Buying a house – whether for the first time or the tenth time – is a huge commitment. A house purchase is fun and exciting, but it’s also one of the biggest financial commitments you can make, so you want to make sure you get it right.
The house you choose doesn’t have to be perfect, your priority may be on the location (or vice versa), but you need to know its flaws. Nasty surprises after you’ve bought a home can be heartbreaking and costly.
So how can you ensure you make the right decision? Here are 14 questions you need to ask when buying a home.
Table of Contents
1. Do I know what I can realistically afford?
Let’s start with the basic question: can you afford it? The sale price is just where it begins. To that, you have to add an appraisal fee, property taxes, insurance, mortgage fees and, often, HOA fees as well. You may need a removal company to help you move in and money to fix up your chosen property – a new kitchen is a pricey item.
A great step to take before you start looking at homes is to talk to a mortgage broker or another mortgage expert and get preapproval, if that’s possible where you live. In many places, preapproval is actually expected, and not having it can be a serious hindrance.
“In Toronto’s market, buyers often focus on the listing price, but the real questions are about what’s behind the walls and beneath the surface — the age of the roof, the history of the neighborhood, and whether the home has been loved or just maintained. A great question asked before signing saves thousands after closing.”
— Vicky Tai, Toronto Realtor
2. Is the property liable to flooding or other natural disasters?
Sellers are obliged to tell potential buyers about flood risk, but every state and municipality is different, so it’s wise to look up your property on the FEMA flood map service center where you can search by address. (For your country, check out the flood maps for the area you’re looking at.)
You will likely know if the area you’re moving to is affected by earthquakes, hurricanes, forest fires or tornadoes. Make sure you are ready to buy enough insurance to rebuild should the worst happen if you live in – or are moving to – a high-risk area.
3. How long has the house been on the market?
A home that has been for sale for an extended period is both a red flag and an opportunity to get a good deal. Look at other house prices in the area and see if they asked too much when they first put it on the market. You can usually see this data on Zillow and often listings will display all the price drops and any offers that were put on a property and withdrawn.
If this is the case, but you love the house or location, it’s time to investigate. If it’s had an offer on it several times, it likely has underlying problems. Perhaps there are structural defects or they are plans to put a multi-lane freeway 60 feet from the back yard. Getting an expert in to look at the structural state of the home is the best thing to do, and then you can either walk away or make an offer appropriate for the fixes necessary.
4. Why is the seller leaving?
Ask the realtor, “why are they moving?” This is an important question as it may have a bearing on your negotiations, i.e. how keen the seller is to sell. The usual answer is simply the need to change to upsize, downsize, relocate for work, or to be closer to family.
But, you should be wary if the answer is “I don’t know.” Legally, the seller has to tell a potential buyer about most problems and an inspection should find those not known about but it would still be useful to know the reasons.
5. What is the history of insurance claims for the property?
If there have been insurance claims in the past these may point to defects that will reoccur and may affect your ability to be able to get insurance or, at least, make it more expensive.
You should ask the seller for a copy of the CLUE report – Comprehensive Loss Underwriting Exchange – which will list any insurance claims made in the last seven years. If there aren’t any, all well and good, though claims could have been made to an insurer who doesn’t subscribe to the CLUE.
Unfortunately, if there have been more owners in those seven years you’ll need a report from each, but it’s worth doing if you’re buying an older home or a home with unique features.
6. Does the home have my non-negotiables?
When you’re looking for a new home it’s easy to get swept away by homes that have got a brand new kitchen, a huge backyard, or a couple of extra bedrooms, but you need to have a list of non-negotiables you won’t buy a home without.
For you, this may be a two or three-car garage so you can work on your vehicles or other hobbies, a big yard for your kids to play, or conversely a small manageable yard so you don’t have to spend every other day out there cutting grass in the summer.
7. Has the property had any additions or major renovations?
Homes often have extra rooms added, internal walls rearranged, and other large renovations, so if they are recent changes you need to know who did the work and that it conforms to regulations and if any guarantees are still in place. Knowing this history will give you a better idea of the property’s overall condition and an understanding of the asking price.
For older additions, as there will likely be if you’re looking at a historical home, ask an expert to look at the work and check it’s still in good order.
8. How old is the roof?
It is worth finding out the age of the roof and if it has been updated in recent years. Roofs often need maintenance, depending on its construction, and can be costly to replace. Buildings in certain styles and locations are more likely to need maintenance, so consider this before you buy.
9. What is included in the sale?
You need a list of what is being left and what the seller is taking with them. Some people move in and find all the light bulbs have been removed so don’t take anything for granted! You are buying the building, but what else? Will you turn up and find the workshop out back that you fell in love with has gone? Are they leaving any major appliances? You can often negotiate some of these items into your sale if they aren’t initially, so you need to know.
10. How old are the heating system and air conditioning?
Find out about the age and condition of the water heater, the air conditioning, furnace and so on, along with the stove and any other included appliances. Are there any guarantees, have they been regularly serviced? Horror stories of moving into a new property and finding the heating system breaks down a week later is common. Don’t be caught out.
11. How much do the utilities usually cost?
You need to find out the average cost of heating, cooling, electricity and internet costs plus water, sewer, trash collection, and any fees like HOA. Buying a home is a serious financial undertaking and you need to be prepared for what your monthly outgoings will be.
Older properties are often less energy-efficient than new ones, so you may want to spend money upfront to update the systems and reduce your regular costs.
12. What are the neighbors like?
You can learn quite a lot from the nature of the response to this question, as much as the words themselves. A guarded response may point to difficulties, an effusive one might mean everything is hunky-dory. If you can, talk to the neighbors. Don’t forget if there is a problem it may be because your seller is not the perfect neighbor rather than the other way around – so don’t be afraid to simply walk around the neighborhood and talk to people.
13. What’s the neighborhood like?
Do your due diligence and looked into the stats – crime, quality of nearby schools, and so on. You can tell a lot just by using your eyes and ears. Is it nice and tidy and well cared for? Is it noisy or quiet? What’s it like in rush hour, busy, calm? Spend some time just walking around and get a feel for the place.
Look on social media platforms for neighborhood-specific groups and follow along, you’ll soon get a feel for the social dynamic. If an HOA is involved then you can check its financial health and see how the community is doing fiscally.
14. What did you most enjoy about living here?
This simple question might tell you a lot. Most people like where they live and move because they have to. However much they are looking forward to going somewhere new, a part of their heart will be in the property you are buying, and their response might well be illuminating and might help you settle into the neighborhood more quickly.
Whenever a great deal of money is involved you have to be cautious and not let your heart rule your head. Making a bad decision can be bad for your bank balance, for your state of mind and even your relationships. Take care and make the proper inquiries. Of course, if you fall in love with your future home, all the better!