Buying a home is one of the largest and most impactful investments you’ll ever make.
Luckily, it’s also one of the safest investments you can make. But that doesn’t mean you shouldn’t do your due diligence. Although there are mandatory disclosure laws in place to protect home buyers from big, hidden problems, you want to do everything you can to make sure your future home is the right fit for you. Fail to ask the right questions, and you risk joining countless home buyers who end up with buyer’s remorse.
Although the right real estate agent will know what to ask, it’s important you know what to look for, too. Here’s a comprehensive list of questions you should ask before you sign on the dotted line.
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1. How long has the house been on the market?
The longer a home is on the market, the lower its chances of selling. Sellers and their agents know this, so if the home you’re looking at has been sitting on the market for weeks or months, they’re going to be very willing to negotiate on the sale price.
If a home has been on the market for longer than average for the local market, there’s a reason for that. Make sure you find out if there are problems with the home before you submit an offer.
On the other hand, if the home has just hit the market, you might be able to grab it with a fast, respectable offer. A lot of sellers just want to get the sale over with. And if there ends up being a lot of competition for the home, you can always improve your offer.
2. Have there been any price reductions?
A lot of price reductions, especially drastic ones, are an indication that the seller is very motivated to sell. Along with how long the property’s been on the market, this is also a strong indicator of how much interest there is in the property.
If the seller has cut the price multiple times, it’s likely you’ll have a lot of leverage at the negotiating table — and they may be desperate to sell. However, if there haven’t been any price reductions, they may be very firm on their asking price.
3. What was the previous sale price?
The previous sale price isn’t always revealing, especially if the seller has owned the property for a long time. But comparing a home’s past appreciation to the larger market (and the seller’s asking price) can give you a good idea of whether the property is properly valued and what kind of appreciation you might expect in the future.
4. Are there multiple offers on the table?
If there are multiple offers on the house, that means your offer will have to be very strong to come out on top. If there’s strong competition, an offer that’s just okay will often be dismissed immediately.
That said, don’t get caught up in the heat of the competition and dramatically overpay just because you want to win.
5. Have there been other offers?
If there have been no other offers on the property, that gives you a lot of leverage. The buyer is likely very motivated and would be open to offers that are below the asking price. How far below is a question you’ll have to take up with your real estate agent and will depend on the local market conditions and the property itself.
6. How much have comparable homes sold for in the neighborhood?
Valuing a home is more of an art than a science, and a big part of coming up with a number is looking at similar sales in the area. Looking at the record of recent sales is a huge part of how your lender will appraise the property’s value and is probably how the seller set the asking price.
Your agent can provide a list of similar, recently sold properties to give you an idea of how to approach negotiations.
7. How hot or cold is the local market?
In a very hot market such as San Francisco or Washington, D.C., competition is high even for less-desirable properties. On the other hand, in a cold market, even desirable properties can sit on the market for a while before finding a buyer.
As a rule, sellers have more leverage in a hot market, and buyers have more leverage in a colder market.
Understanding your local market dynamics can make you a much more effective negotiator — and maybe even save you thousands of dollars.
8. What is the ratio of the asking price to the market value?
The ratio of the asking price to the market value is going to tell you how aggressively the property is priced and what kind of market the seller expects.
If the asking price is far above the market value, the seller likely believes there will be multiple bids and that the home is going to appreciate rapidly in the future. It’s up to you and your real estate agent to figure out if the asking price offers reasonable value, or if it’s overpriced.
If the asking price is below market value, then the seller is likely desperate to sell their home. This could mean they simply want to get the sale over with or that there are flaws in the home. Make sure you figure out why the home is underpriced!
9. Why is the seller selling their home?
Most sellers are leaving for personal reasons, but some may be selling because of factors that could affect you. If there are noise issues, escalating property taxes, or a troublesome homeowners association, you should know about it before you move in.
The seller’s reason for leaving could also give you negotiating leverage. For example, if they’re starting a new job across the country on the first of the month, they’ll probably be very motivated to get the sale done.
10. Have there been any major renovations or additions — and were they properly permitted?
If there was major work done on the home, you’ll want to make sure it was properly done and permitted. Unpermitted work that doesn’t meet local codes can get you in hot water with the local authorities, and you may even be forced to tear out the unpermitted work. Your homeowners insurance policy may not cover unpermitted areas of the home, either.
If you do find out that there was unpermitted work done on your future home, you can ask the seller to fix it before the sale, purchase as is (with a price adjustment) or walk away.
11. What exactly comes with the house in the sale?
As a rule, fixtures such as faucets, showerheads, and cabinets are included in a home purchase. But the seller may have other ideas. Make sure you spell out exactly what is and isn’t included in the sale — and don’t be afraid to ask the seller to throw in an appliance or two or even things like furniture pieces or artwork. Motivated sellers may even throw in a washer/dryer to close a deal.
12. Is the home located in a flood zone or in an area prone to earthquakes?
A standard homeowners insurance policy does NOT cover earthquakes or floods, so you may need to purchase separate coverage if you live in a flood- or earthquake-prone area.
Homeowners can buy flood insurance through the National Flood Insurance Program (NFIP), and it’s legally required if your home is located in a federally designated high-risk flood zone. Earthquake coverage can often be added to a standard homeowners policy or bought as a separate policy.
13. What condition is the roof in, and how old is it?
The roof is probably the most expensive part of a house to replace, and once it starts to leak, it can quickly lead to massive damage.
A typical modern roof has a lifespan of 15 to 50 years, depending on the type; an older roof will likely require a moderate amount of regular maintenance. If your inspection determines there are problems with the roof, even small ones, your lender might require repairs before closing. Whether the buyer or seller pays for that is negotiable.
14. What is the age and condition of the major systems and appliances?
You should ask about the plumbing, HVAC and electrical systems — when they were installed, and if there have been any problems. If they’re at or near the end of their lifespan, make sure you’re including the cost of their replacement in your calculations.
If the appliances are included in your purchase, find out how old they are, if they’re still under warranty, and if they’re easily repairable if they break down.
15. What health or safety hazards are present in the house?
Although hazards such as lead paint usually fall into the “mandatory disclosure” category, there are other hazards that sellers may not have to tell you about — but will disclose if asked. This could include things such as mold, radon gas, or air quality. If any of these are present, ask for documentation, and get an estimate for remediation services.
16. What is the home’s history of homeowners insurance claims?
Ask the seller about past insurance claims, but also ask for a copy of the Comprehensive Loss Underwriting Exchange (CLUE) report (it’s free, but only the present owner can request it). This document lists any homeowners insurance claims that have been filed in the past seven years in connection with the property.
17. Are there any general problems with the house that don’t fall into the previous categories?
There are a lot of potential problems that may not fall into the mandatory disclosures.
As with the previous question, trust but verify — ask the homeowner but also have a professional home inspection done. If flaws are discovered by the inspection, you could negotiate financial concessions or pre-sale repairs. And if your purchase agreement includes a home inspection contingency, you can walk away from the sale without losing any money.
18. Is the seller willing to pay for a home warranty?
A home warranty covers anything that breaks or malfunction after the sale goes through. The seller typically pays for the home warranty, as it protects them from hassles and potential liability, but in a strong seller’s market, the buyer may have to pay for it.
19. What is your budget?
Before you even start looking, you should know exactly what you can afford. This doesn’t just mean the sale price of your future home; you should include costs such as insurance, taxes, and future renovations or repairs.
Understanding your budget — and showing up with documentation in the form of a mortgage preapproval — also means agents and sellers will see you as a serious, realistic buyer.
20. How would you describe the neighbors?
Your future satisfaction will depend on your community as much as your home. Make sure your neighbors are a good match for you in terms of sociability, schedule, noise, and child- or pet-friendliness. You can determine this by asking the seller or by walking around the neighborhood yourself to take in its vibe.
21. What is the character of the neighborhood?
This question can cover everything from traffic and crime to how residential or commercial it is and whether it’s an established neighborhood or one that’s rapidly evolving.
22. Where are the nearest schools, and what are they rated?
This is a very important question for parents or soon-to-be parents. Even if there are schools nearby, they may not be as highly rated as you require, so you should be careful to find out where the nearest acceptable schools are.
23. Are there any nearby nuisances or quality-of-life issues?
Many things could fall into this category: frequent foot traffic, noise from nearby freeways or overhead flights, odors from power plants or factories, even a neighbor with noisy dogs or who throws late-night parties every weekend.
24. Is there a homeowners association (HOA)? If so, what are its requirements?
If your future home is in an area with a homeowners association, there may be rules limiting what kinds of changes you can make to the exterior or even to the home’s landscaping. Most HOAs also require dues. Getting this information up front can save you frustration down the line.
25. Where are the nearest vital services and amenities?
You’ll want to know where the nearest hospital is as well as things such as restaurants, shopping, green space, and access to mass transit.
26. How long is the commute to the nearest city?
If you’re buying in the suburbs, you’ll want to know how long it takes to reach the nearest city, especially if a member of your household is going to commute. Make sure you get commute info for all transportation options — driving and mass transit.
27. Is this a foreclosure or a short sale?
Getting financing can be complicated if you’re buying a foreclosure, at least for a limited period of time. If you’re planning on buying a short sale (when the seller owes more than the sale price), they’ll have to pay out at closing, which means they’re unlikely to concede anything on closing costs, pre-sale repairs, etc.
28. How much will my closing costs be?
If you’re a first-time home buyer, keep in mind that the sale price isn’t the extent of your financial obligations. You’ll also be on the hook for at least some of the closing costs, which average around 2-5% of the sale price.
Closing costs are negotiable, but how much of them you’ll be able to get the seller to cover will depend on how much leverage you have, i.e. if it’s a buyer’s or seller’s market. Who handles your sale also has a huge impact on the fees and commissions you’ll have to pay.
Your lender is required to provide you a closing disclosure form three business days before closing; this form will tell you exactly how much you’ll have to pay in closing costs.
29. Is there adequate insulation in the walls and ceiling?
If you’re buying in an area with cold winters, you’ll want a well-insulated home, not only for your comfort but to keep your utility bills reasonable.
30. What kind of foundation does this house have?
Slab foundations are more common in contemporary construction but can crack, and it can be very difficult to access embedded plumbing or electrical systems if they need repair. Raised foundations allow easier access to these systems, but also provide space for mold or pests. The best foundation for your area will depend a lot on the weather conditions and how much moisture is present in the ground beneath your home.
31. Are there any foundation or structural problems with the home?
This is more a question for your home inspector. Foundation or structural issues are fundamental problems that can be extremely expensive — or impossible — to remedy.
32. Would a higher down payment qualify me for a lower interest rate?
It can be tough to come up with even more cash for a down payment, but lowering your interest rate can save you tens of thousands of dollars in the long run. Talk to your lender about this, and make sure you crunch the numbers.
33. Can I buy points upfront to lower my interest rate?
Typically, each “point” you buy will lower the interest rate on your mortgage by one-quarter of one percent. This can significantly lower your monthly payment but, once you figure out your breakeven point for that upfront cost, usually only makes sense if you plan on staying in your home for several years. Talk to your lender about whether you can buy points, and if it makes sense for you!
34. How much will my monthly mortgage payment, and all associated costs, be?
It’s relatively simple to find out how much you’ll have to pay on your mortgage each month, but many first-time homebuyers don’t include costs like property taxes and homeowners insurance premiums, which can add hundreds of dollars onto your monthly obligations.
Millennial Home Buyer Report (2022 Data): We surveyed 1,000 home buyers to learn about their plans, dreams, and anxieties — including the risks they’re willing to take in order to purchase a home.