Shopping for a new home is an exhilarating yet stressful process, and it can be easy for buyers to become emotionally attached to a property without carefully considering all the factors that will impact their investment. A home’s flaws may not be immediately obvious, but taking the time to do your due diligence before entering negotiations could save you unnecessary expense and disappointment down the road.
Before you become enamored with a home’s brand-new kitchen or great backyard, here are a few important questions to ask:
- What types of properties are located near the home? Neighboring properties can have a major impact on a home’s value—as well as the owner’s happiness. For example, nearby commercial and industrial properties are likely to have a negative impact on resale value. If you notice a vacant lot, it could be a sign that a new construction project is likely. Determining if there are any building plans for the vacant lot will help you gauge whether the home you are interested in will someday lose its great view or the neighborhood will experience a surge in traffic. In addition to these types of properties, be on the lookout for potential nuisances, such as power lines, train tracks, or a nearby highway or airport.
- What other factors could impact the home’s future resale value? When you are house hunting, a subsequent move may be the last thing on your mind. However, resale value should be an important consideration for most buyers. While the neighborhood and surrounding properties generally have the greatest impact on resale value, other considerations are important as well. For example, does the home have a choppy floor plan? An inadequate number of bathrooms? A small garage? Structural flaws like these are difficult to rectify and could be a powerful deterrent to future buyers.
- How long has the property been on the market? Gaining a better understanding of the seller’s situation will be helpful if you are serious about making an offer. If the home has been for sale for three or more months, there is a strong chance that you will be able to negotiate the price. On the other hand, if it was just placed on the market, be prepared to act swiftly—newly listed homes tend to generate a lot of interest, and you will face more competition.
- What are the average monthly tax and utility costs? As a homeowner, a sizable part of your monthly budget is dedicated to utilities and property taxes. These expenses can vary greatly from one home to another, so they may be higher than what you are used to paying. To avoid an unpleasant surprise, consider asking the seller if you could review some of their recent bills in order to help you determine what living in the home will actually cost.
- How old is the roof? Replacing a roof is one of the most expensive repairs you may have to make as a homeowner: a 2015 report from the National Association of Realtors estimated that the median national cost of replacing an asphalt roof is $7,600. If you are interested in a home, determining when this important component was last replaced could help you plan your budget—and whether you truly want to make an offer on the home at all.