Questions to Ask about Cost and Budget
1. What are your total costs?
The sticker price of a house is not the real price you’ll pay unless you’re paying cash. Even if you pay cash, there will be ongoing costs to remember in order to ensure that your home fits into your budget. Also, since there are so many unknowns in this phase, you won’t usually know the final cost up front. However, you can get a rough estimate.
Typically, a home’s “total” cost includes the following:
- Appraisal: The appraisal is an expert assessment of the property’s worth which is one of the first costs associated with purchasing a home. This will set you back several hundred dollars.
- The property in question: On Zillow or Redfin, you’ll see this big fat number listed. But don’t forget to factor in the cost of your down payment as well as your monthly payments. If you’ve figured out how much you can afford, talk to your mortgage lender about what your monthly payments will be.
- Inspection: Your future home’s condition is assessed during the inspection. Its aim is to recognize something that isn’t in good working order, and it’s more comprehensive than an appraisal (and therefore might cost you a lot of money in the near future).
- Interest on a mortgage: If you borrow money to buy a house (i.e., take out a mortgage), you’ll have to pay interest on it (in the form of mortgage interest). Your interest rate will have a huge impact on the overall amount you pay for your home over the term of your loan.
- Mortgage Insurance: If you want a mortgage with a low down payment, you will be required to pay mortgage insurance on a monthly basis.
If you have a mortgage, the lender would almost certainly expect you to have insurance. And if you don’t, you’ll want to cover your belongings and properties with a scheme. Learn more about the standard coverage provided by homeowner’s insurance.
- Taxes: You’ll have to pay property taxes every year, but they’re usually bundled into your mortgage payment on a monthly basis. Local schools, road maintenance, and other important services in your area are all covered. Check to see if they’re comparable to the taxes on other properties in the region. Your best source of tax information is most likely the current homeowner.
- HOA fees: While not every home has a home ownership association (HOA), they’re becoming more common, and HOA fees can cover anything from maintaining a communal pool to insuring a common area. For ultra-luxury properties, they may be even higher.
2. What’s included in the sale?
You know you’re getting the house, but it’s not always clear what you’re getting beyond that. Ask this question before purchasing a house to find out what the sellers would take with them (window treatments, appliances, Light fixtures). This will help you understand what costs you’ll incur to make the house livable once you move in, and it will influence how much you’re willing to pay for it. It’s generally better to get the seller’s response in writing, particularly if they promise to leave valuable things behind, such as a built-in sound system.
3. How long has the house been on the market?
If a property has been on the market for a long time, it is likely to have some problems. If the house has been on the market for less than 21 days, it is not a good idea to make a low bid. However, after 90 days, it could be better to make a low bid (which, in this context, may mean something like 90 percent of the asking price).
Your HPH real estate agent will walk you through the best practices for houses that have been on the market for more than 21 days but less than 90 days, where the specifics of what to sell can be more difficult for the uninitiated to navigate.
4. Why is the seller moving out?
This is a crucial question to ask before purchasing a home, as it can show a lot about the property and the surrounding area. Some of the reasons are self-evident: the seller needs more room for a growing family, must move for a new career, or is downsizing in preparation for retirement. Some theories are a little more complicated.
The seller is required by law to inform you if there are any defects in the house, and most of the defects they are unaware of will be discovered during the inspection. However, it’s always a good idea to ask questions like, “Do I have any reason to think the home inspection would fail?”
5. How much have nearby homes sold for?
This question will give you an idea of how your home compares to those in the neighborhood. It’s probably easier to buy the ugliest spot in a good neighborhood than the nicest place in a questionable neighborhood if you want your home’s value to rise. So, if your house is the most expensive on the block, you may want to inquire as to why.
You may also ask your real estate agent for an estimate of what properties in your area are selling for.
6. How much do utilities usually cost?
Don’t forget to inquire about heating, cooling, electric, and internet costs before purchasing a house! (As well as water, sewer, garbage, recycling, and so on.) Understanding what utilities cost in a typical month is critical to ensuring that a house will truly fit into your monthly budget.
When your current equipment breaks down, consider upgrading to a greener power supply or investing in EnergyStar-rated appliances. Both can help you save money by lowering your total energy consumption.
Questions to Ask about the People You’ll Work With
7. Is the real estate agent familiar with your target market?
The value of dealing with a real estate agent who knows the market in which you want to buy. They might not be able to advise you on how to react to different circumstances if they lack on-the-ground knowledge.
8. Is your mortgage broker responsive?
The average mortgage closes in 42 days. During this time, your mortgage broker will be your primary point of contact with your lender, answering questions and ensuring that all of your paperwork is completed and submitted correctly. If this person does not respond, your home-buying experience will be even more difficult.
Questions to Ask about the House’s Risks
If you’ve figured out how a house can fit into your budget, it’s time to consider the risks it will pose to you and your family. These questions will assist you in doing so.
9. Is the home in a floodplain? Is it susceptible to other natural disasters?
Every state has its own flood disclosure laws that specify what sellers must disclose to buyers about their home’s flooding history. Regardless of your state’s rules, it’s a good idea to check your address on FEMA’s searchable floodplain database, which provides an address-by-address overview of properties’ vulnerability to 100-year flood conditions. You can also look at a home’s vulnerability to earthquakes, explosions, tornadoes, and blizzards, in addition to hurricane and flood susceptibility.
(Note that standard homeowners insurance plans do not cover flood damage; homeowners must purchase a separate flood insurance policy to be protected.)
10. What is this property’s history of insurance claims?
Unfortunately, a home’s insurance claim background will affect your ability to obtain homeowners insurance and/or the cost of such policy. Although this might sound like a big letdown, consider it a forewarning: if a home has already experienced water damage, there’s a greater chance it will encounter mold issues in the future.
Insurers are all about managing risk, so they can consider a property risky if they know it has a checkered history.
So, how can you learn more about the past? The best approach is to ask the seller for a copy of their CLUE (Comprehensive Loss Underwriting Exchange) study, which contains a seven-year record of insurable accidents that have happened to the property.
A few key points to remember about the CLUE report:
- If it’s blank, the homeowner either hasn’t filed any claims in the last seven years or has filed them with an insurer that isn’t a CLUE participant.
- If the house has had several owners in the last seven years, you’ll need a CLUE report from each of them to get the full story.
- The CLUE report lists the allegations that were made and the sums that were paid, although it does not always specify which part of the house was affected. You’ll have to speak to the sellers about it.
11. Does the house pose any health or safety hazards that wouldn’t be found in the inspection?
This is a massively important question to consider before buying a home. The presence of certain substances can endanger your and your family’s health, and it’s possible that your dream home isn’t worth the risk.
Common dangers to be aware of include:
- Lead paint (widely used in homes constructed prior to 1978)
While some of these may be included in your home inspection, they aren’t all required, so be sure to inquire. The majority of these risks necessitate professional assistance, which can be expensive and time consuming.
12. Are there any problems with the house? Have there ever been?
This is a good catch-all question to make sure you’re ready for something you haven’t specifically asked about, that the sellers might not be legally obliged to report, and that won’t show up in an inspection.
If any damage has occurred, inquire as to who performed the repairs and, if possible, obtain their contact information. Maintenance is an inevitable part of owning a house, and the more prepared you are, the less stress you can experience.
Questions to Ask about the House’s Condition
There is no such thing as a perfect home. These questions will help you get a sense of the property’s specific flaws if you’re thinking about buying one.
13. Has the house seen any additions or major renovations?
Updates to a home can add comfort and value, but they can also cause problems, especially if the owner was trying to save money on the addition or renovation at the time (and, let’s face it, aren’t we all trying to save money?).
If the property you’re considering has had additions or upgrades, inquire about who did the work and obtain their contact information from the seller. Even if you just need to know what color the walls were painted, you’ll be grateful to have it.
14. How old is the roof?
Roofs need routine maintenance, but the frequency varies depending on the type of roof and the amount of wear and tear it has endured. Before you buy a home, ask this question to get an idea of how soon you’ll need to replace the roof.
15. How old are major appliances and systems?
You know how important it is to check the age of appliances if you’ve ever moved into a new home only to have the water heater break down the first week. We suggest inquiring about the age of the condenser, furnace, and water heaters, as well as whether they’ve been serviced on a regular basis.
As an added bonus, inquire if the seller has any appliance warranties on hand. These documents can assist you in determining whether or not your major appliances are still covered by manufacturer warranties.
16. Do you have the original plans to the house?
Not everybody would, but if you do, they can be extremely useful. Also, if the original architect is no longer alive, inquire if they have the name and contact information for their firm.
17. How big is the water heater?
Speaking of water heaters, it’s best to make sure yours is big enough to keep your family from having daily shrieking fits as the hot water gives out mid-shower.
Questions to Ask about the Neighborhood
Good neighbors will turn a new house into a home. But how do you find out about your new neighbors before you purchase a home? Ask!
18. What are the neighbors like?
You can learn as much about how the seller responds as you can from what they say, just as you can from how they address the query about why the sellers are leaving. A gushing response full of specifics indicates tight, warm relationships. It’s possible that hesitant or ambiguous answers are a red flag.
But keep in mind that the seller might be a grumpy neighbor, so take it with a grain of salt. Check Facebook and NextDoor for neighborhood-specific groups to get a feel for the area. Follow along for a few days to get a feel for the locals.
19. How is the neighborhood?
You can get crime statistics from an online search, but to get a sense of the neighborhood’s energy and feel, you’ll need to speak with someone who has lived there. Again, a short response may reveal as much as a lengthy response – most sellers who have nothing nice to say will say nothing at all.
If you’re buying a home with a HOA evaluation, one way to get a sense of the neighborhood is to look at the HOA’s financial health, which can act as a proxy for the neighborhood’s financial stability.
20. Any problem neighbors or local nuisances?
Keep in mind that obnoxious or dangerous conduct can be more than a mild annoyance – it can put you and your neighbors in danger. Smaller annoyances are also useful to be aware of.
21. Does this house have any stigma associated with it?
The term “stigma” can refer to anything from hauntings and paranormal activity to nefarious or criminal activity on the premises.
To begin, keep in mind that houses with “stigma” usually sell for much less than their fair market value. Second, be aware that stigma disclosure standards differ greatly between states and municipalities. That’s why, whether you believe in ghosts or not, it’s a good idea to inquire about these particular topics. If a building, for example, has a reputation for being haunted, it’s likely to draw the kind of publicity that most homeowners would rather stop.
22. What did you love most about living here?
The majority of the questions you’re encouraged to ask before purchasing a home include keeping an eye out for potential problems. But, if for no other reason than to help you discover what the property has to offer faster than you would have otherwise, it’s also a good idea to ask sellers what they liked best about the house.
How Houston Premium Homes Makes Real Estate Easy
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Your Houston Premium Homes Realtor® will be there to help you in every phase of the process, from pricing your home to getting it ready to sell, purchasing a new home, promoting your listing, leading negotiations, and closing the deal. Our full-service approach will transform a complicated, time-consuming operation into a smarter, more streamlined one with in-house mortgage and title services, ensuring that your selling goes as smoothly as possible. Contact us today.