a Stigma Associated With This House?
Though this isn’t always a deal-breaker, certain types of homes are more difficult to sell. For example, homes near power lines can be harder to sell. Similarly, homes in which crimes took place (such as murder) or homes that are considered "haunted" tend to attract the wrong type of attention.
3. Area Related Questions
How Much Do Other Houses Nearby Cost?
You'll want to ask about the prices of nearby homes. If the house you want to buy is vastly below market costs, you should raise an eyebrow and ask why.
Where Are the Nearest Schools?
Parents already know the importance of good schooling, but it's also important for buyers who plan on having kids. While real estate agents cannot legally judge the quality of schools, they can certainly let you know where the nearest schools are located. If you want to learn more about the school systems you can use online tools to see how they're rated. Excellent schools tend to coincide with good neighborhoods and prestige.
Are There Any Other Risk Factors I Should Know About?
It's important to ask if the home (or neighborhood) have any other risk factors that wouldn’t be obvious during your first impression. Things like asbestos, lead paint, and other issues should be brought up. Additionally, you might want to ask if the home is in a floodplain. If it is, you might want to consider passing on it.
Is This Neighborhood Safe?
This is one of the most important questions to ask when buying a home. You don’t want to move into a dangerous town, especially if you have kids, so you'll need to do your research and ensure the home is in a safe area.
4. Questions for the Real Estate Agent
How Long Have You Been a Realtor?
Asking your real estate agent how long they've been in the business is an excellent way to glean how much experience they have and how capable they’ll be working with you.
Are You Familiar With the Area?
This is one of the most important questions to ask when buying a home. You don’t want to work with an agent who isn’t used to your area since they might not be able to answer all the questions you have.
You can also ask your real estate agent if they have references in the area. After all, you want to know they’ll do a good job.
How Responsive is Your Mortgage Broker?
On average, it takes 42 days to close on a home. If your realtor’s broker is less responsive, this can seriously eat up precious time and make a deal fall through.
What’s Your Availability and How Can I Best Reach You?
If they are a part-time realtor, you may have a hard time booking viewings or getting in touch with your agent. Knowing when you can call is a must. Some agents are email-based. Others operate via text or over the phone. There are even some that may ask you to call their office.
Your best bet is to work with an agent who you can reach out to directly anytime.
How Many Homes Have You Sold?
A realtor with no home sales won’t be able to offer advice when it comes to the basics. You should also know whether they work with buyers, sellers, or both.
Can You Explain the Home Buying Process To Me?
If you are not fully aware of what will go on, then the best thing you can do for yourself is to ask the agent to give you a play-by-play of the home-buying process.
Do you have a real estate appraiser that you suggest we work with?
This is a good way to make sure that you get the right price and that the appraisal will be a good one.
Are there any waivers in the offer that we should add?
Things like repair conditions, any special requests, as well as legal stipulations should be brought up before you put in an offer.
How Much Earnest Money Are They Expecting?
1% of the asking price is the norm, but in areas like New York CityCIty, you may be expected to put down as much as 10%.
How Can You Help Me Compete in This Market?
Not all markets are going to be a buyer’s wonderland. Knowing how you can get ahead with a realtor is important, especially if there are multiple bids.
If you aren’t sure about any detail of the house, the best thing to do is ask. People who tend to forget questions about the home when they’re with a realtor should have a question checklist to bring to them.
There’s never such a thing as a bad question, especially when you’re dealing with a transaction that can easily exceed the six-figure mark. A good real estate agent will know that and give you the answers that you need to make an informed buying decision. So, go ahead. Ask that question. It will only help you in the long run.