Buying a home can be one of the most exciting--and stressful--times in your life. After all, this is probably the largest purchase you'll ever make. It's not surprising, then, that first-time homebuyers typically have a lot of questions, from how to make an offer to what to expect at closing.
If you are represented by a real estate agent, then you have a wealth of information at your disposal and a knowledgeable professional who will step you through the entire home-buying process. But once you have found the home of your dreams, you might be tempted to use your newfound wisdom to make an offer and close the deal as quickly as you can.
However, there are some very important reasons you may want to pump the brakes a bit, even in a seller's market. While first-time homebuyers may know the right questions to ask about the basics of the home-buying process, many may miss the opportunity to ask other very important questions before making an offer.
Here are five questions to ask your real estate agent before making your first home purchase:
How can I be sure I don't overpay? Once you've found thehouse, it is natural to want to do all you can to ensure your contract is the one the seller goes with. This is particularly true in a hot market where buyers are encouraged to offer full list price--or more--due to competition. A strong offer is important, but overpaying is problematic. Not only are you spending too much in comparison to your home's value, but you could run into difficulty getting to the closing table if the house doesn't appraise for as much as you've offered. Your real estate agent should be able to provide you with data on comparable sold and pending properties, helping you to determine a strong price that doesn't have you overpaying.
Which contingencies and concessions do you think are important and which aren't? While this is something you need to answer for yourself, it's a good idea to get your real estate agent's opinion. Your agent can give an informed opinion about what would be appropriate to request and what might get your offer rejected. Also, if you are asking for concessions, be sure these are spelled out clearly at the start, as part of your offer.
Under what conditions could I get my earnest money back? No one wants to think about a deal going south when they are planning to make an offer on a home that seems perfect for them. But, the fact of the matter is, not every deal closes. Sometimes a home inspection uncovers hidden, costly defects. Or, an appraisal comes back lower than expected. It's important you understand under what circumstances you can get your earnest money back if you have to walk away from the deal. Your agent can also guide you in ensuring these conditions are spelled out in your offer as needed.
Is there anything going on in the area that will affect future home value? Your agent should be your neighborhood expert. While there are some things your agent should not comment on due to fair housing laws, that does not stop him or her from letting you know if there is a planned development for current green space, for example.
If you were in my position, would you buy this house? This might sound like a question you'd save for a family member or close friend, but asking this of your real estate agent will probably be a lot more informative. If you sense any hesitation, ask why. Your agent may have insight on some issues you were willing to gloss over or missed entirely.
Lori Weaver is a writer and licensed real estate agent in Lexington, Ky. With over 25 years’ experience in communications and marketing across a number of business sectors, she provides content marketing, writing and social media services to a variety of B2B and B2C clients, with a focus on real estate., real estate investments and new construction. In her spare time, Lori enjoys traveling and spending time with her family.