The more information you can get about your home and the homebuying process overall, the more prepared you will be to become a new homeowner. Your homebuying team—realtors, mortgage representatives, inspector, attorney and others—should be able to help track down answers to these important home buying questions.
What to ask your realtor when buying a home
1. What is the history of this home?
To find out about the home’s past, you can ask things like when was it built, how many owners have lived here, have there been any disputes to the property, when was it last sold, and for how much? Each of these questions can help you gain a better understanding of the history, value, and any concerns that might need to be addressed.
2. When were the last updates?
It is important to know when major items like the roof, furnace, driveway and windows were last updated. These items can be considered “big ticket” expenses that may need to be budgeted for if they are relatively old or starting to deteriorate. They can also be points of negotiation between your realtor and the seller’s. If you are expecting to replace these types of items in the near future, keep in mind that your mortgage team can help you to prepare for post-purchase expenses that could be built into your mortgage. If your lender offers a no closing cost option or mortgage + home equity combination loan, you may be able to save money and/or plan for repairs sooner.
3. What have the average water and electricity bills been for the past two years?
Knowing monthly costs is helpful for budgeting your income and expenses in addition to monthly mortgage costs. While financial institutions offer escrow options for taxes and insurance payments, you’ll need to plan for separate payments for water and electricity. Every homeowner is different in the resources they use, but knowing the average expenses will help to ballpark what you’ll need. Consider asking about other resources like trash removal options and internet providers in the area as well.
4. What are my mortgage options?
Do some research to find out about the variety of mortgage options with different types of financial institutions. Each option has benefits and potential drawbacks to consider based on your personal financial situation and goals. Here’s a place to check out a quick rundown of mortgage options and other important terms you need to know as you purchase your first home
5. How much money do I need at closing?
This will vary based on the type of mortgage, down payment, and other fees and services associated with the sale of the home. Your mortgage team will map out the exact amount that you need to bring to closing. Some financial institutions offer no closing costs mortgage options, where for a slight difference in the mortgage interest rate, the lender will pay closing costs including things like the appraisal, title insurance, mortgage tax and other fees.
6. When are the local town/county and school taxes due?
If you opt for an escrow account, the taxes will be collected over a 12-month period as a part of your monthly mortgage costs, and your mortgage servicer will pay the taxes out of the escrow account. One benefit to a locally serviced mortgage is that the local financial institution will already know when the taxes are due and have all of the payment information in its system. If you do not have an escrow account, you’ll be responsible for paying these taxes directly to the municipality and school district, and will need to plan and budget accordingly.
7. Does this home need any special insurance?
There are countless ways to insure a home from basic policies to special coverage depending on things like mortgage lender requirements, location, climate/weather concerns, usage, prior damage, animal ownership and more. Members of your homebuying team can make recommendations on types of insurance and reputable providers with whom to explore options.
You may have many more questions as you move through the homebuying process, and that’s okay! Do your research, and ask as many questions that you need to feel comfortable with this major decision and milestone purchase. Always feel free to reach out to any member of your homebuying team to ask for help or to find out more information.