Before you make an offer on a house, it’s important to make sure all your questions are answered. But, more importantly, you need to be asking the right questions. Though the answers may surprise you, they can also help you feel confident in your decision to move in on the right home.
Here are the seven questions you need to ask before you make an offer.
What is the property worth in today’s market?
Your agent can’t tell you how much to offer for ethical reasons. However, rather than directly asking how much the home is worth, you can ask indirectly by seeking information about comparable sales or comps.
Your agent should show you plenty of comparable – similar nearby homes recently sold.
Your agent can tell you how long homes are staying on the market and the percentage of the asking price sellers are getting. This will tell you how hot the market is in that area.
Ask how long the property has been on the market – if its been sitting on the market for month without any offers this indicates either a slow market or an over-priced listing.
How flexible is the seller on the asking price?
You don’t want to insult the seller with a lowball offer. To avoid this offence, ask the seller’s agent how firm the seller is on the price. You can ask the seller’s agent directly or have your agent do it.
It’s all about phrasing with this one – ask “how flexible are they on the price” rather than “how much less will they accept”. Keep in mind, not every seller will be willing to bargain.
Are there any problems with the property?
One of the things that’s happening now is every house is in ‘perfect condition’. The sellers want to get rid of their properties so they’re not disclosing any real problems. Take the direct approach – ask, “is there a problem with this house”.
You can also remind tight-lipped sellers that with inspections and disclosures, you’ll probably find any problems anyway. Speaking directly about any issues can help you avoid wasting your time or theirs.
Is this home in a flood plain?
Living in a flood plain means you need flood insurance, which can affect the cost of living in the house. There are maps online you can check but it doesn’t hurt to talk to your property agent too. If it is, you need to know what type and how much the insurance will cost. Ask to see the sellers flood insurance bills to start.
Will the lender allow a short sale?
In a short sale, the bank allows the property to be sold for less than the amount of its outstanding mortgage. If the seller’s bank doesn’t give its consent, the short sale can’t happen.
Some sellers simply decide to list their properties as “short sale” before even talking to their lenders. They don’t realize that their financial situations might not meet he criteria. So make sure you get the bank’s approval or there won’t be a deal.
Do a little investigating too. If the buyer has gotten permission for a short sale, what was the bank’s reason?
Any foreclosures for sale in the area?
Sellers and their agents hate this question. Foreclosures usually cost less and that has to figure into our buying decision.
With foreclosures in the neighborhood, you can assume there will be a lot of price completion and you can offer less money.
Do you have the paperwork for the mechanical systems?
If the seller replaced the AC right before he listed the home, and the unit malfunctions after the new buyers move in they don’t have a lot of options without documentation. You won’t know about any warranties so you’ll have to make the repairs out of pocket.
Are you ready to get started? Reach out today.