If you’re like most people who are just beginning the process of purchasing a home in a new community, you’re probably experiencing a mixture of excitement and apprehension.
You’re excited because you’ll be moving on with a new chapter in your life, but you may be apprehensive at the thought of navigating the home buying process, even if you’ve purchased property before.
It’s important during the early phase of the home buying process to hedge your bets as much as possible. Asking the right questions is an essential part of coming to a good decision before you make an initial offer on a house. Following are five questions you need to ask.
Why is the Buyer Selling the Home?
Knowing the real reason, the buyer is selling the home provides an excellent tool for gauging how much negotiating room you have when making an offer to purchase.
For instance, if the sellers have accepted a job offer in another part of the country, they may be more anxious to sell their home more quickly than if they simply decided to downsize but stay in the same community.
If the sellers are in no particular hurry to move, you probably won’t be able to tempt them by offering a price that’s lower than their listing.
What Are Comparable Properties in the Area Selling For?
It’s also important to know what similar properties in the community are selling for so you know how to make a realistic offer.
Your real estate agent will be happy to show you listings of other properties so you can get a good idea of the median price in the area for the type of home you’re interested in buying.
It’s also a good idea to do a little research on your own on this subject by looking at online listings and driving around for first-hand views of comparable properties.
What’s the Overall Housing Market Like in the Area?
You’ll also have more room for advantageous negotiations if the overall housing market in the area is somewhat depressed.
In a buyer’s market, sellers know they’re at risk of waiting quite a while before their homes sell. On the other hand, if it’s a seller’s market, you’ll be competing with numerous other interested parties, and if you don’t act quickly, you run the risk of losing out on the home you want. In super-hot real estate markets, interested buyers participate in heated bidding wars.
Has the Home Been on the Market for Long?
If the home has just been put on the market, sellers will probably be less likely to accept a low offer than their counterparts who’ve been waiting for months to sell their house.
On the other hand, if a home has been languishing on the market for a long time, there may be an underlying reason why it’s not selling.
Does the Seller Have an Assumable Mortgage?
If the seller financed the property using certain government loans, such as VA loan or an FHA streamlined loan, you can assume the mortgage and save substantially on loan costs.
As an added benefit, you’ll be able to enjoy the same mortgage rate as the original buyer. Keep in mind, however, that you’ll have to meet the guidelines for the type of loan you want to assume.