Earlier this year when the nation pressed pause on the economy and unemployment rates jumped up significantly, many homeowners were immediately concerned about being able to pay their mortgages, and
15 Questions to Ask When Buying a House
Dated: September 8 2020
15 Questions to Ask When Buying A House
We’re not going to beat around the bush: Buying a house is complicated. If you don’t pay attention, you could get in so far over your head that you end up broke—or stuck in a home that’s not a good fit for your lifestyle. But you can avoid this by asking a few smart questions!
1. What’s my housing budget?
Okay, the first question you need to ask yourself is: How much house can I afford? If you don’t ask this question when buying a house, you might go with whatever number a lender approves for you. And that could run you the risk of carrying a mortgage burden so large and for so long that you feel like Atlas after Zeus dropped the weight of the world on his shoulders for all of eternity. To avoid living that nightmare, don’t take on a mortgage with payments that are more than 25% of your monthly take-home pay. This includes grown-up stuff like property taxes, homeowner’s insurance, and (depending on your situation) private mortgage insurance and homeowners association dues.
2. How much should I save for a down payment?
Speaking of budget, the next question to ask is: How much do I need for a down payment? If you have the money, the answer is 100%. It’s always a good move to buy in cash or put down as much money as possible to avoid a monthly mortgage that follows you around forever. Don’t worry about losing the tax write-off or whatever your broke friends tell you is a “sophisticated” financial move. Trust us, the math won’t work in your favor.
If you are getting a mortgage, aim for at least a 20% down payment. That way you can avoid paying for private mortgage insurance (PMI). If that’s not possible, don’t put down any lower than 10%. Otherwise, you’ll be killing yourself with extra interest and fees. So, if you’re getting a $300,000 house, you should save up at least $30,000–60,000 as a down payment.
3. How much are closing costs?
Another home-budget question you should ask is: How much do I pay for closing costs? For a ballpark estimate, you’ll likely pay around 2–5% of your home’s purchase price in closing costs. So if you’re buying a $300,000 home, you might have to pay $6,000–15,000 in closing costs. Make sure you save up a separate amount for closing costs before buying a house. That way, you won’t be tempted to steal the amount from your down payment.
4. Do I need to save for moving expenses?
Unless you’re “paying” your friends with pizza to help you move, don’t let moving expenses catch you by surprise. The cost to move changes drastically whether you’re moving local or long-distance—the latter being the more expensive of the two. If you’re moving for a job opportunity, you may be able to work out a relocation package with your new company to cover your costs.
5. How will I furnish and decorate?
This is definitely a question first-time home buyers and any repeat buyers who didn’t learn their lesson the first time should ask. Don’t justify getting a loan for furniture. Having debt is one of the worst home-buying mistakes you can make. Either keep the items you already have, buy used ones, or save up for new stuff as you go along. Decorate one room at a time if it helps keep your financial goals on track. You might have some empty rooms for a little while, but your budget and your future self will thank you!
6. What’s the neighborhood like?
Asking about the neighborhood is a big one. In fact, the quality of the neighborhood was the main reason recent home buyers (58%) chose their neighborhood. To give you an idea of what most home buyers care about when choosing a neighborhood, check out how these factors ranked below.
Top 10 Most Important Neighborhood Factors According to Home Buyers
Quality of the neighborhood: 58%
Convenient to job: 44%
Overall affordability of homes: 41%
Convenient to friends/family: 39%
Convenient to shopping: 25%
Design of neighborhood: 25%
Quality of the school district: 24%
Convenient to schools: 21%
Convenient to entertainment/leisure activities: 21%
Convenient to parks/recreational facilities: 19%
This list can give you ideas for questions to ask to see if a neighborhood is the best option or a deal-breaker for you. For example, ask if the neighborhood is close enough to things you’ll be doing during your everyday life—like driving to work, taking kids to school, buying groceries, and going to the gym. You’ll also want to ask what the neighbors are like if you can. Is the neighborhood safe for kids to play in the yard? Do dogs bark in the middle of the night? Have there been a number of crime reports?
Finding the answers to these questions will help you get a feel for whether or not a certain neighborhood is the right fit for your wants and needs.
7. What are the schools like?
Okay, as we learned in Question #6, nearly a quarter of all recent home buyers said the quality of the school district (24%) and the convenience to schools (21%) were important factors in choosing a neighborhood. And guess what else? The home characteristics that recent buyers were least likely to compromise on were school quality (4%) and distance from school (2%).
So, if you have (or plan to have) any kiddos, asking questions about the quality and distance of the school districts near your potential home is obviously a big deal. But even if you don’t have kids, keep in mind that a home planted near good schools could make it more valuable when it’s time to sell. Cha-ching!
8. Is the location prone to natural disasters?
If you’ve never lived in an area that has hurricanes or severe weather warnings, you’ve probably never had to deal with thinking about how to protect yourself. So ask if your new home is located in an area where it’s at risk of tornadoes, floods, wildfires, earthquakes, or ice storms. Then make sure you’re covered for those natural disasters beyond what your homeowner’s insurance may cover.
9. Are there any problems with the house?
The answer to this question isn’t always easy to find. That’s why you absolutely need to get a home inspection before you buy it. Sure, your seller is required to send a document that lists any known problems. But they could always leave something out accidentally (or intentionally). For example, ask if there were ever any major renovations done to the house. Who knows? A previous owner might’ve added a bedroom or a deck that isn’t actually up to code. Or maybe they’re trying to sweep a mold or pest issue under the carpet. Knowing about it before you buy can help you strike a deal during negotiations.
10. How old is the roof?
Most expert roofing websites say that an asphalt roof has a lifespan of around 20 years. So make sure you find out how many times Santa’s reindeer have clip-clopped their little hooves onto the roof of the house you’re looking to buy. If the roof is approaching the end of its life expectancy, it could cost you $7,000–10,000 to replace it on a 1,900-square-foot home. You don’t want a surprise roof replacement screwing up your budget.
11. How old are the appliances?
Imagine moving into your brand-spankin’ new house only to find out all the appliances are pretty much busted. If you know that certain major appliances are on their last leg before you buy the house, you could probably work out a nice deal with the seller. So ask about the current life expectancy of all the items that come with the house and when they might need to be replaced. This includes stuff like the HVAC system, water heater, washer/dryer, refrigerator, stove and dishwasher.
12. What’s included when I buy?
You’ll definitely want to ask what’s included with the house you’re buying. Some states have different laws about the stuff that should be included in a home purchase. Just be careful not to assume you’re keeping all the appliances, lighting fixtures and window treatments when you make an offer. Later, you might find yourself upset when there’s a gaping, empty space in the kitchen where the refrigerator used to sit.
13. What are similar homes selling for?
Alright, now let’s dig into the home price. This is a question your real estate agent can help you answer. They’ll have insider knowledge of current home sales and home types in the area where you’re looking to buy. Answering this question can help you see if the home you want to buy is set at a fair price. Just so you know the lingo, this is called a competitive market analysis (CMA).
14. What’s the reason for selling?
See if you can find out why the seller is leaving. The reason most sellers sold their homes recently was because they felt it was too small (15%), they wanted to move closer to friends and family (14%) or they relocated for a job (13%). A smaller percentage admitted to moving because the neighborhood (9%) or schools (2%) had become less desirable. Digging to the bottom of these reasons might give you a better idea if you really want to live there. But it can also help you at the negotiating table. For example, say the seller is on a tight timeline because they’re moving for a new job and don’t want to miss their start date. They might be more willing to work with you on the price to get it sold faster.
15. How many days has the house been on the market?
This is another question that can help you be a smart negotiator. The longer a house sits on the market, the more buyers wonder if something is wrong with it. How long is too long? Every market is different. So ask your real estate agent to give you an idea for how fast houses are moving in the market where you’re shopping.
To give you an idea of what this looks like, the buying market tends to follow the seasons. It usually heats up in spring and cools down for winter. In fact, during the spring of 2019, homes sat on the market for a median of 53 days nationally. And, as the buying season cooled down for fall, homes were selling in about 62 days. So, if you find a home you’re interested in that’s been listed for well over two months (winter being the exception), you might be able to knock down the price or work out a deal that’s in your favor.
"Your Legacy Begins At Home" Janette and Doug and their Friend Team have more than a real estate practice; they have a mission called "Your Legacy Begins At Home". The mission combines years of real ....
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