Serious Considerations Before You Buy A Home
Before you let yourself fall in love with that longed-for perfect home and make an offer, you need to seriously seek answers to the questions below so you will know how to confidently invest your money without any surprises or regrets. Understanding property values, home sellers, possible property shortcomings, and the workings of distressed sales should be your top priority while you search for your new home.
How Much Is A Home Worth?
Making an offer on a house is not done by simply undercutting the asking price or by asking your agent for a dollar amount, which they should not do for ethical reasons. By doing a little research with your realtor and reviewing comparable sales, you will be able to determine how much a property is worth.
Ask for the selling prices of similar recently-sold homes in the same area including the high and low ranges for the particular property. Compare the seller asking prices with the selling prices keeping in mind the total amount of days the properties were on the market. These factors should give you a realistic idea of the home's worth.
Will The Seller Work With My Offer?
Sellers can be flexible or firm on pricing, but it is best never to offend them by offering too low a price, especially if you are truly interested in the property. Contact the seller's agent to see if the homeowner is firm, flexible, or ready to bargain, but avoid giving them bad offers. Your focus should be on flexibility rather than a deep discount, but if you strategically like to make low offers, then make sure you have several properties in mind.
Will The Seller Contribute To Closing Costs?
Depending on the seller's situation, they may be willing to help with closing costs because of their strong desire to sell. Homeowners facing foreclosure or equity-holding property owners have been known to help out the homebuyer this way.
Does The Property Have Any Issues?
Be concerned if a property is promoted as being in perfect condition. It is tempting for sellers to not divulge any costly problems, so it would not be incorrect for you to directly ask about existing issues with the property. Sellers are apt to get things out in the open when reminded that disclosures are required and upcoming inspections will uncover trouble. If the homeowner has had an inspection, ask to see the report. Disclosures can work to the seller's advantage, providing a channel of communication to you and a workable solution to any existing problems.
Do I Need To Know About Flood Zones?
This would certainly be a wise question to ask most homeowners because the cost of flood insurance would need to be figured in the budget. The Federal Emergency Management Agency posts flood plain maps online for free, so you can investigate the designation given to a particular property. Asking your agent would be helpful also to determine risks or weigh your options if the property in location in a flood plain. Inquire how much flood insurance costs the current homeowner or if their policy is assumable.
Can Any House Be A Short Sale?
Banks allow some properties to be sold for less than the mortgaged value, so it is the lender that approves a home for short sale, not the realtor or the seller. If a seller lists a property as a short sale without consulting the lender, there will be no sale regardless of buyer/seller negotiations. The lender has criteria that must be met before a home can be sold as a short sale, so make sure the short sale is available and know why it is being sold in this manner. Reasons can vary from job transfers to divorce, but it should be a credible one.
Are There Foreclosures In The Area?
Asking a home seller or realtor about foreclosed homes in the same area as their property is not music to their ears because you may be able to make them a lower offer. Price competition is tougher when a neighborhood comparables include foreclosures. Ask your realtor how many of the sold homes in the neighborhood are the result of distressed sales.
Are Any Home Related Documents, Warranties or Receipts Available?
These can be most helpful to you as a prospective buyer to determine the age and longevity of major appliances or heating/cooling systems. Replacement costs for higher cost items soon after the home's purchase may prove to be financially challenging to you. It would be beneficial to know what appliances have existing warranties, as well as maintenance recommendations.