Top 3 Questions from Home Buyers
When working with home buyers, I’m faced with a plethora of questions. Everyone has different needs, experiences, backgrounds and knowledge. However, there are some common themes. These are the top 3 questions I get when working with Home Buyers.
How do I know I’m not overpaying?
Home prices are determined by “Comparable Properties”, or commonly just called “comps”. Comps are generally defined as sold properties within ¼ mile in the last 6 months. Before a property is ever listed, a Realtor will consult with the owner and they will set a price. An agent will typically advise the seller of the recently sold comps as a means of determining the value of the property.
This method is the same method that an appraiser will use to determine a property. So what does this all mean? That means before you actually make an offer on a property, your Realtor should run comps on the home to see what recently properties have sold for to determine its value. If similar properties have recently sold for 300k, and a property is listed at 375k, it’s apparent we will be offering much lower than asking price. However, when a property that comps at 300k is listed for 275k, you can expect to pay over asking price of 275k. In this market this can be somewhat common, so don’t be alarmed if other buyers starting putting in offers at the same house that’s “underpriced”!
Lastly, when going through the loan process, you are required to obtain an appraisal. After all, the bank doesn’t want to lend you more than the property is worth. This protects not only the bank, but you as a buyer. If a property does not appraise for the sales price, the bank will not allow the loan to go through!
What if there is something wrong with the house?
Regardless of age, visual appearance, location, or type
of house, you should always obtain a professional home inspection. For a few hundred dollars, a licensed home inspector will come to the property and provide a thorough report on the condition of the property. They inspect everything from A/C, windows, plumbing, electrical, roof, pool, etc.
This report will provide very important information to you. You see, when you make an offer on a property, you typically have a 10 day inspection period in which to perform these inspections. At any time during the inspection period you uncover any defects in the house that you don’t like you can either A) back out of the contract without loss of any money, or B) give the sellers on opportunity to fix the proble
So – you should never be stuck in a situation where you are unaware of broken items in your new home. Inevitably, like any man made equipment or structure, homes do require occasional maintenance and updating. A Home Warranty is purchased on most homes that covers you should you have any issues with your pool, air conditioner, or any other mechanical pieces of your home. This way, there should be no worry when moving into your new home!
What part of town is the best? Where should I buy!?
Unfortunately this question isn’t as black as white. What you should consider are the following questions:
Do you have friends and family close? It might not seem so bad if your friends are a 45 minute drive away. However, I can tell you from personal experience you will see your friends that live 10 minutes away 10 times as often as your friends or family that live 45 minutes away!
Do your kids need to stay/go to a certain school district? While many districts have open enrollment policies, some do not. If you are outside of the district, you won’t have access to school bus, and their friends might not live as close. Determine if it’s an absolute necessity, or you can entertain multiple districts. Contact the school district you wish to attend to find out about out of district enrollment.
What’s your lifestyle? Most 20 somethings aren’t too excited about moving to a sleepy suburb. Do you want to be close to the art district? Do you prefer walking and biking than driving? Do you want to be close to colleges? Parks with families?
What’s in your budget? Of course the biggest factor will be price, can you afford WHAT you want WHERE you want? Can you settle with something smaller to get the location of your choice? Or would you prefer the larger house an extra 10 minute drive away. Often, this can change when you actually get out from behind the computer screen and LOOK at a house in person. Maybe you realize you don’t need something so extravagant after all….or do you?
Leave a comment