Buying a home is a major milestone regardless of where you are in life. The reason is because it’s a big purchase and you plan to live there for at least a year. The home will become YOUR home so it makes sense that there is a bigger emotional aspect to it than an investment property.
To help decide whether a property could be your next home outside of the cost, here are five questions you should ask your agent to find out:
1. Have there been any offers? What has been the level of interest for this home?
This question will gauge the level of activity this home has generated and how much competition you may have on the home. The answer to this question can be very insightful for you on how you should present your offer if you make one.
If a home has been sitting on the market for several weeks and there have been no offers submitted, this is a great chance to get a property for below the asking price!
If there were past offers, find out why the deal didn’t go through. Maybe an inspection report came out with a problem. The listing agent should be disclosing it. Maybe it was a financing issue on the previous buyer’s side, which shouldn’t be a big deal to you.
2. Why is the seller selling?
By asking this question, you would learn the motivation behind the sale. There are so many reasons why someone is selling a home, but some reasons are more time-constrained than others.
For example, a seller could be selling because they are moving to another city. If that seller has children and it’s near the end of the summer, the seller may be very motivated to sell as the school year is about to start.
If the property is owned by an investor, it’s important to consider why the investor is selling. Are they looking to offload a headache or are they looking to use the equity for another venture?
Understanding the motivation can give you insight to the seller’s timeline and by asking this question, the listing agent may be very transparent about the seller’s reasons. The listing agent may even tell your agent that the seller is open to below-asking offers!
3. What price did the seller buy this property for?
For most states, this information is publicly available. In states like Texas, it may not be publicly available on Redfin or Zillow, but available to agents with access to the MLS.
By knowing what price the seller purchased the property for, you can gauge how much equity they have. With more equity, sellers are often more flexible. If the seller has minimal equity, they probably don’t want to lose money unless there’s a strong outside motivation to get rid of the property.
A common example of this is when a seller buys a property at the peak of the market thinking they can sell it for a profit later, but the home values decline. They decide to offload their property and price it just to make a small gain or to just break even.
4. What are recent renovations / upgrades in the last few years?
Some renovations can be easy to spot and others are not as obvious. Rather than waiting for an inspector to provide you an estimate of when certain appliances or renovations took place, it’s a good idea to just ask the listing agent to get the most information.
Items like HVACs and water heaters can be somewhat determined on the manufacturing date, but to get the most accurate data, you would want to know the installation date.
Big upgrades like plumbing are not so obvious since plumbing can be underground. Knowing when pipes were replaced, what material was used, and why it was replaced are important pieces of information to know when buying a home.
5. Can you provide documentation on the renovations / upgrades during the inspection period?
Having receipts is a great way to know which company did the work and to check if warranty is transferable. Major projects like foundation repair can cost tens of thousands of dollars. It would be a big expense if there needed to be another repair to the foundation within a year of the last repair after buying a home to fix the same issue!
Warranty transfers can apply to the work by the company and the appliances themselves. If anything needed to be re-done, it would be crucial to have this information before you close and the seller is long gone.
Final Words
Asking these simple questions will give you a lot of insight into strategizing on making a competitive offer and protecting yourself as a buyer. Because this property could potentially be your home for years, you should be as well-informed as you can be as a buyer during your home search as well as during the inspection period.