First time home buying questions to ask
Most first-time home buyers jump into buying their first home because they’ve fallen heads over heels in love with the house, before signing on the dotted line. Here are 3 main issues that home buyers should address up front:
- Offering price: what is based upon? If you’re offering a price based only on the other homes you have toured, realize those homes carry no weight for an appraisal until they close. You should base your offer on the comparable sales nearby and not on what other sellers are asking for their homes.
- The condition of home: Ask about estimates for repairs and don’t automatically assume all repairs will cost thousands of dollars. Don’t automatically assume that you can deduct the cost of anticipated repairs from the sales price because the price might already be adjusted for that factor.
- Location of home: the location has a huge bearing on the sales price, and you don’t want to buy a home in a bad location because resale will be difficult. For example I’ve asked the seller of a home before that backs to the train tracks if the train bothered her. A little bit, she admitted, but when she bought the home, she was swept away by the granite counters and newness of the home that she didn’t really notice the train zooming by.
Questions to Ask About Offering Price
Home buyers often compare prices of similar homes in the neighborhood before choosing a price, but the asking price may have very little to do with the actual value of the home or the price a buyer should offer.
- How much did the seller pay? While the seller’s profit has nothing to do with the price of tea in China, it does help to know if values have gone up or down since the seller bought the home. If it’s a foreclosure flipper, you might not be able to secure financing for 90 days. Don’t focus on previous sales; use that information only as a guideline for your specific purpose.
- How much does the seller owe? If the seller owes more than the asking price, then you are looking at buying a short sale or the seller will need to bring cash to closing. If a seller needs to write a check to close escrow, you will be very unlikely to get the seller to pay your closing costs or offer to pay for any repairs. It’s better for you if the seller has a lot of equity.
- How much have similar homes sold for in the neighborhood? This is your best indicator of value because your bank’s appraiser will rely on those comparable sales to compute the value. Your agent can obtain a list of recently sold properties for you.
- How many offers has the seller received? Some homes generate multiple offers. In that event, your offer will need to be very strong to survive the competition. Don’t back away from a multiple offer situation as often the last offer submitted is the winning offer.
- How long has the home been on the market? You might be able to negotiate a discount on the price if the home has been on the market for 90 days or longer. All of this depends on the local real estate, however, and days on market in, say, a rural area, could quite likely be 360 or more.
Continue to Part 2 > HERE
Barb Miller NMLS#929071 – PrimeLending | 608-206-2988 | email@example.com | Apply For a Loan