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Ed Kunkel Home Buying

Nine questions that every buyer should be asking before buying a home

21 Feb 2019 0

As a home buyer, you should be asking a lot of important questions in this evolving market before making a decision on who to hire and what or where to purchase.  It’s a huge decision for a new buyer to purchase a home, coupled with little knowledge to start with about the process. Considering that every market is different, as every type of sale is different, these nine basic questions are a great start to finding clarity of purpose, while taking the time to make educated choices and decisions.

Do I really need a Realtor®?

The short answer is yes.  You are making one of the biggest decisions of your life, and it’s very likely that this is your first time buying a home.  Does it not make sense to hire a professional to help you do it if you truly don’t know what you’re doing?  When you begin your journey of finding the right home, you are likely going to hear lots of advice from well-meaning family members or friends that simply do not know what the market is doing and what to expect.  A Realtor® assists clients daily in their pursuit to buy and sell Real Estate – they know what to expect in the current market conditions now, and what to prepare for in the future.

What does it cost me to hire a Buyers Realtor®?  

The short answer is, usually nothing – but it depends upon the practice of the professional.  In my practice, I interview potential buyers and determine if we are a good fit to work together in helping the client find a home.  If we can agree to make a commitment with each other, we both sign a Buyer Agency Agreement.  Commonly, my compensation for services is paid for by the home seller in the form of a Selling Office Commission.  Homes for sale that are listed with a professional on the local MLS will have a Selling Office Commission being offered for the sale.  In the case of helping a buyer purchase a home that is For Sale by Owner, the buyers may end up paying for my services at close of escrow.  I explain how this works in detail during my buyer interviews.

Can you provide references for me? 

A quality Realtor® that has mastered their skill set is what you want, so ask for references.  What should you do with said references?  Call them, email them, ask them how the experience was.  Keep the conversation brief and cordial, don’t interrogate them.

Can I make offers on homes that are lower than their asking price? 

Yes!  It’s an open market, and everything is negotiable in Real Estate.  Every market is different, and it’s worth the time to spend with your Realtor® to define home values in your markets so you know what to prepare for when you are ready to make that offer.  Anyone can make a low offer just to see if it sticks – and it usually doesn’t. But a smart consumer that knows what they want, and how to go about negotiating the purchase will be more likely to achieve success.

How flexible should a seller be on price and terms? 

This depends on the seller’s perception and motivation to sell.  It also depends on how effective the communication is between the seller and their Realtor®.  Not all Realtors® are equal – some Realtors® are effective leaders that educate their clients, while earning their trust to navigate through their market.  Other Realtors® only enable sellers to make choices about selling their home that have no bearing or influence on what is happening in the current market.  The most common mistake Realtors® make is to allow sellers to overprice their home.

What should I know about short sales? 

The term ‘short sale’ can be misleading to consumers that don’t understand them.   When a home owner needs to sell their home, and the home does not hold enough fair market value to cover the mortgage amount owed and the cost of closing escrow, the owner can attempt to sell the home ‘short’.  It’s situations like this that are a strong reason to have a professional guiding you through the process if you choose to pursue a short sale.  You should know how many liens are on the subject property, who is negotiating with the owner’s lien holder (Is the seller’s Realtor® doing this?  Is the Realtor® experienced with negotiating short sales?), how are repairs going to be handled if the appraiser for your loan adds conditions to the sale, and many other questions to be concerned with.

What should I know about foreclosure homes? 

If you want to go to the public auction and never have before, I recommend that you pay attention to the auctions being advertised in the local newspaper and show up to witness how auctions work.  If you have access to immediate cash to invest in purchasing a foreclosure, this may be a good venture for you.  Otherwise, you can look for ‘REO’ (Bank Owned) homes available on the open market through your local MLS.  To purchase an ‘REO’, it may require special addendums or a bidding process online through your professional.  There are lots of things to consider about purchasing an ‘REO’ that are similar in nature to a ‘short sale’.  Both homes are or were ‘distressed’, which means abandonment, neglect, the possibility of excessive repairs, and a host of other issues.

How do I know if there’s something wrong with a house I like? 

Before committing to a purchase, do a visual inspection of the home, inside and out.  Look under the eaves, the siding, the foundation, and the roof.  Do you see something out of place, cracked, or damaged?  Does the roof material look clean and defined, or does it appear worn with corners curling?  Looking inside the home, how do the walls and ceiling look?  Do you see any excessive patches, or different texture patterns in the drywall?  Is there any discolored drywall around the ceiling?  Look at the cabinet doors and drawers in the kitchen and bathrooms, do they look straight and neat?  Do the floors appear to be level?  Are there any strange creaks or sounds when you walk through the home?  Usually a 5-10 minute ‘poke around’ will help you in your decision to make an offer and commit to paying for a professional inspection.

What out of pocket costs should I anticipate up front for buying a home? 

Aside from how you plan on paying for a home (Cash, loan with down payment, etc.), you will need money for an inspection, an appraisal, additional inspections for specific purposes (lead based paint, further inspections recommended by you inspector, etc.) and anything else that you may have agreed upon with the home seller.  You will also need to put earnest money down, which can average in the amount of 1% of the purchase price.  The earnest money can be credited towards your down payment or costs when you close escrow, or you may get the money back if you’re using a zero down loan like VA.

Please use the ‘Contact Me’ link below if you have more questions about home buying, or if you are ready to get started, I’m eager to help you find success! 

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