8 Questions To Ask Before Buying a Property
8 Questions To Ask Before Buying a Property.
It's normal to have questions before buying a property but they range from strange, like asking if the house is haunted, to the essential like asking about necessary repairs.
Read on to find out some of the questions you need to ask before getting ready to pay the down payment.
What is included in the sale?
Some home sellers will include appliances, furniture, and window treatments with the sale of the home while others will not. You'll want to make sure that you know what is and isn't included to budget properly.
Not having to pay for a couch that fits just right in the living room of your new house is something that saves you time and money.
Your total budget needs to account for all the money involved in the transaction; meaning that you need to factor in the offer price, closing costs, and more. Knowing exactly what you're getting from the sale can help you budget out repair costs or look into replacing a light fixture or two.
What is the house's repair history?
A home with a lot of repair needs is not only going to be costly to bring up to current code, but it may also require extensive work that you weren't expecting. By knowing the repair history of a property, you can get an idea of what kind of hidden costs you might have down the road.
If any known major repairs need to be made, you'll want to factor those into your offer price. You don't want to be blindsided by a broken furnace or roofing that will need to be replaced shortly.
In a seller's market, the buyer's agents - meaning your agent - will try and get you your dream home but the reality is that buying a house in market conditions that favour sellers is going to take more money than you anticipated. The listing price you see online is likely not the price you will get the home for.
Though the market is expected to turn soon where the seller's agent would be the one making the concessions instead, the best advice in either situation is to figure out what the house's history is concerning its major issues over the years.
A home inspector will be about to tell you most of the serious issues that are apparent now, such as immediate problems with electrical systems but knowing about any major renovations will help you decide if the home is worth the asking price.
A water heater failing a couple of months after your move-in date is definitely not ideal but if you expected it by taking a look at how long ago it was inspected, repaired, or replaced then you can take the proper precautionary measures.
It's important to make the distinction between cosmetic repairs and things like removing lead paint from the home.
CLUE, Comprehensive Loss Underwriting Exchange, is a great resource for prospective buyers. It lists all the insurable incidents that have happened on the property. This can be a great way to find out whether any major systems failed unexpectedly in the last seven years or if something like a tree fell on the house.
Is the neighbourhood in a good location?
Location is key when it comes to purchasing a home. You'll want to think about things like the surrounding area, public transportation, schools, and more when choosing a neighbourhood.
If you're looking for a family-friendly neighbourhood, you'll want to make sure that there are good local schools in the area. If you're looking for a home close to public transit, you'll want to find out what kind of bus or train routes are available.
You'll also want to think about your commute and how long it will take you to get to work or other places that you frequent.
Crime statistics are also something you want to factor in. It's something your real estate agent should be able to provide you with but you can also find them rather easily online.
What is the zoning for the property?
Zoning laws can be a bit confusing, but they're important to know when buying a property. Zoning laws dictate what kind of uses are allowed for a piece of land.
For example, a residential property will usually have zoning that doesn't allow for commercial use. That means you wouldn't be able to open up a business out of your home unless you applied for and were granted a change in the zoning.
Knowing what the zoning is for a property will help you avoid any surprises down the road. It's also important to know if the zoning for a property will allow you to do what you want with it.
For example, if you're interested in building a home or doing major renovations, you'll want to make sure that the zoning for the property will allow for that.
What are the property taxes like?
Property taxes can vary greatly from one municipality to another. They can also increase over time. It's important to know what the current property tax rate is for a municipality and whether or not it has increased in recent years.
You'll also want to find out how the taxes are calculated. Some municipalities use a mill rate while others use a percentage of the assessed value of the property.
Knowing what to expect when it comes to property taxes can help you budget for your new home.
Why are the owners selling?
The answer to this question can help you get a better price for the home. If the owners are moving because of job relocation, they may be more willing to negotiate on the price.
If the owners are going through a divorce, they may be eager to sell the property and may be open to a lower offer.
Knowing if you are dealing with a motivated seller is a great way to know what you can leverage in the negotiation phase of the home buying process.
Has the house ever been flooded?
This applies to all kinds of natural disasters that may have had an impact on the home. Health or safety hazards can arise even years after a good or other natural disasters come to pass. A home inspection can snuff out some key details that will let you know what issues you can encounter but sometimes even the current homeowner may not be aware of some damage through no fault of their own.
If you're a first-time homebuyer, you need to save money in an emergency fund separate from what your home insurance covers. If you uncover in the home inspection that the home has been damaged in the past, you can use that to get a better price on the home or get the seller to pay for the closing costs.
A home inspection report goes a long way but if you find out that the seller paid to bring the house back up to standard can make you feel safer about completing a costly real estate transaction.
Insurance claims can be a pain to navigate through so when thinking of your future home, take the time to figure those out. If you're thinking that homeowners insurance is the same thing as a home warranty, think again because they cover different things.
Homeowners insurance covers things like floods, storms, burglaries; a home warranty helps you reduce the replacement cost of major appliances replaced because of normal wear and tear.
What have other homes sold for?
Real estate agents know the ins and outs of a home sale, which should be expected but their real asset is their knowledge of the real estate market around different neighbourhoods.
Knowing what other homes sold for and with what kind of contingencies, not just the listing price, is a great way to know if you're going to pay a fair price for the home.
Of course, it's always best to defer to your real estate agent because the down payment you're going to put down is not going to differ by just a few hundred dollars if the new house you're looking at has had more repairs and renovations than most sellers offer up. Light fixtures, recently updated flooring, and a new water heater will all hike up the price quite a bit.
On top of that, monthly payments in the form of ongoing costs (mortgage, utility costs, etc) can change the way you view a home's asking price.
Overall, here's what you need to ask.
Think about the near future and what it holds for you and the home. It's more than just the water heater, the fuse box or annoying neighbours, that home inspection and other precautions you will take can have a big impact on your personal finances for the terms of your mortgage.
So don't be shy, and ask away.
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