Ask Brian is a weekly column by Real Estate Expert Brian Kline. If you have questions on real estate investing, DIY, home buying/selling, or other housing inquiries please email your questions to [email protected].
Question. Heidi from Savannah, GA asks: Hello Brian, I’m looking to buy my first home. I’ve done the financial part about being pre-approved and understanding the closing process. I also think I understand the basics about having a priority list of what I want, getting to know the neighborhood, and other potential first time buyer pitfalls. What I want to learn more about are some of the subtler concerns that can make or break a good first time home purchase decision. What do you think I should be considering?
Answer. Hi Heidi. It sounds like you are doing thorough research before making a big commitment. Good for you Heidi. Buying your first (or any) home is a process with plenty of nuances. The more questions you ask and the better you understand each step of the process, the happier you’ll be with the result now and for many years to come in your home.
You didn’t mention if you have a buyer’s agent. Something I strongly recommend is that you have a buyer’s agent rather than having the listing agent represent you. I’m still surprised when I hear about buyers who think a separate buyer’s agent is going to cost them money on top of the down payment and closing costs. In almost every situation, the seller has already negotiated and agreed to pay the fee for both the buyer and seller agents. Still, a buyer’s agent has a fiduciary and ethical responsibility to you. Be sure you take advantage of the independent representation. I generally recommend finding an agent who specializes in both the neighborhood you are interested in as well any possible ownership nuances that go along with the neighborhood.
For instance, homeowner associations (HOA) and condominiums can come with some specific rules and regulations. Most have general rules common to most homeowner associations but some can get very specific. Not only do you want to read those rules before making an offer but also get an understanding of any peculiarities that apply that an agent might be aware of. For instance, I know of a situation when a person bought a home located on government-owned land that was leased to the owner for 100 years. One of the agents wasn’t aware that the lessor had to approve the purchase (government agency in this case). The deal did close but the mistake caused a month-long delay after the title paperwork was submitted to the county without all of the required signatures.
Once you begin looking at houses, you want to be sure you collect important information while you are actually doing the viewing (while at the house). Questions about exactly what you are going to receive from the purchase are particularly important. Most states have standards about any fixtures and appliances that are included. You want to understand these standards and make sure the sale won’t have any exceptions. Make sure the seller isn’t planning to replace the expensive chandelier in the dining area with an “adequate” substitute. Same thing with appliances. If there is any question about what is and is not included, you can have your expectations clearly written into your purchase offer. This is about exactly what you are taking ownership of. The property boundaries should also be clearly understood as well as things like landscaping that you consider permanent but the seller might consider removable. This might seem a bit picky but I know of people who have ended up arguing about a stack of firewood that was removed from the backyard.
Some questions that come up after you leave the property aren’t always a big deal. If you suddenly realize you don’t know how old the roof is, it might not be a big deal to learn it is only two years old. The roof will also be inspected during the home inspection. Or maybe you later learn the house is on a flood plain. You might be comfortable with what you learn later or you might want to go back and look it over again.
Then comes writing up your purchase offer. Most likely, it will be a standard purchase contract where you fill in the blanks for legal property description, price offer, legal names, etc. However, there very well could be contingencies, clauses, and later addendums. Make sure you fully understand all of these because these are the exceptions to the standard contract. Also, be sure you understand any conditions where you can or cannot get your earnest money back. You also want to have a clear understanding of who will be paying what for closing costs. If you have any questions, have them all answered before you sign your name.
One last word before you sign the offer. Now that you have all of the details about what will go into the purchase offer, it can be a good idea going over your budget one more time to be sure that what you are offering and will be receiving is agreeable with what you can afford.
Heidi, don’t take any of this as legal or professional advice. These are only suggestions for possible nuances to look out for. None of this can substitute for receiving knowledgeable advice from professionals familiar with your specific situation.
As a reader, what nuances or experiences do you have that buyers will learn from? Please leave your comment. Our weekly Ask Brian column welcomes questions from readers of all experience levels with residential real estate. Please email your questions or inquiries to [email protected].