10 Things You Must Do Before Submitting Your Home OfferReturn to Blog
The house-hunting process is full of anticipation and excitement, and once you think you’ve found “The One,” it’s tempting to rush to make an offer and seal the deal before someone else scoops it up. But wait! There are some things you want to consider before making an offer on a home that could save you a whole lot of time, money, and potential headaches down the road.
Just like the Realtor, you need to do your due diligence and research; so you understand the entire situation at hand. Many factors may affect the initial offer along with the outcome of the entire negotiation. Failure to do your research is like playing a game of poker blindfolded. Here are some things to consider before making an offer to ensure that you get the best deal possible and that you’re not getting in over your head.
1. Hunt down the home’s history:
You (and your real estate agent) should do a bit of sleuthing to find out the property history. You want to know how long the property has been on the market, if it’s truly a “new” listing, or if it was previously on the market within recent years. Have your agent look at the price history to see if any reductions occurred and if the property was ever under contract and came back on the market.
Beyond that, it’s always a good idea to have your real estate agent contact the listing agent before submitting an offer to discover matters like why is the current owner selling? Is the seller moving due to a job, downsizing, upsizing, moving out of the area electively? Is it a divorce, death, or change in a family situation? The listing agent can help your agent understand the entire situation and explain what has happened with the listing process thus far.
2. Fish around about finances:
A few questions you should ask are: who owns the current property? When was it last purchased? And if there’s a mortgage or any additional loans taken out on the property? To do so, you and your agent can check tax records, the property appraiser’s records, or court records if accessible in the county of the property’s location. The seller’s flexibility may be affected by the amount owed on the property.
3. Probe permits:
If you can access building department data, it’s worth a look to see if there has been anything done to the property over the years whereby a permit was pulled or not pulled.
4. Measure the market:
It’s time to channel your inner-realtor once again. You’ll want to take time to research the state of the market for the neighborhood and the area of your potential home. You’ll want to look at all the active, under contract, and, especially, sold properties from the past year or so to compare prices. Look at where the list price of the home you’re considering falls with others on the market. Is it the most or least expensive property, or does it fall somewhere in between both?
5. Investigate the housing inventory:
The current inventory in an area can also be helpful when deciding what type of offer to make. Plenty of homes for sale would indicate more of a buyer’s market in that particular area. For example, where sellers may be more willing to negotiate. Are people wanting to leave for any particular reason? What percentage of the asking price are homes selling for? What are the average days on the market? Answers to these questions can help you craft your best offer.
6. Take a look at taxes:
Beyond your mortgage payment, there are also taxes to pay on your property. While they vary by area, they can be pretty steep, and you must factor them in when deciding if you can afford a property. To start, review the current taxes in addition to the estimate of the property taxes based on the new sales price to ensure you are financially comfortable with those costs. Also, know that your property taxes can change each year based on several factors, so make sure your budget has a bit of cushion in case they increase.
7. Find out about fees:
If you’re buying in a community run by a homeowners association (HOA), you may be subject to paying dues or other fees. Make sure you understand what those are and how often they will need to get paid. You also want to make sure you figure out what you’re getting for those fees. Confirm with the HOA if there are any special assessments planned — and ask if you will get charged any other fees at closing.
8. Inquire about home insurance:
Beyond your mortgage and taxes, there’s also the cost of home insurance to consider. Get an idea of how much the seller is currently paying for insurance and obtain quotes for a new policy if you purchase the home. Investigate whether any factors could affect the insurability of the home, such as the age of the roof or other systems. Will anything along these lines need to be replaced to lower the insurance premium in the future?
9. Understand the cost of utilities and upkeep:
Don’t forget to consider the cost of upkeep and utilities of a property. If you have a football field–size yard, can you maintain it yourself? Or will you need to hire help? If the home has a pool or other outdoor living features, how much will it cost to maintain them and in good working order? Is the property a fixer-upper, or can you move in and enjoy it?
Ask to review a seller’s disclosure before making an offer. If the seller has not completed one, you can make your offer contingent on a review of one finalized by the seller within a specified timeframe. That will give you an idea of the age of major systems such as the roof, electrical, plumbing, HVAC, etc., which can be pricey to replace.
10. Dig into day-to-day life:
Beyond the finances, you also want to get a good idea of what your life will be like living in a particular home. That means a variety of things. Looking at matters like crime in the area, evaluating the local schools (even if you don’t have children, they can impact your future selling price). Review any homeowners association rules and check commute times to work and other places you go frequently. No one can give you a crystal-ball view, but with a bit of research, you can get a good idea of what your day-to-day life may look like when you move in.
Are you looking to receive some assistance from one of Homesnap’s top 25% Realtors of 2021? Help from Advent Properties’ Darryl Glass is one phone call away! Contact Darryl Glass today at (510) 500-7531 for assistance navigating through any step of your property purchasing process. You can also click here to schedule a call with Darryl in the upcoming weeks at your convenience.