Questions to Ask When Buying A Home
There are a lot of questions you should ask yourself, and others, before buying a house. This helpful Q&A style post can give you an idea of what to look out for when buying a house. To maximize your house hunting time, keep these top questions in mind.
How Much Money Do I Need to Buy A House?
There are many costs involved in buying a house. Closing cost calculators can give you a rough estimate of how much money you’ll need to purchase a home, but to get an accurate idea of how much you’ll need the best thing to do is talk to a lender. They will provide you with a Loan Estimate within three days of applying for a loan.
Here’s an overview of what you’ll need to have saved up:
Down payment
Generally, you will need a minimum of 3% to 20% for a down payment. Each type of loan requires a different amount so when you talk to your mortgage company, let them know how much you have available.
Closing Costs
In most cases, closing costs run between 2% to 5% of the purchase price of the home. This is in addition to the down payment. Your lender can go over this with you and explain each cost.
Reserves
Although this isn’t a “cost,” the underwriter will want to see that you have some reserves in your bank account. This shows them that you’re not using every penny you have to get into a home.
How Much Will Insurance Cost?
If this is your first home, you should be aware of additional expenses for insurance you will be required to have that you didn’t have as a renter.
Homeowners Insurance
Although you might have had insurance on your personal property as a renter, this type of insurance covers the structure. When you talk to your lender, they can give you an idea of how much this will be. Be sure to find out right away if the property you’re looking at needs any special insurance as this can affect your premium. For example, if you’re looking to buy a new home in Florida, you might be required to have flood insurance. Or if you’re moving to Northern California, you may need earthquake insurance.
Shop around for your insurance policy because the cost can vary significantly from company to company. Your loan officer may have someone they can recommend.
Private Mortgage Insurance
If you put less than 20% down, you will be required to carry Private Mortgage Insurance (PMI) in addition to your regular homeowners insurance. PMI adds approximately 0.5% to 1% to the loan amount yearly. That means for a $300,000 loan you could have an additional monthly payment of $245 for PMI.
Are There Any Homeowner Dues?
Homeowners Association (HOA) Dues
What is an HOA? Well, many planned communities and condominium associations have monthly homeowner dues to cover the upkeep of the community along with maintenance for any amenities like swimming pools or golf courses. You’ll want to know upfront if there are any monthly dues and the amount because it can make a difference in your budget. You’ll also want to find out the history of the dues, if they are raised often, and exactly what they cover.
If you’re purchasing a condo or townhome, the exterior property maintenance is often included, so even though you have dues you might be saving on maintenance costs.
One Time Assessments
If there is an HOA, ask about past, present, and future assessments. You don’t want to be surprised by a bill you weren’t expecting. If homeowners are being assessed too often, it could be an indicator that the association is not handling the finances correctly.
Am I Willing to Buy A Fixer-Upper or Do I Want A Home in Perfect Condition?
Unless you’re purchasing a brand new house, your home will likely have things you’ll need to repair or upgrade within the next few years. Ask lots of questions and write down the answers. Things like fixing a squeaky floor may not be a big deal, but, replacing all your windows can set you back a few bucks. The last thing you want as a new homeowner is to be overwhelmed with unplanned expenses. Here are just a couple of things to keep in mind:
Is the floor plan dated?
Older homes have smaller rooms compared to newer homes with open floor plans. Knowing what you want upfront and how much work you’d be willing to do can help eliminate homes that don’t fit your needs. Moving walls and reconfiguring rooms are often large renovation costs.
Will the windows need to be replaced?
Keep a lookout for old windows -- they can increase utility bills by about 10% to 25%, according to Energy.gov.
How old is the HVAC?
Check the age and condition of the HVAC system. This will be covered during inspections should you put in an offer but it’s still good to ask when you’re looking.
What Should I Look for in a Yard?
Sometimes it's easy to fall in love with the interior of a home, but don’t forget the property itself. Here are some things to keep in mind as you evaluate your yard.
Do I want a swimming pool?
If you have your heart set on a pool, think about if you’d like an open-air one or if it’s essential to have a screened-in pool. Another alternative is to look at planned communities that have amenities like pools and golf courses so you can enjoy them without the upkeep.
What condition are the trees in?
Who doesn’t love trees in a yard, especially big mature trees that provide plenty of shade? But don’t forget about maintenance. Check to see if the trees are in good condition or if they will need significant trimming or pruning within the next year and take that into consideration when you put in an offer. Also, if there are lots of trees and a pool you’ll need to add a little more maintenance time.
Is the yard pet-friendly?
Do you have a family dog that loves to be outside? Take a look from your pooch’s perspective when checking out the yard. And while you’re at it, observe how noisy it is outside. Are there barking dogs on the adjoining properties that would make your life less than peaceful?
What Do I Need to Know About the Structure?
Along with the common things you and your real estate agent are already aware of, some other factors to consider are:
How old is the roof?
This is an important question and one that can affect your offer price. A high-end shingle roof lasts approximately 25 years, metal roofs last around 40 years, concrete tile 40 years, wood shakes 30 years. One big advantage of buying a new home is not having to worry about the age of the roof.
What will utilities cost?
Find out how much utility costs are and make sure you don’t just take one month’s amount; you’ll want a year average. If monthly bills are high, there may be a problem with old appliances, an inefficient HVAC system, single pane windows, or missing insulation. Check out the price of water, too. Some cities or counties have free or low-cost irrigation water that can make a big difference in keeping your yard green while saving you some green. Looking for energy efficient new homes can create some big advantages for your family and your wallet.
What’s the history of the house?
Once you know you’re interested in a home, ask for a copy of a CLUE (Comprehensive Loss Underwriting Exchange) report. This report will show you what insurance claims were filed within the last 7 years and is one of our best tips for buying a house.
Is the Garage Big Enough for my Vehicles?
If you love your SUV, it’s a good idea to check that it fits into the garage.
New homes have larger garages built for bigger cars whereas garages in older homes may be on the smaller side, so don’t forget to measure or you might end up stuck having to park outside. The average height for most garage doors is around 7 feet, which work for most cars but trucks or SUVs with racks won’t fit.
How’s the driveway?
This is especially important if you live in an area that gets a lot of snow. Navigating a steep slippery driveway might not be the way you want to start out your day. Another thing to note is how easy or difficult it is to get in and out of the driveway.
Is there enough parking?
If you have multiple cars or frequently have visitors, too little parking can be an issue once you move in. If you’re purchasing a condo or townhouse, find out how many spaces you have and how many spaces you’re allotted for any guests.
Is It Our Kind of Neighborhood?
Everyone wants to live in a top neighborhood, but each family has different priorities.
Is it kid-friendly?
If you have children, you’ll want to consider the quality of the school district and if the neighborhood is safe for the kids to play outside. Are there sidewalks to ride bikes? Is the house on a busy street? If you have a particular property in mind, you can check out the safety of the neighborhood on CrimeReports.com which has data from local law enforcement agencies.
Is it pet-friendly?
Don’t forget Rover. If you’re a family with pets, make sure they’ll fit into the environment too. This should be a significant consideration if you’re looking at townhomes or condominiums that may have restrictions on breeds and sizes.
What amenities are nearby?
If you love to play golf, tennis, fish, or swim, will you find those amenities close by? If being active is a significant part of your life, you’ll want to know what’s available in the area. Some planned communities even have a long list of amenities already built in for residents.
Who are your neighbors?
Before you buy, it’s an excellent idea to meet your neighbors. See if you have things in common and if you’ll enjoy having them next door. You just might be lucky enough to have found your new best friends.
What Are Current Market Conditions?
This is one of the most important tips for buying a house: You need to know the market.
Buyer’s or Seller’s Market
In a buyer’s market there are lots of homes to choose from at prices that are more affordable. In a seller’s market, prices are going up, and buyers are putting in offers higher than the asking price. It’s important to know if prices on homes are going up, leveling out, or going down.
Negotiation Tips
If you’re shopping in a hot market, ask how you can make your offer stand out. In a slow market, know if the asking price is reasonable or if it would be possible to offer less.
Listing Information
Get as much information about the property as possible. Ask how long it’s been on the market, if it was ever a rental, and if it was an expired listing. The answers to these questions will tell you if there’s any room for bargaining or not.
Future Expansion
Ask your agent if the neighborhood is in an upswing. For example, are there new amenities being built and upscale shops like Whole Foods moving in, or are there other plans that would make the location less desirable, like a new highway being built close by?
Buying a home is a big decision but now you’ll be equipped to make the best choices. At Pulte Homes, we help families find the perfect home for their lifestyle. Click here to start creating your dream home.
Contributed to Your Home blog by Carol Youmans
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Published 4.19.19