If you’re in the market for a new home, there are several important questions you should ask before making an offer. In this two-part blog, we’ll share insights from a few of our agents and managers on key items to consider when buying a home, including several questions you may not otherwise think of.
What is the average cost of monthly utilities? According to Katherine Davis, manager of Annapolis Fine Homes, a Long & Foster | Christie’s office in Annapolis, Maryland, it is helpful to know the average cost of monthly utilities on the home you are considering purchasing. Make sure to calculate these expenses into your monthly budget.
How much money do I need to buy a home and when do I need it? “Initial deposits are required at the time of contract offer, an inspection fee is due at the time of service, an appraisal fee is collected by the lender at the time the buyer applies for a loan and closing costs are due at settlement,” said Davis. Knowing these amounts and due dates will help ensure a smooth process from contract to close.
Is the property a part of a community with a condominium association or a homeowners association (HOA)? If you purchase a property in a development with an HOA or condo association, you are required to join the association and pay its monthly or annual fees, explained Athena Petersen, a manager of Long & Foster’s Reston, Virginia, office. Before you buy, make sure to find out what the fees cover and when the payments are due, Davis recommends.
How much earnest money should I put down? Todd Delahanty, an agent in Long & Foster’s Arlington, Virginia, office, advised that the more earnest money you put down, the better, but 1-3 percent of the purchase price is common. Selina Delahanty, also an agent in Long & Foster’s Arlington office, further explained that earnest money, unlike a security deposit, is credited at closing, so you’ll still benefit from putting down that amount.
How much do I want this home? Todd and Selina Delahanty have all their potential buyers ask themselves this question before making an offer on a home: “Do you want the home or do you have to have it?” This is essential information for your agent to know in order to best recommend a competitive offer price and negotiation strategy.
Beyond price, what offer terms will the seller most favor? It is a seller’s market across the Mid-Atlantic, forcing buyers to compete against multiple offers. “To make your offer stand out in a competitive market, it is important to better understand what the seller wants – not necessarily in regards to price, but frequently about terms,” explained Todd Delahanty. For example, the seller might want to rent back the property from you or desire a specific closing date.
Next week, we’ll share more suggested questions to ask before making an offer on a home.