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Buying a home is a very exciting time. There are times when a buyer gets so excited about buying a home that they aren’t thinking clearly and overlook some important things.
If you’ve been out shopping for homes and believe that you’ve found “the one,” take a step back and refocus. Before you sign on the dotted line on a purchase offer, you should ask some very important questions.
Often buyers neglect to ask the important questions which can lead to a serious case of buyers remorse. Yes, buyers remorse does exist in real estate too! Avoiding home buyers remorse is something that real estate agents should be coaching their buyers on.
One of the best ways to avoid home buyers remorse is to ask the right questions before making an offer on a home. By asking the right questions before making an offer a buyer greatly improves the chances they won’t have buyers remorse.
Below are the top 10 questions to ask before making an offer on a home. These 10 questions are certainly not the only questions that can be asked, but certainly are 10 of the most important. Read on to find out what questions you should be asking before making an offer on a home.
One of the most important decisions you’ll make when making an offer on a home is the amount you’re going to offer. In order to make a solid offer on a home, you need to know what the market value of the home is.
There is not a magic formula that tells buyers how much to offer for a home. There are however several things that can help a buyer determine how much to offer for a home.
Arguably the most important factor to help a buyer determine how much to offer for a home is the homes current market value. Market values can change quite rapidly so it’s important before making an offer on a home that you know what the current market value of the home is.
One of the most accurate ways to determine the market value of a home is to ask an experienced buyers agent to perform a comparative market analysis, frequently referred to as a CMA. A CMA is a detailed analysis of recent comparable sales in a specific area. These properties should be similar in styles, square footage, year built, number of bedrooms, and a variety of other criteria.
It’s not completely uncommon that a buyer becomes a homeowner and a few short years later turns around and attempts to sell it for a huge profit. Certainly scenarios do exist where a seller has made a ton of improvements and upgrades and the increase in value is warranted, but often this is not the case.
Another important fact to find out before making an offer on a home is how much the current homeowner paid for the home. Recently while selling a home in Brighton NY, the seller was attempting to sell their home for $50,000 more than they paid 2 years ago. There were no records or signs that the seller had made upgrades or improvements to the house to warrant this $50,000 increase.
This was a crystal clear sign that the home was overpriced. If you’re thinking about buying a home that is listed for much more than the seller paid for the home, ask about the improvements or upgrades that they made while owning the home.
The amount of time that a home has been on the market can sometimes be an indicator of a sellers motivation level. If a home has been listed for 6 months and hasn’t sold, there’s a good chance the seller is going to be motivated to sell their home.
Before making an offer, ask your real estate agent about the listing history of the home. Find out if the home has expired and been relisted as well as what the pricing history has been. It’s possible if a home has been on the market for a substantial amount of time that it’s overpriced.
Buying an overpriced home can be very tricky and in many cases is unsuccessful. Most people would assume that a seller whose home has been for sale for several months would be open to any offers, however, this is not always the case. Some sellers believe that their home is not overpriced even though it’s been for sale for a lengthy amount of time and has continued to receive low ball offer after low ball offer.
Many buyers don’t ever think about the current state of the local real estate market, which can be a costly mistake. It’s highly recommended that before even looking at homes that buyers understand the real estate market.
A buyer who understands whether the real estate market is a sellers market, buyers market, or a balanced market has a huge advantage over buyers who don’t even consider the state of the market. For example, buying a home in a sellers market often means competing with other buyers and paying close to or over market value. One the other end of the spectrum, buying a home in a buyers market often means less competition and the potential of paying less than market value for a home.
Before making an offer on a home, it’s vital you understand what the state of the market is. There are several indicators and real estate statistics that can help you understand the state of your market.
One of the most popular real estate statistics that helps clarify the state of a market is called the market absorption rate. The market absorption rate in real estate is the number of months remaining until the current homes for sale are sold. If the market absorption rate in your local market is 4.5, this means that it would take 4.5 months for all the remaining homes to sell.
Market absorption rates of 4.0 or less, in most markets, indicate a sellers market while market absorption rates of 6.0 or greater indicate a buyers market. An experienced buyers agent will be able to help you navigate through the market absorption rate and help you understand better what exactly it means in your local market.
Before making an offer on a home, it’s critical that you find out if there are any issues with the home. While it’s impossible that every homeowner is going to be upfront and honest about issues with their home, it doesn’t mean you shouldn’t ask the question.
Disclosure in real estate is a highly debated topic. There are lots of different opinions on what do home sellers have to disclose when selling a home. It’s highly recommended that when selling a home, if a seller is on the fence about disclosing something, they should disclose it.
Even if a seller discloses potential issues with their home doesn’t mean there aren’t others. For this reason alone, you should have a home inspection performed when buying a home. There are way more reasons to have a home inspection when buying a home than reasons to skip the inspection.
It’s impossible to predict the future, however, future development in a neighborhood is planned for several years prior to it actually taking place. A great question to ask before making an offer on a home is if there is any future developments planned for the neighborhood.
The main reason why it’s important to know if there are future developments planned is because it can drastically change a neighborhood. If there are discussions being held about a block of homes being torn down for a retail strip mall in a neighborhood, this is something that you’d want to know. Something like this can impact the appeal of a neighborhood as well as the values.
Successfully choosing a neighborhood when buying a home is at the top of most buyers lists. It can be a costly mistake if a neighborhood is expecting dramatic changes in the future.
Owning a home costs money. There are unpredictable costs of owning a home, such as replacing a heating system. Before making an offer on a home, it’s vital to know the ages and condition of the homes major mechanics. A homes major mechanics include the roof, furnace, central air conditioning, and windows.
If you’re going to make an offer on a home that has a roof that is nearing the end of it’s life expectancy, it’s important you know this so that you can budget for the replacement cost. Another popular culprit that leads to buyers remorse is unexpectedly having to replace one of the major mechanics in a home.
This can often be avoided by simply asking the age of the mechanics before making an offer on the home. Keep in mind that just because a heating system in a home is only a few years old doesn’t mean it’s not going to break down for another 20 years. There is no crystal ball to home repairs, however, knowing the ages of a homes mechanics greatly reduces the chance of any future surprise repair or replacement expense.
Understanding what a sellers timeline is another important thing to ask about before making an offer on a home. Does the seller need additional time to move out? Does the seller need to find suitable property? Does the seller want to close as soon as possible?
Not only is it important to understand a sellers timeline so that you can make sure it works with your timeline, but it also can help structure your offer to be more attractive to a seller. If you’re currently renting and need to be out of your apartment in 90 days but the seller requests 45 days to find suitable property, entering in an agreement may not be a good idea.
Sellers who include suitable property contingencies in their listings often struggle to find buyers because there is a strong level of unknown for a buyer. If a seller cannot find a property that they feel is suitable, they don’t need to sell their property which means a buyer can be under contract on a home that they don’t really know if they’ll eventually own.
A fairly common saying in real estate is that a sellers first offer is typically their best offer. Before making an offer on a home, finding out if there have been any other offers can sometimes indicate to a buyer the accuracy of a homes list price.
If there have been other offers and they weren’t accepted, this should bring a handful of other questions to mind, such as;
It’s highly unlikely that you’ll be able to discover what previous offers were. A listing agent is not allowed to share the specifics of other offers unless the seller gives them permission.
Prior to entering into a contract to buy a home, it’s crucial that you understand what all the costs will be. This eliminates any surprises at the last minute which is great for additional peace of mind.
So, how do you find out what the costs of buying a home are? The best way to find out what all the costs will be is to ask the mortgage originator who’ll be able to supply a detailed cost breakdown. This includes down payments, transfer taxes, attorney fees, underwriting fees, and any other costs that may apply to buying a home.
As you can see there are a lot of things that buyers should be questioning before making an offer on a home. Asking these important questions can have an impact on whether you decide to move forward with an offer and also can help determine how much you should offer. By asking these 10 important questions, a buyer will be more comfortable with their decision to pursue the home.
Are you thinking about buying a home in Rochester NY? These questions should be asked before making an offer on a home! It’s vital that as you’re shopping the homes for sale in Rochester NY that you have an experienced buyers agent working for you. If you have yet to hire a top buyers agent in Rochester, contact me so we can discuss your home search!
About the authors: The above article “Top 10 Questions To Ask Before Making An Offer On A Home” was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise.
We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.
© 2017 – 2016, Kyle Hiscock. All rights reserved.
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