10 Things to Know About the Offer Process
November 30, 2022 | Posted by: Brad Vokins - Port Perry - Durham Region Mortgage Broker
10 Things to Know About the Offer Process
Before making an offer on your dream house, here are the ten things you need to know about buying real estate to ensure your offer is solid.
Buying real estate is always an invigorating process, but with the housing shortage and a decline in people selling real estate, it is even more fast-paced. Oftentimes potential homeowners get rushed and put an offer without putting much thought into it. While you may need to rush to get an offer in before someone else steals your dream home, there are a few things you need to know to prevent headaches and losing money down the line. Here are the top ten things you need to know before buying real estate.
Find Out the Home's History
Before making an offer, get a good grasp on its real history. Is the current owner really its owner, or just someone who buys real estate, flips it, and then sells it again. In this case, the insight they are offering you into the property may not be sound.
What is the Seller's Financial Situation
A seller who has paid off their home will likely allow for more wiggle room than someone who has a second mortgage on the home they are selling. Fish around in the tax records, check court records, or view the property appraiser's records to get a better idea of the current homeowner's situation.
Has the Property Been Renovated?
A great way to see if anything has been done to the property lately is by looking up county or city permits. For some additions or renovations, such as the addition of a deck or garage, a building permit needs to be obtained. If the permit was not obtained, they actually need to reduce their square footage which can reduce the asking price.
Check Out Current Home Listings in the Area
Given the drought on people selling real estate, you might not have many current listings to check out, but there are probably sales that have been completed recently. See what people buying real estate within the same neighborhood have been willing to pay and then use that as a negotiating point.
Check Out the Market
While you are doing this, consider where the house you are looking at buying falls on the real estate spectrum. Is it more expensive, less expensive, or somewhere in the middle? Your goal should be to hit somewhere in the middle because it is important to remember that sometimes paying less might indicate a larger issue as well.
Are There a Lot of People Selling Real Estate?
If there are a lot of people selling real estate than you have a buyer's market which can work in your favor, but if there are not, then you may have to be willing to pay a bit more to get your hands on a home in your targeted neighborhood.
Inquire About HOA Fees?
If you are considering buying a home without a subdivision or a planned community, then you may have to pay homeowners association fees. Make sure you understand what these are in advance so that you don't get hit by any surprise extra fees.
How Much Are Taxes?
Your mortgage is not the only cost associated with your property - you will also have to pay property taxes. These can vary based on where you are buying and can be surprisingly expensive so don't get caught off-guard.
Ask About Upkeep and Utilities
Outside of taxes, you will also be responsible for paying for your home's upkeep and utilities. The larger a home, the more energy costs will be associated with it. Consider also if the landscaping will require a professional to keep it up to par; all of these things add to your monthly budget.
What are Home Insurance Costs?
While things like claims can increase the costs of home insurance, you can generally expect to pay the same as the previous owner. Therefore, ask what they are paying for a better idea of what you will pay. Alternatively, you can search around for your own quotes before committing to an offer.
Think About Daily Life
Now that you have all of the details in order, think about how living in your home would actually be. Check out the schools, local crime stats, and commute rates. All of these things will factor into how well the home works for you in the future.