Buying a house is a huge decision. Obviously, you want a place that you and your family will love to live in, but it's essential to let your choice be guided by your head at least as much as by your heart. After all, a home purchase is likely to be the biggest financial investment you make in your life. So be sure to ask your real estate broker these questions before you even think of signing on the bottom line.
Why are the owners selling and what is their timeframe?
If the present owners desperately need cash or have urgent plans to move out of state, they are what is known as "motivated sellers." This means they're more likely to be open to offers, perhaps even substantially lower than what they are asking.
It's helpful, too, to know when they'll be ready to vacate if you'd like to be settled by a particular date to start a new job or settle your kids in school.
How much have similar properties sold for in recent months?
A good real estate broker will be able to furnish you with "comps," facts and figures on similar properties in the area, their initial asking prices, and what they finally sold for.
How long has the property been on the market?
A logical rule of thumb is this: the longer the property has been up for sale, the more ready its sellers will be to negotiate.
Have they had any offers yet?
Find out the amount of previous offers, if any, and why they fell through. This will give you some insight into the seller's expectations.
Is the seller willing to negotiate the price or help with closing costs?
For ethical reasons, your broker is not permitted to tell you how much money to offer. However, you can discuss whether the seller is willing to be flexible on the asking price or to contribute to your closing costs, either of which will make the home more affordable.
Another way to approach this issue is to ask a simple "yes/no" question. Try something along the lines of: "Would the owner consider selling for $225K?" for example.
Are there any major defects such as mold or termite infestation?
When a home is being sold "as is, where is," that means that legally, the seller is not obligated to repair any problems. However, depending on the state where the house is located, he or she may be required to complete a disclosure form or to disclose specific defects. You can then decide whether you like the house enough to go through the hassle of termite extermination, for example, and ask for an appropriate reduction of the price.
Have all the upgrades the seller made to the home passed inspection?
Any remodeling work and other upgrades should have been done with the proper permits. If the seller is vague about this, you can investigate with the authority that issues building permits locally, to ensure that all permits were pulled and the job passed inspection.
Can I bring in my own inspector?
A licensed, experienced building inspector who is working for you is the best professional to tell you how sound the home is structurally and whether repairs or pest control measures need to be carried out.
Is the house located in a flood plain? If so, what type of flood plain and how much is the current owner paying for flood insurance?
You'll probably be expecting a "yes" to this question when you're looking for a cottage on the oceanfront. In other cases, the answer might surprise you.
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