Preparing to buy a home is a stressful, daunting, and challenging process. It’s also one of the most exciting things you’ll ever do. After years of hard work, you’ve finally saved up enough money to make the transition. You’ll have more space, more independence, and more pride in your investment. While you might be anxious to find the home of your dreams and close as soon as possible, it’s important to get a lot of information beforehand. Here, we’ve outlined some of the most important questions to ask before purchasing a home.
#1. How much can I afford to spend?
The most important question to ask before buying a home is about the budget. The last thing you want to do is waste your time looking for properties that are out of your budget, or worse, sign a contract that you can’t uphold. In general, we recommend that you only take on mortgage payments totaling less than one-quarter of your current monthly income after taxes. Don’t forget to factor in HOA dues, property taxes, homeowner’s insurance, and more. To get a rough idea of what you can afford to spend, you can use an online mortgage calculator.
#2. How much will I need for my down payment?
While on the topic of budgeting, our next suggestion would be to ask questions about the down payment. Obviously, if you happen to have the money needed to purchase the home outright, do so. For the majority of people who have to begin paying a monthly mortgage, we recommend setting your sites on a down payment that is 20% of the home’s overall value. With this minimum, you can avoid any private mortgage insurance fees. If that’s not possible, be sure not to dip below 10%. At that point, you might want to look for a more affordable home for your budget.
#3. What are the “hidden” costs?
We’ve seen too many homebuyers go into a purchase without being aware of all related fees. Too many people think that the down payment and some insurance fees are the only expenses coming out of their paycheck during this process. The most obvious example of a “hidden” cost that people typically forget about is the closing costs. While it varies between homes, you’ll most likely be charged 2 to 5% of your home’s value. Moving costs are another crucial cost to bear in mind. It’s important to factor these in ahead of time so you can save up for them separately from your down payment savings.
#4. How can I furnish the home affordably?
The vast majority of homes are bought unfurnished. Unless you don’t mind sleeping on the floor for a few months, you should have a pre-made plan for furnishing your home. While hopping online and filling a virtual shopping cart with all new items is compelling in its convenience, we advise the average home buyer to avoid the temptation. It’s much more reasonable and affordable to either hire a moving company to transition your current furniture or buy some used items from thrift stores or Facebook Marketplace.
#5. What’s the history of the house?
It’s not necessary to buy new when looking for a home. In fact, you can save a ton of money without sacrificing much quality when buying a home that’s already been lived in. However, it’s always important to ask about the history of the home before making an offer. While the answer to this question won’t provide you with everything you need to know, it can certainly give you a better idea of what you’re potentially buying. If the home seems to have a fairly normal and uneventful history, then you can rest assured you’re on the right path.
#6. Are there issues with the property?
This question is a little more specific and definitely more direct than the previous one. Before buying a home, you need to know if there are any current issues. Maybe the roof needs to be replaced, the foundation needs repair, the garage door might be on the fritz, or perhaps there’s an insect problem. No matter what, you’ll want to ask the sellers and your real estate agent about any potential problems, so you know if you will be able to afford to fix them within a certain time frame. In addition, you should hire a home inspector to get an unbiased and professional opinion. After all, no owner will want to go on and on about everything wrong with the home they are trying to sell.
#7. What comes with the home?
When purchasing a home, too many people overlook what’s included in the deal. There are different laws regarding what needs to be included when selling a home. These rules vary by state. You don’t want to rush to make an offer only to realize that appliances, window treatments, lighting fixtures, and other major components aren’t included. Let these details impact what you’re willing to offer. You’d hate to finalize the purchase only to realize that your kitchen only has a few cabinets, a sink, and some frayed wires.
#8. What’s around the neighborhood?
Even though you’re buying a house, you’re also paying for its location. You’ll want to ask about what kind of grocery stores, restaurants, doctor’s offices, and schools are nearby. If you realize there’s nothing within reasonable driving distance, you might decide the property isn’t worth the price. Furthermore, if you aren’t comfortable with the quality of schools for your children then even the best deal in the world won’t make a difference.
#9. What price are similar homes being sold for?
This is a great way to determine the quality of your deal. While professionals can make estimates and real estate agents can give you there two-cents, actual deals are the most accurate way to gauge the asking price. Keep in mind that location plays a major role in the price of a home. Just because you find a nearly identical home in another town, that doesn’t mean it’s price will be comparable to the home you’re considering. Ideally, you’ll find a similar home in the same neighborhood or a nearby one for an accurate comparison.
#10. What kind of homeowners insurance can I qualify for?
Insurance is another important factor to consider before buying a house. Even if you find your dream home for an unbeatable price, that doesn’t necessarily mean you qualify for sufficient homeowners insurance. Be sure to talk with a professional to get an accurate assessment. The answer to this question will make it easier to determine whether or not making an offer is a smart financial decision.
Remember, the Webb Insurance Group is always here to help you find the answer to that tenth question, just give us a call!