When purchasing a home, it seems obvious that the best decisions are informed ones. But when you fall in love with a location, a floor plan, a backyard, a gourmet kitchen, or an on-suite master bedroom, you might forget to ask tough questions or do a little research. Emotions often outweigh rational decision making. Below is a list of questions your Realtor® should ask the listing agent of any property you’re considering purchasing. While sellers are not necessarily required to answer everything, you’d be surprised how much information you can get when you ask! Also listed are a number of things you can research on your own or with the help of your Realtor®. Seek as much information as possible before you jump to filling out a purchase contract.
Questions to Ask Before Making An Offer
1. Has the property already been inspected for termites, radon, mold, structural issues, or anything else? Was there a whole house inspection done? If yes to any of the above, ask to see reports.
2. Have the sellers made any insurance claims on their home insurance policy since owning the home? If yes, what were they? Ask to see any written reports regarding the claim or any repairs.
3. Has the property been recently appraised by another buyer to obtain a loan to purchase? If so, did the property appraise at or above the sales price?
DIY Research or with Your Realtor’s® Help
Before making an offer, know the property’s MLS history as it may reveal information that influences your price offer strategy. You may also want to know about other financial obligations that affect the property’s salability. Sometimes a lien on the property or a legal dispute could affect your ability to purchase. Here’s a list of research actions you can take to exercise due diligence.
1. Your Realtor® has access to MLS (a local database of registered homes on the market called the Multiple Listing Service). He or she should run the property history on MLS to see if the home has been on and off the market in the past or has frequently changed pricing. This history can be telling, for example, of whether the seller has been overpriced and unyielding to current market pricing conditions.
2. Google the property address to see if anything notable comes up.
3. Go to the County Auditor’s site and do a property search. The site contains valuable information such as who the owner is, the status of property tax payments, lot lines, value histories, and possibly other parcels that adjoin the property.
4. Go to the County Recorder’s site to identify potential liens on the property. (A thorough title search is usually done at the seller’s expense and should turn up this information. However, the title search is normally done after you’ve already signed a purchase contract and all parties are fulfilling the contract terms prior to closing.)
5. Go to the County Clerk of Court’s site to identify legal actions involving the property owner (judgment, divorce, foreclosure, etc.) as these things can affect the process of your sale.
6. Know whether the home is subject to an HOA. A seller is supposed to provide all HOA documentation (at his expense) for review so that potential buyers are aware of rules, regulations, covenants, and restrictions. Documentation should include financial statements of the HOA and minutes of meetings in the last year. Find out what amount the HOA holds in reserves to properly care for common areas and the exterior structure. Take note of whether there have been increases in monthly or annual fees, any assessments on the property or common areas, and any new restrictions being adopted.