During the purchase of our first home we wish we would have known that education is the key. That knowledge is power. Had we known what questions to ask, it would have saved us a lot of time, money, and resources. I hope you find these tips as helpful as they were to us when we purchased our second home. It made a world of difference between the two transactions!
#1. How do I begin the process of buying a home? Questions to ask yourself:
- Should I rent or own?
- Am I ready to buy a home?
- How much can I afford in a monthly mortgage payment?
- How much space do I need?
- What area of town do I like?
- Talk to family and friends.
- Drive through the neighborhood-When you’re buying a house, it’s not just the house, but the neighborhood/community you’re buying.
- Look in the “homes” section of the newspaper- this will give you a basic idea of the kinds of homes and prices that are currently on the market in your area.
#2. How does purchasing a home compare with renting?
- The one advantage of renting is that you are generally free of most maintenance responsibilities.
- Many advantages to home ownership are:
- Your chance to build equity in your home.
- Tax benefits.
- Protection against rent increases.
- Freedom to decorate your home the way you want.
#3. How do I know if I’m ready to buy a home?
- Do you have a steady job (or source of income)?
- Have you been employed on a regular basis for the last 2-3 years, or do you have a good reason that you weren’t?
- Is your current income reliable?
- Do you have a good record of paying your bills?
- Do you have some credit history-can you show that someone lent you money, and that you paid it back per the agreement?
- Do you have money saved for a down payment, or gift funds available to you? (If you’re not able to make a down payment, check with your lender to see if they offer a 100% financing option!)
- Do you have the ability to make the mortgage every month, plus any additional costs? (taxes, insurance, HOA, etc).
#4. How do I know what I need in a home?
- Make a list of your priorities-Establish a must have list and wish list. (location, size, amenities, etc).
- Realtors love it when you know exactly what you want/need when looking for a home! 🙂
#5. What should I look for when deciding on a community?
- What community will fit into my daily lifestyle- find out what your neighborhood allows. Do they allow gardens, small sheds, playgrounds, pools, etc?
- What are the schools like?
- Do I want convenient access to shopping, transportation, libraries, museums etc?
- Do I want peace and quiet of a rural community? Location is everything!
#6. How do I find a good real estate agent?
- Interview them
- Don’t be afraid to ask questions. (ex. Why should I hire you as my realtor?)
- Ask your family and friends for a referral.
#7. How can I find out how much homes are selling for in certain communities and neighborhoods?
- Ask you’re real estate agent! They can quickly and accurately get you the information you are looking for!
#8. Is an older home better value better than a new one? A lot of this is simply personal preference. Do you like the character in older homes? Do you want something new and completely updated?
- Individual characteristics
- Maintenance (a concern with older homes)
- Architecture and structure
- Energy efficiency
#9. What should I look for when walking around a home?
- Is there enough room for both the present and the future?
- Are there enough bedrooms and bathrooms?
- Is the house structurally sound?
- Do the mechanical systems and appliances work?
- Is the yard big enough?
- Do you like the floor plan?
- Will your furniture fit in the house?
- Are there storage places?
- Does anything need fixed or replaced?
- Will the seller repair or replace items?
- Imagine that house in each season
- Will you be happy with it year-round?
#10. How long will I be living in this home?
– Things to consider:
- Just get out of school and looking for a first home?
- Early family-are you planning on raising a family in the home?
- Empty nester- will you be downsizing soon?
#11. How can I keep tract of all the homes I see?
- Take a picture of each home your like.
- Put in binder with your checklist.
- Write down pros and cons-this really helps when needing to make decisions.
#12. How many homes should someone look at before choosing one?
- Visit as many as you want!
- Communicate with your realtor what you like or don’t like-this is a big one.
- Organization-stay organized when you do your search.
#13. I found a home, what types of inspections are required?
- Get a home inspection first and then assess the inspection before you incur any other expenses.
#14. What does the inspector do, and how does the inspection figure in the purchase of a home?
- Checks for safety of home.
- Focus on structure, construction, and mechanical.
- Makes you aware of what repairs are needed- how much does it cost to repair?
- Use a qualified and experienced inspector-very important!
- Before you sign the final offer, make sure to have an inspection clause.
#15. Do I need to be there for the inspection?
- It’s not required, but always a good idea! That way the inspector can walk you around the property and point out his findings.
#16. What are home warranties, and should I consider them?
- They offer protection of possible costly repairs.
#17. How can I find information on the property tax liability?
- Should be included on the listing.
- Ask the seller!
- Check with the local tax assessors office.
#18. Do I really need home owners insurance, and how do I get a good rate?
- Yes, home owner’s insurance is a requirement.
- Shop around for a good rate!
- Ask for referrals from realtors and friends
- Flood insurance may be required. Check with real estate agent or insurance agent for flood plan information.
- Tip: Use the same insurance company as your Car and Life insurance for a better discount.
#19. I am ready to make an offer-how do I determine the initial offer?
Your offer should include: (your real estate agent will help you with this!)
- Complete legal description of the property
- Amount of earnest money
- Down payment and financing details
- Proposed move-in date
- Length of time offer is valid
- Details of the deal-what stays and what goes?
- Remember: be prepared for a give and take negotiation!
#20. Do you need a lawyer to buy a home?
- Laws vary by state.
- Ask you real estate agent!
Have fun house hunting! 🙂