What Kind of Questions Should I Ask Before Buying a Home?

image shows a couple talking to a realtor in front of a large home with a for-sale sign in front of it. Text reads:

Image by Jiaqi Zhou © The Balance 2019

Most first-time home buyers jump into buying their first home because they've fallen heads over heels in love with the house. Before signing on the dotted line, there are three main issues that home buyers should address upfront: offering price, home condition, and location.

Offering Price

If you're offering a price based only on the other homes you have toured, realize those homes carry no weight for an appraisal until they close. You should base your offer on the comparable sales nearby and not on what other sellers are asking for their homes.

Home Condition 

Ask about estimates for repairs and don't make assumptions about the potential costs. You also shouldn't assume that you can deduct the cost of anticipated repairs from the sales price because the price might already be adjusted for that factor.

Location of Home

The location has a huge bearing on the sales price, and you don't want to buy a home in a bad location because reselling it will be difficult. With the advent of Zillow.com and other online information centers, a lot of the data you would like to know can be found on the web, but some of that information is incorrect. For example, a Zillow estimate can't accurately compute value on homes in neighborhoods where the size and configuration are nonconforming, but it can give you a general idea of value in the area. It's not a substitute for an agent CMA or an appraisal.

Price

Home buyers often compare prices of similar homes in the neighborhood before choosing a price, but the asking price may have very little to do with the actual value of the home or the price a buyer should offer. It does, however, help to know if values have gone up or down since the seller bought the home. If it's a foreclosure flipper, you might not be able to secure financing for 90 days. Don't focus on previous sales; use that information only as a guideline for your specific purpose.

If the seller owes more than the asking price, then you are looking at buying a short sale, or the seller will need to bring cash to closing. If a seller needs to write a check to close escrow, you will be very unlikely to get the seller to pay your closing costs or offer to pay for any repairs. It's better for you if the seller has a lot of equity.

The price of similar homes sold in the neighborhood is your best indicator of value because your bank's appraiser will rely on those comparable sales to compute the value. Your agent can obtain a list of recently sold properties for you. Some homes generate multiple offers, and in that event, your offer will need to be very strong to survive the competition. Don't back away from a multiple offer situation because the last offer submitted is often the winning offer.

You might be able to negotiate a discount on the price if the home has been on the market for 90 days or longer. All of this depends on the local real estate, however, and days on the market in, say, a rural area, could quite likely be 360 or more.

Condition

If you know in advance that the home has structural issues or deferred maintenance, you might want to consider those problems before choosing an offering price.

Roof 

Newer roofs have a life expectancy of anywhere from 15–50 years or more, depending on its materials. Not only should you care about maintaining the roof, but your lender might also require repairs before closing, and you should know who pays for that.

Foundation

Raised foundations allow access under the home to reach plumbing and electrical, as do homes with basements. Slab foundations are more common in newer construction. You should ask what existed in that area before the new homes were built to see if the builders put up a new subdivision over a wetland area that is now likely to have issues with drainage or dampness.

Insulation in the Walls and Attic

In colder climates, insulation is more important, and each locale sets standards for the R factor. Insulating a home after you buy it will cut down on your utility bills, but it doesn't increase your market value much.

Appliances and Systems

You should ask if any appliances or systems have been replaced, and if so, why. It's a plus factor if older plumbing and electrical have been updated, but some older appliances can't be repaired because parts are no longer available. Look beyond whether the appliances are the newest trendy color and make sure they work as intended.

Location

In real estate, one routinely hears it's all about location, location, location. Homes in desirable areas are worth more than similar homes in locations not so desirable.

Nearby Properties

Surrounding areas very much so influence property prices. For example, apartment buildings, commercial, and industrial tend to lower the value of residential around them. Remember, if the home is cheap now, it will probably be the cheapest home when it comes time to resell. Ask about all neighboring developments.

Neighborhood Demographics

Some title companies can supply this information, but your best bet is to talk to the neighbors, followed by asking the agent about the area and doing research at the library.

Location of Schools 

Schools are a huge concern for parents with small children. In California, even if you buy a home within the boundaries of certain school districts, there is no guarantee your children will get into that school. You should ask about nearby schools and know your options.

Nuisance Factors

Traffic from nearby restaurants or stores may be an irritant. With freeways in the distance, you might not hear the noise during the day, but as night falls, the clatter and constant hum may get louder. Even barking dogs can drive a person nuts. Ask about these often-forgotten factors to make sure you're not surprised.

The Bottom Line

Remember, real estate markets are subject to swings; it can be a seller's market, buyer's market, or neutral market. If your market is buzzing at the time, you might not have enough time to ask any questions before that home is sold to somebody else. Ask your agent to give you professional insights into the type of market.