So you think you have found the house you want. It’s been a long search, and you feel about ready to give in and move in. Before you take the plunge though, you should stand back a moment; this is a big commitment and there are a lot of things that could stand between you and the happiness you seek in your future home. There is also a good chance you can get a better price.
Why not put your broker to work and ask some key questions? They will help you determine whether or not the home you’re about to buy is actually a good deal. These are tough questions that could save you a bundle:
Why are the owners selling?
The broker doesn’t have to tell you (they're getting divorced, they’re moving to Dallas, etc.), but when you uncover the reason they’re selling, it tips their cards and is the best indicator of how anxious the seller might be. This in turn lets you know how willing they might be to negotiate.
How long has the house been on the market? Can you give me its pricing history?
A house that’s been on the market for two months with three price reductions gives a whole different message than a house that’s been on for two months with no price reductions. The owner of the first house is far more negotiable.
Can you provide me with comparable sales to support the sales price?
Bank appraisers use brokers to find similar home sales in the neighborhood. If the broker can provide comparables, you won’t be disappointed when it comes time to get your financing.
What’s the price per square foot in the neighborhood?
This brings the house price down to a common denominator. Every house is assessed and square footage is listed in the tax assessor’s office, along with the land area and whatever improvements have been made.
Is this the most expensive house on the block?
You don’t want to be buying the most expensive house on the block. The middle-priced homes always sell at the best prices.
Are the owners behind on their real estate taxes?
If the owners are behind in their real estate taxes, it’s often the earliest sign of a potential foreclosure. You might wait or negotiate hard. This public information can be found at the county clerk’s office and is often posted online.
When the real estate market last dropped in the late ’80s, how did this community do?Some towns weather a storm much better than others. This question will give you a historic perspective.
How many houses are in foreclosure in the area?Rates vary wildly and you shouldn’t be buying in an area drenched in foreclosures. For example, in Nevada almost half of all homes are in foreclosure.
How are the houses reassessed in the town?Some towns reassess when title passes, some when capital improvements are made, and some towns only every five years. Knowing how your taxes will increase in advance avoids surprises.
Are there any “unknowns” in the neighborhood I should know about?These include things like garbage routes, car repair shops, empty lots, landfills, wetlands and pending zoning changes. You rely on your realtor for local knowledge, so be sure to ask about items like this.
Is there parking at the train station?Everyone asks about commuting time, but many stations don’t have enough parking spaces. If you plan on using the station to commute or to take trains regularly, this could factor highly in your decision. If there is parking, ask if it is free or if there is a charge.
What are the SAT scores?The more nerds who live in a town, the better the real estate values. If the broker doesn’t know the scores, he or she can refer you to the Web site greatschools.net or homefair.com.
What are the monthly utility bills for the house?This is good to know before you sign a contract. An old, inefficient heating system could add thousands of dollars to your yearly expenditure. You may think you can afford the mortgage, but can you afford the bills?
What’s under the wall-to-wall carpet?Houses built before 1945 almost always have hardwood floors. Newer houses with wall-to-wall carpet most often have plywood. Look in the closets — usually builders don’t carpet inside the closets. Hardwood floors are not only nicer for you, they’ll also add to the resale value of the house.
Are sanitation services included in the taxes?Some towns will remove garbage from your backyard, some pick it up a few times a week without charge, some charge for certain items and some charge for everything. These and other little expenses like them can add a lot to your yearly expenses. Quiz your broker accordingly!
Buying a house raises many questions, and your broker is there to answer them for you. If my questions are not relevant to your situation, ask some of your own. I constantly ask questions of everyone I meet; knowledge is a very powerful thing, and when you are buying a home it could prove invaluable.
For more of Barbara Corcoran's real estate tips and advice, visit barbaracorcoran.com.