When you attend an open house and flash your preapproval letter, you’ll definitely get the attention of the seller and their Real Estate Agent. But just because you’ve shown you can afford the open house you’re viewing doesn’t mean you should pay the maximum price. Do a little research to craft a savvy bid.
Don’t let the thought of asking the following five direct questions frighten or terrorize you. Failure to obtain vital information about a home you might want to buy could turn you as white as a ghost and haunt you for years to come. Remember the devil is in the details!
Thrive by asking these five:
1. How many days has the house been on the market?
Days on market or DOM is a key piece of data. Homes that have been sitting unsold for weeks or months may indicate a serious problem or flaw the seller hasn’t indicated in the sales price. On the other hand, if the home’s listing is fairly new, the seller likely won’t be excited or motivated by less-than-full-price offers.
2. What are the home’s utility costs?
Be on the lookout for energy vampires. The home, water, pool and spa heaters, air-conditioners, washing machines, dryers, dishwashers, refrigerators, televisions, computers, and other household appliances all use energy, contributing to your utility bills. Larger houses usually require more energy to heat, cool and light than smaller ones. Ask the owner to ballpark the home’s energy costs. Specifically, ask what the heating and electricity bills are on average. Keep in mind that a larger family will likely use more energy than a smaller one, so adjust your estimate accordingly.
3. What does the sales price include?
In real estate there’s a rule known as the “law” of fixtures, basically outlining what stays with the home and what goes with the seller. The trouble is the law has a lot of shades of gray. It’s fairly obvious that items like cabinets and faucets stay because they are attached to the home, but what about items like chandeliers and window coverings? To leave no doubt about a home’s contents – what goes and what stays – spell it out in the sales contract. A classic four-burner O’Keefe & Merritt beauty in tip-top condition could be worth up to $5,000, so knowing whether it’s stays behind or goes into the moving van will affect your purchase offer.
4. How old is the roof?
Roofs have 20- to 30-year life cycles, and when they need replacing, it’s a big expense. So, learn the roof’s condition early in your information-gathering process. While sellers may not agree to replacing the roof, they may agree to give you a credit. If you don’t know the age of the roof, you’ll be in no position to negotiate.
5. Is everything permitted?
To avoid the costs and hassles of building permits and follow-up inspections, many homeowners make unpermitted improvements. Yet, when they go to sell, they often include their unpermitted sunroom or bonus room as part of the home’s square footage. Compounding this deception, unpermitted work may be substandard, violate city codes and make the home uninsurable. Again, asking “the permit” question upfront will improve your negotiating position.
Use open houses to gather information as to whether a house is worth the price the seller is asking. If the sellers or their agents aren’t open and forthright with their answers, don’t just follow along like a zombie, simply move on to the next open house!