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Buying a home can be an emotional decision, especially for First Time Home Buyers. Too often I find that buyers focus on the aesthetics of the property and don’t ask enough questions. Here are the Top 12 Questions every buyer should ask at an Open House.
1. Why is the seller selling the house?
You might glean some valuable information from this question such as schools, noise, high energy bills, etc. However, the seller could be moving to another city or out of state. It can be stressful for a seller to move before selling their house so they might be motivated by something other than price, such as a short escrow.
2. How long has the house been on the market?
A general rule of thumb is that the longer the property has been on the market the more likely it is that the property is overpriced. In addition, you are less likely to face multiple offers. Conversely, if the house has been on the market for less than 15 days there is a good chance you will see competition from other buyers.
3. Have there been any offers?
There are a few ways this question can help you. The selling agent will tell you if there are other offers, but they probably won’t give you the details since it’s their job to get the best offer. However, you want to read his body language and ask additional questions to see how good the offer is:
What type of financing does the buyer have?
What is the Earnest Money Deposit?
Who is the loan officer?
If the selling agent thinks that the offer is really good then he will probably act confident. If the offer is just okay then he will probably encourage you to make an offer even though they have another offer in hand.
4. How old is the roof and A/C unit?
The roof and the HVAC system are two of the biggest expenses for a homeowner. Obviously it is best if these items are new or in good condition. If not, the condition of these items can be used to negotiate the price.
5. Does the house have any issues?
The way I like to ask this question is to ask the selling agent, “If you were to buy this house what is the first thing you would have to fix?” You want to know if there are problems that you cannot readily see such as electrical wiring and insulation.
6. How much do they pay in monthly utilities?
Facts are facts. Most often a seller is honestly and truthfully unaware of problems in their own home. But facts are facts and a copy of the PG&E bill will tell you if there’s a problem.
7. Does the seller have service records for the HVAC system, pests and termites?
When a seller tells me that they do not have any service records, I get a red flag warning. Sellers will agree to buy a home warranty so that if anything breaks within a year the buyer will be covered – BUT not always. There have been occasions where a home warranty claim was denied because the HVAC system had not been serviced for years. In addition, home warranty companies are going to do the bare minimum to get the unit running so it’s not the best solution.
8. What is the seller’s timeline?
If the seller is presented with two identical offers, the length of your escrow can be the most important part of your offer. Are they building a house? Are their kids in school? Do they need to lease-back?
Real Life Example: It was March 2014. My buyer was ready to make an offer on a house and we happened to meet the sellers after a showing. The seller had young children and the wife mentioned that they were in kindergarten. Well, my kids are older but I remember that kindergarten promotion at the end of the year is a big deal. I asked if they would be moving before the end of the school year and I could tell that this bothered her. We made an offer with a 30 day escrow and up to 60 day lease back so that the seller could stay in the house through the end of the school year. Our offer was accepted the next day.
9. How does the price compare to other homes in the neighborhood?
Any listing agent with experience will have this information in writing or be able to rattle it off by memory. You are looking to see if the seller priced the house based on the value of the neighborhood OR did they price the house based on money they need to net from the sale. This might surprise you, but many times a seller will price their home based on the amount of money they want to net in the sale and the house can be $10,000 to $30,000 overpriced.
10. Have there been any insurance related repairs?
Was there a leak in the kitchen? A fire in the garage?
11. Tell me about the neighbors?
This is another body language question. 9 times out of 10, the agent won’t know anything about the neighbors and she will say, “this is a great neighborhood.” But, once in a while you will see a flinch or a hesitation and you’ll be glad you asked the question. I would also suggest that you walk around the backyard and whistle. If nothing happens, good. If 9 dogs start barking and climbing on the fence you might have a problem.
12. What is the seller looking for in an offer?
When someone sells their house there’s a reason and it’s not always price. If your offer can help satisfy the seller’s needs then you have a better shot at getting your offer accepted.
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