Okay, so you know that you want a house, you’re ready to start applying for a mortgage and you are really ready to start looking at awesome houses, right? You really want to pick out that new place, but you’re getting a little bit ahead of yourself. That’s because there are some very important questions that you should be asking yourself and others before you make a purchase (or even try to).
1. Can I Afford it?
Sure, you might absolutely love it, but can you actually afford the payments on that house? When it comes to getting a mortgage you’re going to find that it’s a lot harder than it used to be. Mortgage companies are practically requiring a large down payment or they’ll make you get additional financing. If you have at least 20% to put down on a house, however, you’re definitely going to be better off and you’re going to be more appealing as well.
You also want to make sure that the mortgage you end up with is going to be something you can afford. A lender may give you a large mortgage that will really stretch you to your limits (or beyond) but that’s definitely not something that you want.
You want to make sure that you’re going to be able to comfortably pay the mortgage, no matter what you thought you might want.
It’s way too easy to get sucked into a house you can’t afford because you were able to borrow the money. Make sure you’re checking out some of the top mortgage calculators to find out more about what you can actually afford.
Another thing to keep in mind is that you have other expenses besides just the monthly mortgage. You’re also going to need to pay for property taxes, insurance and upkeep as well as any projects you might want to complete and any repairs that need doing.
It’s important to know that you have money available for these things.
2. Why Do You Want to Sell?
If you’ve gotten a new job or if you’re looking for a differently sized house or if you’re getting married you may want a new house. But it’s important to ask the seller what it is about their life that’s prompting them to sell. The more urgent their move the more they’re likely to negotiate.
Keep in mind that this isn’t a question the seller is required to answer and many of them might not, but you might want to know a little more and try anyway. You might find out more about them than they might want to tell you, and that can help you get a great price.
3. How Long Have They Been There?
If you’re buying a house that’s been moved into and moved out of frequently it’s probably a sign that there’s something going on in the area that you might want to look at more closely.
On the other hand, people who have lived in a house for a very long time may not have updated or fixed things the way that they should have. Either way, it’s important to know what you’re dealing with before you jump in.
4. Has There Been Any Water?
If there have been problems with the pipes or with water in the basement before you’re definitely going to want to know about it. Even worse, any of these could mean that there’s something structural going on with the house that could be more expensive later on. An inspector is the only one who can check to know for sure. They’ll also help check for mold in areas that have seen a lot of water.
5. Are There Problems in the Neighborhood?
Are there any neighbors that cause a problem? There are streets or local businesses or traffic or crime or anything else that could be difficult for you? Some neighborhoods might have a lot of litter or bright lights or maybe they have broken lights or barking dogs. Any of these things could deter you from making a purchase, so it’s important to ask about them early on. Not only that but you’ll be able to check with the police department to find out about complaints or crime that’s reported within the area before you buy.
6. What Did it Last Sell For?
You might not get this directly from the seller, but usually you can find just how much the house sold for when the current seller purchased it. You mostly want to know about how the value of the house has changed since the last seller purchased the house. This is going to tell you more about how they’ve been keeping it up.
7. What’s Underneath?
You should always know what type of foundation the house has. If it’s raised or there’s a basement this makes it easier to get into the plumbing and the electrical if there’s ever a problem. If it’s on a slab it’s going to be a whole lot more difficult to do. Also, make sure you know what’s under the foundation, such as wetlands, sand, or anything else. This will give you more information about just how sturdy things are.
8. Is There Documentation On Work Done To The House?
You want to know what’s been done on the house, like updates and repairs to the mechanical systems. Having paper copies of all of the paperwork that’s related to these things can help you see what’s been done and what might still need to be done. You’ll also know if there’s any warranty still on anything or who to contact in case of a problem. Even things like which paint has been used in the home could be helpful when you’re looking to make some touch-ups.
9. What Are Price Of Comparable Homes?
Don’t just look at one house and buy it. You want to know what houses that are like it are selling for. These are called comps in the real estate world and they’re going to make it a whole lot easier for you to get a good price on this house. You want to look at houses that are similar in size and style, age and condition.
Your real estate agent will generally get you some comps and let you know if the house is a good value, but you may want to check for yourself as well. Look for the high and low prices that houses are selling for (not listed for) in the area that you’re planning to buy in as well.
10. What Doesn’t Come With the House?
Don’t assume that everything you see is going to come with the house. You want to make sure that you actually talk with the agent or the seller to know what’s going to stay and what’s going to go. Even if something appears to be built in you need to check with the seller.
Know what you’re buying and then make sure that everything you want to be included is written directly into the contract.
That way you don’t have to worry about a surprise later on when you walk into the house you’ve just purchased and something is missing.
11. Have There Been Foreclosures In The Area?
Your house might not be a foreclosure, but a nearby one could definitely impact the value of your house and that’s something you don’t want.
Make sure that you know whether there were foreclosures in the area and then make a decision based on the information. That doesn’t mean you definitely don’t want the house. It just means you want to think carefully.
12. What Are the Bills?
You’re going to have to pay for things like utilities and that means you want to know what that cost is going to be. You’ll be able to prepare that way. So ask about the average cost and the most expensive costs.
You may also want to find out more about whether everything is gas, electric or propane. Make sure you know how you can upgrade to more energy-efficient pieces and what you can do to help reduce your energy costs overall. You don’t want to get caught with something you weren’t expecting.
You may need to pay attention to things like council taxes and other property-related costs. If you don’t know what these are going to be you could be in for a really big surprise when those bills start coming in. You’ll want to have a good budget prepared ahead of time and that means knowing all the costs that are going to be associated with your new place.
Even if the property is great you could end up having to pay more than you had planned for and that could mean that you’re going to have to cut back on some of the other things that you might have been spending on before.
13. What Should I Know About the Area?
You always want to know what’s going on in the area, but you may not have any idea on your own. That’s why you want to talk with the agent about how the area really is. If you’re new to the area it’s especially important because you might not be as comfortable with the neighborhoods and more.
You’ll want to know about things like parking, schools, litter collection, traffic and noise. Think about all of the things that might bother you in your new house and make sure you ask the agent everything you possibly can about them. You’ll also want to visit the property yourself at different times of the day and night to get a better idea of how things are.
14. Who Is Handling the Home Inspection?
You should absolutely have a home inspection done to make sure there’s nothing majorly wrong with the property. But you want to know who is going to be in charge of the inspection. Is your agent going to take care of setting it up or are you going to set it up for yourself?
The best thing you can do is get a list of possible inspectors from your agent and then pick the one that you want to work with. That makes sure you don’t have to worry about someone who favors your agent rather than wanting to provide you with an impartial judgement on the property.
15. Is There a General Problem?
There will generally be a disclosure statement made if there’s something serious going on in the home, like an existing lien, lead based paint, natural hazards, history of property-line disputes, defects with major systems or termite problems. Most of these are going to be required by the area that you live in or even your state as a whole, which will help to prepare you and give you the opportunity for legal action if you discover something that should have been disclosed later. Otherwise, you’re going to be responsible yourself.
Still, you want to know about any additional problems that might be going on. It’s possible there are things that the law doesn’t require to be disclosed but that you’ll definitely want to know about. If the seller knows they may not want to tell you, but you may be able to get more information out of them and the inspection might tell you even more. This could make it possible to lower the costs and negotiate a little better.
16. What Kind of Concessions Do You Ask For?
Are there any specific things that you want when it comes to buying the house? Maybe there are certain things in the house that you want to make sure are included. Maybe you want the seller to be responsible for specific costs or at least a portion of those costs. Make sure you write any concessions directly into the contract that the seller is going to sign and don’t just verbally agree.
When you talk to the seller you also need to know about how much you’re going to need to pay in order to finalize the sale.
If you agree to split specific costs that’s going to make a difference in how much money you actually need to borrow, so make sure you have the check made out for the proper amount when you show up for the closing.
17. Are There Documents Available?
If anything has been done to the house over the years there might be documents to let you know more about it. These documents could make it easier for you to know who to contact in case of problems or to know who has the most knowledge of the house itself. You might also find that some of the work that’s been done is actually still under warranty. That’s going to make it a whole lot easier and less expensive for you to do anything that the house might need at some point down the road as well. You just want to make sure that you’re always aware.