In my previous post about the basics of buying a home, I mentioned some point that you should be aware of.  One of the points is to know the right questions to ask.  Here is a list of questions I always make sure to ask:

1. Why is the seller selling? – This question is solely for negotiation purposes.  I wrote previous posts about negotiations, which you might want to check out.  In this situation, you want to know more information about the seller’s position.  Did they buy another place already? Are they moving out of state? Are they upgrading to a larger place? Essentially, you want to know how motivated they are to sell.  If the seller has already bought another house, they are likely paying two mortgages and are pretty desperate to sell soon.  This puts you in a strong position to negotiate.

2. How much of the building is owner occupied? – This is only if the property is a condo in an apartment building.  The % of owner occupancy can play a role in your financing options.  More on this later.

3. Does the tax figure include a residential tax exemption? – Usually, the seller will let you know what the tax expense is each year.  Many towns will give you a residential tax exemption and allow you to pay lower taxes each year that you live in the apartment.  If it is an investment property in which you are not living there, you won’t get the exemption. This is good to know, so you can see what your monthly expenses will be to own the house.

4. What kind of heating system and how old is it? – The type of heating system can make a big difference in your monthly costs.  Oil can be costly and annoying to have to get heating oil delivered to your property.  You want to make sure that it has been updated and is working well.  Of course, many of these things will come up in inspection, but it never hurts to know before you make an offer.

5. How old are all the appliances, windows, roof, water boiler, etc? – It is good to know how old things are and the last time they were renovated as they could impact your valuation of the property.  If the roof is likely to need to be repaired in the near future, you want to know that.

6. How is the condo association? Are there any anticipated extra condo association expenses? – Of course, this only applies to condos.  You want to know any future expense that could occur.  Sometimes, condo associations want to make repairs to the building as a whole and it is up to the condo owners to pay for this.  You want to know ahead of time if there are plans for this so you know that you will need to pay that once you own the condo.

7. Have you been showing the property a lot? – This is another question to gauge your negotiation strength.  If the house has been shown a lot recently, you might have a lot of competition.  If it has not been shown much at all, you know the seller doesn’t have many potential offers to choose from.

Does anyone else have any good questions to ask?

As a part time real estate agent, I wanted to share some tips and advice for potential buyers. It is a very good time to buy a home at this time, but buying a home can be stressful and is a major purchase for most people.  Here are some important steps and details to understand when looking for a home to buy.

1. Always work with professionals – If you are buying a home, get yourself an experienced real estate agent who has extensive knowledge of your area of interest.  The agent representing the buyer splits commission with the seller’s agent so he/she will not cost you anything anyway.  It is true that you could try to do the transaction without the agent and negotiate for a lower price, claiming they don’t need to pay the portion of the buyer’s agent’s commision, but the seller’s agent will need to take a hit in commission.  Also, this is not a wise tactic for first-time homebuyers since they are inexperienced and need the advice of the real estate agent.

2. Shop around for the best mortgage rate & understand all your financing options – Everytime I walk into a local bank and look at the mortgage rates, I cringe.  Not only are the rates much higher, but they also make you pay points (pay percentage points of the loan upfront to lower the rate).  Make sure to look around for the best rates.  Another post will come with more details about this.

3. Be organized – Be very organized with your paperwork.  You will need to provide a ton of information for your mortgage provider so make sure to have all your personal financial information in order.

4. Don’t buy a house you can’t afford – This is a simple concept and is self explanatory.  Make sure you still have savings after you place your downpayment and don’t buy a house that that requires monthly payments that are too much for your salary.

5. Value the property correctly – The worst feeling is to realize that you paid too much for a property. There are a few ways to value a property.  Make sure you do your homework and find a price for the property that you are comfortable with.  Do not rely on the list price as an indicator or the value of the property.  Here is a previous post about how to value a property.

6. Ask the right questions – When you go to see a property, there are plenty of questions you should be asking.  Some questions can help you negotiate better and some will give you more information on the condition of the property. Another post will follow with some examples of good questions to ask.

Hello to my readers! I am still alive!

I apologize for not posting in a while.  I have been busy with redesigning my blog so that it looks a little more professional and is easier to read.

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I will now be posting regularly again and my next post will be some advice for steps to buying a house.  Please subscribe to my blog and I look forward to exploring the world of personal finance, investing, saving, growing networth and working towards an early exit (early retirement) with you all!