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Per "Found The One? 10 Things To Do Before Making an Offer on a House"

Found The One? 10 Things To Do Before Making an Offer on a House

 By Julie Ryan Evans

Oct 13, 2021

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.

“Before making an offer on a home, you need to do your research so you know what kind of situation you may be dealing with,” says Cara Ameer, an agent with Coldwell Banker in Florida and California.

“There are a myriad of factors that can affect the initial offer as well as the outcome of the entire negotiation. Failure to do your research is like playing a game of poker blindfolded,” adds Ameer.

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 history of the property. 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 history as far as the pricing goes to see if any reductions were made 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.

“They will likely uncover information you otherwise would not be able to find out,” Ameer says. “For example, what is the seller’s reason for 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 family situation?”

She says the listing agent can help your agent understand the situation and explain what has happened with the listing process thus far—such as if a property went under contract and came back on and why that happened.

2. Fish around about finances

Make sure you know who owns the current property, when it was 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 where the property is located. 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.

“For example, if the seller is touting a heated/cooled addition to the home but you don’t see any permits, you must dig further,” Ameer says. “They could be basing their asking price on square footage that would not be counted by an appraiser because the addition was not permitted. “

4. Measure the market

Beyond the property you’re considering purchasing, you also want to do research on the state of the market for the neighborhood and area in which it’s located. That means looking 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 in relation to others on the market. Is it the most or least expensive property, or does it fall somewhere in between?

“Usually somewhere in between is good as you want to hopefully leave room for future appreciation,” Ameer says.


.5. Investigate the housing inventory

The current inventory in an area can also be helpful when deciding what type of offer to make.

“Numerous 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,” Ameer says. “If there are a lot of homes for sale, why? 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 as well as 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 a number of 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 that has homeowners association (HOA) dues or other fees, make sure you understand what those are and how often you will be assessed. You also want to make sure you understand what you’re getting for those fees, if any special assessments are planned, and if there are any other fees that will be charged to you 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 there are any factors that 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 utilities and upkeep 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 keep them maintained and in good working order? Is the home a fixer-upper, or can you just 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 review of one being completed by the seller within a specified period of time. This 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 in to 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 looking at things like crime in the area, evaluating the local schools (even if you don’t have children, they can have a big impact on your future selling price), reviewing any homeowners association rules, and checking commute times to work and other places you go frequently. No one can give you a crystal-ball view, but with a little research you can get a good idea of what your day-to-day life may look like.


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