Buying a home is one of the most significant investments you’ll make in your lifetime, and there’s a lot to navigate–especially if it’s your first time. As such, it may be a good idea to find an experienced real estate agent committed to assisting you. Working with an agent gives you access to their knowledge, and they can help you through the process of making an offer and beyond.
Here are six important questions you may want to ask your real estate agent before making an offer:
1. How does the asking price compare to similar homes in the area?
Having a strong understanding of the real estate market is extremely valuable. Knowing how many similar properties are currently on the market in the neighborhood and their asking prices is only the beginning. You may want to ask about the prices of comparable homes that have sold within the last three to six months. And keep in mind how buyer demand and mortgage interest rates in the past compare to now.
All this information can help you estimate the current market value of your home of interest and how much you should realistically offer.
2. How long has this home been on the market?
This question can help determine the seller’s motivation. If the property has been on the market for a long time and has undergone repeated price reductions, the owners may be motivated to sell soon. In contrast, if it’s been on the market for a long period at a high price with no reductions, they may not be serious about selling or realistic about the present value of their property.
3. Are/were there any offers on the table?
This answer can also reveal the seller’s motivation and the market value of the home. If there are multiple offers in play, a seller is unlikely to accept a weak offer. If many bids have fallen through, the seller might be overestimating the worth of the property or there may be an issue with it.
4. Are there any known issues or repairs needed on the property?
Issues or required repairs may impact the value of a property as well as financing choices. Full disclosure of known flaws will assist you in budgeting for necessary repairs and can even be used as a negotiating tool to reduce the sale price. It might also help you decide whether to walk away from this home and look for one with fewer problems.
If you do decide to make an offer, the response to this question does not take the place of a buyer’s inspection. The operative word here is “known,” and you don’t want any surprises after the contract is signed.
5. What is the seller’s preferred timeline for closing?
Understanding the seller’s preferred timetable and expectations can help you plan your own timeframe and ensure a smooth closing process. This information could also be used to strengthen your offer. Maybe the seller wants a quick closing or perhaps they need to live in the home for a while after closing. If you are willing to accommodate the seller’s needs, your bid may become more appealing.
6. Are there any other costs I should keep in mind beyond the mortgage?
Ask this question to understand the true costs of buying a home. Before you make an offer, your agent can go over any additional costs. Here are some of the most common ones:
- Homeowner association (HOA) fees: If your property is part of an HOA, you’ll have to pay fees that may cover the costs of maintaining common areas and any amenities.
- Closing costs: Fees charged by lenders and third parties for services related to the sale, such as appraisal, title search, and attorney fees.
- Property taxes: The amount you owe will depend on the value of your property and the local tax rate.
- Insurance: You’ll likely need homeowner’s insurance to safeguard your home and personal belongings in the event of fire, theft, and so on. You may also want to get life insurance to ensure your heirs can continue paying the mortgage, even if you pass away unexpectedly. A permanent policy, such as whole life insurance, offers lifelong coverage and other features, including a flexible cash value component that you can borrow against for any reason, including to finance unexpected home repairs.
- Other expenses: This includes repairs and maintenance, utilities, landscaping, and upgrades.
Keep in mind that these costs can add up, so consider how they fit into your budget before making an offer on a home.
The primary purpose of permanent life insurance is to provide a death benefit. Using permanent life insurance accumulated value will reduce the death benefit and may affect other aspects of the policy.