Buying a home is a very exciting time for buyers. But a lot of them want to know “What should I be asking before making an offer?” Here are the top 10 questions you should be asking before making an offer on a house.
1. What is the market value of your home?
One of the most important decisions you’re going to be making is how much to put an offer for. You don’t want to overpay for home, so as your Realtors we will put together a CMA, which is a comparable market analysis. It takes a look at:
- What is going on in this market?
- What has sold?
- What has it sold for?
- What is the timing and condition of those homes?
We want to make sure you are never overpaying for a property because an appraisal is going to come down and shoot that price down anyways. We want to make sure that you are getting a good deal and definitely going below what the market value is if possible.
2. How much did the seller pay for the home?
If they purchased the home 5, 10, 30+ years ago, of course there’s equity in that home. So looking at the question is probably not very relevant. However, if they purchased the home a year or two ago and have not made any upgrades to the property and they are looking to flip it for about $50,000 more, you are probably getting into a home that is overpriced. You want to be careful and make sure you’re not buying an overpriced home that hasn’t had any renovations or upgrades just because the seller is looking to make a lot of equity on a home that they just purchased.
3. How long has the property been on the market?
Seller motivation is huge. The longer a home has been on the market, the more willing they are going to negotiate because they probably just want to get out of that home. We want to make sure we look at factors such as:
- Why has the home been on the market that long?
- Was it priced too high to begin with?
- Were there issues that came back if it was under contract before?
This is really good analysis and snapshot of sellers’ motivation and what your offer can be.
4. What is the current state of the market in general?
A lot of the buyers don’t always necessarily look at that or they do and then they get caught up with the house, but it is important to see where we are in the economic cycle of real estate.
5. Are there any issues with the house?
Once you get an executed contract, you will be able to hire an inspector to come and do an inspection. It is very important that you understand what the expenses could be for any issues that arise in a home, because those are out of pocket expenses if you are unable to negotiate those items and repairs with the seller.
6. Are there any plans for a future development in this neighborhood or surrounding area?
You may come to find out that they are building either a school, or a factory, or something nearby they can affect the value of your home in the future. We encountered a time when we found out that in a condo there was an investor purchasing all of the units. Anybody who purchased risked losing their condo, because once the investor hit 80% of the ownership, they can buy out the remaining 20% of the owners without any question and turn it into an apartment. So if your goal was to stay in that condo for a long period of time, then you’re out of luck.
It is really important to see what are the future development of this neighborhood or surrounding area.
7. How old are the mechanics of the home? (This question is really important)
Your roof, electrical, plumbing, your AC are the main big ticket items of a home. These are things that you want to look at.
- How old are they?
- When am I going to need to replace them?
- How much will the replacement cost?
These are the most costly items to repair or replace in the property so getting a home warranty would probably be a really good option for most buyers.
Even assessing the costs and condition upfront is important so that you understand the offer you should submit. Consider the expenses of a new roof, possible new AC, or redoing plumbing if it’s poly pipes or copper. Make sure you consider all of those and ask those questions when putting in an offer.
8. What is the seller’s timeline?
This can be a good motivator for you so that you can understand how to submit a more competitive offer in your favor when you can give the seller the timeline of when they need to close and move into a house. Not every seller wants to close in 30 days. Some may need to find a house, so they want 45 days or 60 days. The more flexible you are, the more you can negotiate with the purchase price.
9. Have you received any other offers?
This is a great question because if they have had a handful of other offers, why didn’t they accept any of them?
- Were rejected offers lowball offers?
- Were there contingencies that the seller would not accept?
- Is this property a waste of my time?
Again, this helps us formulate a better offer for you, the buyer.
10. What are your closing costs going to be on the purchase of this home?
Many times buyers overlook this because all they think about is their down payment. The down payment is not the only cost in purchasing a home. An inspection costs money and that is out of pocket and that is whether or not you proceed to move forward with the closing of this home. There’s much more involved than just your down payment. Here’s a good breakdown: closing costs. Being able to calculate that, and ask your lender for your Good Faith Estimate before hand is going to help you understand how much you can get into this house for, and what is it going to look like a closing.
As you can see, there are a lot of very valuable questions you should be asking prior to submitting an offer. Your agent should be asking all of these questions on your behalf and guiding you through the process to make sure that you are well informed in submitting an offer that is to your benefit, and making sure that you are not overpaying for a property.
At Waypointe Realty, we setup a VIP Buyer Consultation to go over the entire home buying process in detail and outline all the value we offer our buyers when you choose us to represent you in the purchase of your next home.
We GUARANTEE that you will love the home you’re in or we will help you sell it for free.
If you have any questions about how to purchase a property, what to look for in a home, please feel free to contact us at 407-801-9914.