Buying a home may seem an easy task but it sure comes with a certain set of challenges. With technological advancements and dependency on the internet for every answer, there are some touchpoints you must address to your real estate agent or your advisor before you buy a home.
Every real estate transaction varies based on its geography, conditions, and the current nature of demand. It is always wiser to ask ample questions before taking a final call. Read informative articles on the internet or speak to your local real estate agent to solve your doubts. This will help you make smarter home-buying decisions.
In this article, we will throw some light on the 5 most fundamental questions you need to ask as a home buyer to make decisions you won’t regret.
1. Is it necessary to hire a real estate agent?
The answer to this is NO!
According to the National Association of Realtors, 12% of homebuyers opted for the “For Sale by Owner” format, thus eliminating the real estate agent and saving thousands of dollars as commission. However, as a buyer, you don’t have to pay a real estate agent’s fee. The seller usually takes care of it by pre-deciding a specific percentage of commission for the buyer’s agent.
If you still want to reduce extra hidden costs, the best option is to find your dream home through Flat Fee MLS websites that offer you a plethora of options without charging any unjustified or unexpected expenses.
When would it be right to not hire a professional agent? If you have a generous amount of time in your hand to focus on your listing or if you have adequate knowledge about how the real estate market functions, the “For Sale by Owner” format is ideal for you.
2. What’s my total budget?
Unless you’re opting for paying in cash, you’ll end up paying more than the actual buying price. And even if the payment method is cash, there will still be extra expenses you will have to incur. Typically, the total cost of a house includes the following:
i) Appraisal: This being the very first expense that you will incur, it usually takes an expert evaluation of the property. Appraisal of a property costs around $700.
ii) The property cost: The original cost of the property that the seller has quoted is the foundation of all the expenses. While an agent would take weeks to show you houses that fall under your budget, real estate websites like Houzeo, Zillow, Redfin, etc. give you a wide array of listings within your desired location and budget, thus giving you the liberty to fasten up the process.
iii) Inspection: The inspection is just to make sure of the condition of the house – are there any repairs that need to be done or just to identify if everything is in order. This is to avoid any unexpected expenses in the future.
iv) Mortgage: If you opt for a loan to buy a house, the mortgage interest and insurance will play one of the major expenses in your purchase. It completely depends on the arrangement of your mortgage plan.
v) Agent’s commission: If you choose to work with an agent, make sure to enter into an arrangement with the seller where they are ready to bear the real estate agent’s commission.
Most of these and many other expenses can be easily avoided if you purchase your dream home through a Flat Fee MLS website. There is an assurance of the seller paying the agent fees, the transaction being transparent, and flexibility in scheduling the showings.
3. How much have the nearby homes sold for?
Having an estimation of the price range for the neighboring houses gives you a gist to quote your offer. Going ahead, if you want your house to be priced better, it is advisable to compromise a little on the housing structure rather than the neighborhood. So, if your house is the most expensive among the lot, you may want to consider digging deeper and understanding the reason for the hike.
To assess the financial value of the homes in a neighborhood, explore Flat Fee MLS websites such as Houzeo, Redfin, FSBO.com, etc. for recently sold homes You can also discuss this with your agent.
4. How is the neighborhood?
This is one of the most underestimated questions buyers often forget to ask. You would rather settle for an average-looking home than reside in a questionable neighborhood. Ask about the crime rates, safety, how helpful or nosy can the neighbors be – this is total to get a sense of the community you are going to live in.
The seller, if desperate, may not reveal the entire truth but there are other ways to find out. Look upon the internet, ask your friends or family (if any) in that area, or read reviews about recently purchased homes through real estate websites.
5. Is the home vulnerable to natural disasters?
When you want to call a house your home, it is advisable to measure the pros and cons about how prone it is to natural calamities. Every state has different flood disclosure laws that give an outline about what sellers must tell buyers beforehand.
In addition to asking about the flood susceptibility, you may want to ask about earthquakes, fires, tornadoes, and blizzards as well.
If this is the first time you’re buying a house, it could be intimidating. But the proper guidance and adequate information available online should keep your anxiety at bay. Buying a house is probably one of the biggest financial commitments you are willing to make. Asking the right questions won’t only help you know more about what you’re walking into, but it will also avoid any surprises in the future.