Questions To Ask When Buying A House
Dori Zinn4-Minute Read
October 12, 2020
Buying a home is going to be one of the most expensive purchases you’ll ever make. And one you shouldn’t take lightly. Before you sign a contract or even look at a home, there are a few questions to ask.
1. What’s My Budget?
Before committing to more than you can afford, you need to figure out how much home you can buy. Not everyone’s income and bills are the same, which means the house you like and the house you can afford might not be the same thing.
Before you start looking at homes and getting your hopes up, finely comb through your finances. Review your monthly bills and estimate how much you can afford to pay each month towards your mortgage as well as new home costs (like utility bills and insurance). This will help you determine how much your home price will be. Remember your home costs will probably be more than what you pay now. Try not to take on more than you can handle.
2. What’s Included In The Home Sale?
While fixtures are typically included in the sale of a home, you may get other amenities as well. Your state laws may vary in what’s included in a home sale, but see if your potential home includes updated appliances (or appliances at all). If the home is missing anything, like a refrigerator, dishwasher, or washer and dryer setup, consider negotiating a lower price or asking for new appliances to be included in the cost.
3. How’s The Neighborhood?
If you’re moving to a place you aren’t familiar with – whether in a different state or a location just a little further away – you’ll need to scope out the neighborhood. In fact, you may want to find the right neighborhood before browsing through home listings.
When reviewing neighborhoods, ask yourself a few additional questions, like:
- How close is it to the grocery store, restaurants and highways?
- What are nearby schools like?
- Is it an easier commute to work?
- What’s the average home price of the neighborhood or the overall affordability of homes?
4. What’s The Roof Condition?
The condition of a roof is a major make-or-break point in a potential home sale. An old roof could mean a lower sale price, but depending on where you live, you might not be able to get homeowners insurance.
On the flip side, a new roof might bump up the sale price. But that means you wouldn’t need to invest in a costly roof project for at least a decade, but usually much longer.
Additionally, find out other foundation concerns, electrical systems and insulation setups through the home inspection. This will also let you know of any health or safety hazards that a professional finds in the home.
5. Why Are The Sellers Leaving?
You’ll usually find that sellers leave because they got a new job, wanted to downsize or just be closer to family. But knowing the reason could work in your favor. If the sellers are out of the house or need to move quickly, they could be more flexible with their terms and selling price. If they already moved into a new home, sellers are looking to avoid making two home payments for longer than necessary.
6. Do I Have Enough For A Down Payment?
Having a 20% down payment is not a requirement to buy a home, but it does help you substantially save on your monthly payment. In fact, the more you pay upfront, the less you’ll need to pay over time.
Many lenders will work with you if you have 10% or less for a down payment, but this could crush your monthly budget if you’re spending more than you can afford on housing costs. Consider saving at least 10% – 20% of the final home price – or more, if possible.
7. Can I Cover Closing Costs?
Closing costs can eat into your budget faster than you think. Typically, they can range from 2% – 5% of the final sale, depending on where you live.
If you don’t have the extra cash to pay your down payment and closing costs, you can ask your lender if you can roll them into the cost of the loan. That means you’ll pay it off with your mortgage payment. This is good if you can’t afford closing costs, but it means you’ll pay interest on top of it for years afterward.
8. How Does This Home Compare To Similar Homes In The Neighborhood?
Your real estate agent and home appraisal will look at how your potential new home compares to other homes that have recently sold. But you can see what you’d expect to pay by browsing comps, or comparable homes nearby.
For instance, if you’re looking at a three-bedroom, two-bathroom home that’s 1,600 square feet with a two-car garage, check out comps. The more comps you can find, the better idea you’ll have of how much your home will cost you.
9. How Long Has The Home Been On The Market?
The longer a home is on the market, the more suspicious you’ll get. What’s been the holdup? How many offers have there been? Have buyers or sellers backed out from offers? What does a home inspection show?
But the longer a home has been on a market, the more likely the seller will want to make a deal. If you have funds to make necessary renovations that might’ve been the reason for the holdup, you might be able to negotiate a lower sale price. Sometimes, a home is simply priced too high when it’s listed, which scares potential buyers away. Buyers will wait for the price to drop or move on to homes that are more in line with their budget.
10. Does The Home Cover My Needs?
This one will need close consideration. Is the home big enough for your family? Are you planning to expand your family down the road, or you expect other members to move in? Do you want a spacious backyard or a pool? Do you have a big enough kitchen to take care of all your culinary desires?
Homes fulfill different needs for different people. Before you buy, make sure all your needs are met or you can make those changes yourself in the future.
Table of Contents
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