QUESTIONS A HOME BUYER SHOULD ASK WHEN BUYING A HOME?
Ten questions to ask a seller when buying a home.
|Are you in the market to buy a home? Here are ten questions for you or your real estate consultant to ask a seller when buying a home. The answers can give you a real advantage in negotiating the best deal and finding a home that really makes you happy.
1. Why is the seller moving? This is the one question that every home buyer should always ask the seller when buying a home. Unfortunately, it's not always easy to get an honest answer. Sometimes, even the listing agent doesn't know the real reason the seller is moving.
If you know why the seller is moving, you can make an offer that will meet his needs. For example, if the seller needs a cashout sale and cannot help with the financing by carrying back a mortgage, it will help the buyer to know this. However, the seller may want the income that a seller-mortgage provides and could be willing to help finance the sale!
Some real estate agents feel the seller's reason for moving is none of the buyer's business. I strongly disagree. What if the sellers are behind in their payments and a foreclosure sale is eminent? The buyer must be prepared to close the transaction quickly. Or if the home is being sold because of a divorce, negotiations might prove to be difficult and time consuming. When the buyer asks the seller this question and knows why the seller is moving it can be an advantage to both parties.
2. How much did the seller pay for the home? The recorded price paid for a property is public information in most communities. Smart home buyers want to know this because the price paid affects how much negotiating room the seller has. If the seller bought the home many years ago for a very low price, there is a large potential profit and the seller might be willing to sell below the market value.
However, if the seller bought recently for a high price, there may not be much room for negotiation because nobody likes to sell at a loss. However, remember that the purchase price has nothing to do with today's market value of the home.
3. How much does the seller owe on the home? Public records also reveal what loans are on the property. The exact loan balance may have been paid down in the years since the home was purchased or refinanced. If the seller has a lot of equity, it may be easier to negotiate a better price.
If more is owed on the home than it is worth, the buyer may have to work out a "short sale" with the lender. Your real estate consultant should check out what loans are recorded on the property before you make an offer.
4. How did the seller decide the asking price? This is a serious question to ask a seller or their listing agent when buying a home. A good agent will gladly prepare a CMA (comparative market analysis) for you to review.
The CMA shows recent sales prices of comparable homes, the list prices of competitive neighborhood homes currently for sale and the expired list prices of homes that did not sell. After analyzing this information, with the help of their real estate agent, smart buyers can quickly figure out the fair market value of the home they are interested in.
5. Has the seller prepared a written Transfer Disclosure Statement? Most states require sellers and the real estate agents to prepare a written disclosure of material facts about the home. Usually, it's given after an offer is accepted. To prevent surprises, a buyer may want to see this statement before making an offer to purchase.
When a home is offered for sale "as is" (meaning the seller will not pay for any repairs), the seller and agent must still disclose all known defects. If the defects are severe, the buyer may decide to not buy the home, or will want a big discount off the market value.
6. Are there any nuisances or problem neighbors? These are important questions for buyers to ask a seller when buying a home. The answers will help you find out if you really want to live in the neighborhood. Find out if a noisy or problem neighbor is the real reason the seller is moving. It will be good to know if there are transportation system noises such as airports and railroads, or if there are any future roads or commercial development planned for the area. These factors can affect the future value of the property.
7. Are there any crime problems or is there any litigation? Savvy buyers will always want to ask sellers this question when buying a home You can always find out the crime statistics from the police department. It's also good to know if the police have been called into the neighborhood for any reason.
Construction litigation is rampant in both condominium and single-family neighborhoods. This can be a hassle and may hold down property values until it's resolved. Be sure to ask sellers about construction litigation. However, at settlement the properties involved in litigation are usually restored. Owners may receive new roofs, windows, siding, etc. and there can even be a welcome cash windfall.
8. What past problems have you had with this house? Seller disclosure forms do not require disclosing past problems that have been corrected. There may be some things that have been fixed that you want to know about. For example, major structural problems, plumbing and electrical defects, roof leaks, fire damage and drainage problems have a habit of coming back. It's good to know about these things so you can check out the remedies and be sure they were resolved successfully.
The last thing you want is to find out that the house had major problems from the neighbor next door, after you've moved in.
9. What is the reputation of public schools in the area? Smart buyers check the school rating statistics before selecting a neighborhood to buy a home. But, it's wise to ask the sellers and both real estate agent's about the schools.
Nothing adds more value to a neighborhood than fine public schools and nothing can hurt an area more than poor public schools. Sending your children to private schools is expensive, so be sure to check out the public schools during the contingency period.
10. What do you like the most and what do you dislike about this home? Asking sellers this open-ended question when buying a home gives the seller an opportunity to emphasize the home's best features and worst drawbacks. The seller's answers to these key questions will help you decide if you want to own the home or not.
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