Making an offer on a house is one of the most exciting parts of the home-buying process.Before you do, though, there are several steps you should make sure you’ve completed so that there are no surprises waiting after you’ve signed on the dotted line, received the keys and started paying the mortgage.
Make sure you know the following before you make an offer.
Why is the home up for sale?
Finding out the motivation of the seller is a great first piece of information to gather. If the sellers are relocating for a job, a family situation or due to some other “life” situation, it becomes easier to get a good deal on the home. If you see something in the listing like “motivated sellers,” usually the seller is willing to consider any reasonable offer in order to complete the sale as soon as possible.
If you find out that the home is for sale due to a wave of illegal activity in the neighborhood, unbearable neighbors or noise that disrupts the daily activities of the property, you may want to reconsider. Don’t be afraid to do some major research on the neighborhood before you make an offer on the home. If you covet a quiet, peaceful home life, you probably don’t want to live within walking distance of the local airport or next door to a noisy nightclub.
How new are the structural and mechanical components of the home?
Finding out things like the age of the HVAC system and the roof can give you a good idea on how much time you’ll have before you have to begin investing more into the home. You may not be interested in buying a home for $150,000 and then having to spend an additional $50,000 in home repairs and replacements within the first year.
For instance, according to The Balance, new roofs have a life expectancy of anywhere between 15 and 50 years, depending on the material they are made from. If you find out that the seller has put a new metal roof on the home within the last year, you may be looking at decades before you have to worry about replacing it. Many states require the seller to provide the age of the home’s components at the time of listing, but even if your state doesn’t, this is the kind of information you will still want to find out.
Are there any other additional costs with this home?
Paying a mortgage consisting of principal and interest isn’t the only thing you have to consider when figuring out if the home you like fits within your budget. You’ll also need to factor in homeowners’ insurance, any potential HOA fees and the monthly utility bills attached to the home. Remember, there is much more to affording a home than a monthly mortgage payment, so you’ll need to be sure that there’s room in your personal budget for every dollar that goes out.
Have you thought about repairs? If there are components of the home that have to be repaired before the property can be sold, you’ll need to find out who is going to pay for those repairs. This is a major part of the negotiation process, so you’ll need to know who is responsible for fixing issues that may prevent the sale from going through.
How long has the home been on the market?
This is the concept at the very core of “supply and demand.” Typically, a home that has been on the market for an extended period hasn’t been sold for a reason. Maybe the asking price is too high? Maybe the seller has just been experiencing some bad luck? Maybe there’s an underlying issue with the property?
Make sure to ask your real estate agent how long houses typically take to sell in your market and see if the agent can find out what has caused the property in question to not sell. This will give you an advantage in negotiation and let you know if you even want to pursue the property.
Truliant Mortgage Services can help untangle the home-buying process. Whether you’re just starting the journey or are looking for a lender, we’ll be happy to answer any questions, review your loan options to maximize your budget or even help you build a plan to buy in the future. Give us a call today!