Despite rumors to the contrary, buying a house is not included in the top ten stressful life events.
Taking on the mortgage comes in at number 20 on the Holmes-Rahe Life Stress Inventory, and moving house comes down the scale at 28 on par with home remodeling.
Just because it is not in the top ten life stressors, it doesn’t mean that buying a house is not stressful. You have a ton of paperwork, and it is a massive investment of time and money.
Plus, you are potentially committing yourself and your family to live in this house for a long time. You are not looking for an object but a potential home, which is an emotional investment tied up with your dreams and fears.
One of the best ways of dealing with the stress of finding a home and managing your investment of energy and money is to do your research.
You need to ask plenty of house buying questions of yourself, your seller, your estate agent, your vendor, your banker, and everyone else involved in your house buying journey.
Examine Yourself – Questions for You
Before setting out to buy a new or old house, there are some fundamental questions to ask yourself and some straightforward administrative ones.
1. Why Do You Want to Buy a House?
Obviously, you know why you want to buy a house; you are an adult, it is an investment, and you need somewhere to live.
You may think you know why you want to buy a house, but it is worth grabbing a blank piece of paper and a pen and writing down all the reasons why you think you want to buy a home at this stage in your life.
The answers may include:
- It’s a waste of money paying rent.
- It’s what adults do.
- You need to have a place to live.
- It’s going to make you rich when you retire.
- You could rent it out and get an income.
Try and get all your reasons down and then take an objective look at why you think you want a house.
Buying a house is a massive investment in time and money. Ensure you are fully committed to the idea rather than just drifting into it because you have reached that age.
2. Can You Afford to Buy a House?
When you buy a house, it is not a straightforward matter of having a deposit and a mortgage.
The capital cost is the easiest part; budgeting with all the additional fees and expenses is the part that adds all the stress to your house-owning dreams.
If you are buying a house in a different area of the country, your house-hunting expenses will be more than if you purchase in your neighborhood.
Plus, you have all the extra costs associated with owning a house – legal fees, removal costs, hiring an architect for remodeling, necessary repairs, and additional furnishings – costs that make renting a house more advantageous and attractive.
Buying a house is a massive investment so put together a budget plan worthy of this substantial investment and then track your costs.
3. Are You a Good Bet for the Money?
If you have a lousy credit score and an insufficient capital resources level, you will struggle to get a bank to lend you the money to buy a house.
Some schemes help newcomers to the housing market get on the property ladder, and you may be eligible.
You need to closely examine your finances to see if a bank will favor your mortgage request. Otherwise, you are setting yourself up for disappointment.
You may need to give yourself a year to sort out your finances or adjust your expectations about the type of house you can afford.
4. How Long Before You Need to Move?
A small townhouse may suit a couple, but if you plan a family in a couple of years, you need to prepare for expansion or a house move. Your work may involve regular relocation on a five-year timescale.
Get out your crystal ball and look to the future – realistically, when are you going to need to sell up and move on?
Like most capital investments, you need to be in it for the long-term to stand a chance of making a profit – five years as a minimum.
If you know you need to move inside that timescale, do the numbers. Work out if it will cost you more to buy and sell a house than if you rent somewhere to live.
5. Can You Make a Profit?
Some people look to buy a rundown house, update it, and sell it on to make a profit. If you have the budget and the skills available to take on a “fixer-upper,” you can make money in the property market.
You can also lose money in the property market by taking on a “money pit” in the wrong area. Plus, remember you are going to have to live in the mess while you do the remodeling.
If you are looking to buy a house and flip it for a profit, do your property ownership research, set a realistic budget, and make sure your partner is on board with your plan.
6. What About the Neighborhood?
Location is one of the most significant factors in house prices. Small houses in desirable neighborhoods often cost more than large houses in less desirable locations.
Although you can get more “house” for your money in a less desirable neighborhood, the disadvantage is that you need to live there and put up with the reasons why that is a less favored area.
What do you need from your neighborhood – good schools, safe streets, fresh food markets, or green space?
You can get hold of neighborhood statistics for crime, education, and health, and you can make some visual observations by visiting potential locations – whether that be urban, suburban, or rural.
It will help you in your house search if you choose which neighborhoods suit you in advance of starting your house search.
7. What Are You Looking For?
Houses come in all shapes, sizes, and conditions.
Your dream house may be a five-bedroom mansion with an indoor pool, but your budget may not stretch that far. Most people have a gap between what they want and what they can afford.
You can focus your house search by setting your minimum requirements – how much space and features are essential.
Of course, if you can’t find anything that meets your minimum standards, you may need to make some further compromises.
8. What’s Your Top Price?
When you start house hunting, everyone involved will try to push you to pay the maximum amount they can squeeze out of you.
It is understandable, but it also means that the seller and the agent don’t recognize where your limits are as they expect you to be pitching below your top price.
It is vital for your financial health that you know your top price and at what point you need to walk away from a potential house.
It is not enjoyable when someone else bids a few thousand more, and you think one more bid will give you the purchase, but there are other houses on the market. Ones that won’t bankrupt you.
9. What Sort of Negotiator Are You?
Unless you are buying a new house (even then, there is some haggling), you expect to negotiate with the seller. You rarely do it directly as the estate agent acts as the go-between, but there is that bargaining element.
It will help you negotiate if you understand what type of negotiator you are – can you set a limit and stick to it, or do you get pushed?
If you hate negotiating, enlist the help of a friend to keep within your limits.
10. How Much Time?
Time pressure can result in bad decision-making. House hunting is a time-consuming business, and if you fit it into evenings and weekends, it can take a long time.
You need to ask yourself how much time you can devote to your house buying project and whether it is better to take some vacation time and concentrate on getting the job done or if the leisurely approach is acceptable.
If you are under pressure to be out of your current home and into a new one by a fixed date, it weakens your negotiating hand.
If you have time pressure, have a plan B and keep your cards close to your chest.
11. Old House, New House, or Self-Build?
How do you feel about taking on an old house?
Are you excited about polishing up an architectural gem and giving it a new lease of life or terrified at the thought of remodeling?
What about a new house – cookie-cutter clones or a clean, bright problem-free home?
Or how do you feel about buying a plot of land, pitching your tent, and building your own home?
You may have opinions on what it means to buy a house with a preference for the old, new, or alternative.
Having clarity over what you and your family are prepared to accept in your next house purchase broadens your possibilities or focuses your search.
12. Why This House?
The last house buying questions you need to ask yourself before you open negotiations include questioning why this house appeals to you?
Is it the fresh white paint, the attractive layout, or the smell of roasting coffee?
When you view a place, you get an emotional response to the question, could I live here?
The fresh white paint could be covering up a problem with persistent mold. The smell of coffee may be the seller’s tactic for influencing you into a snap decision.
Take time to examine why this house appeals to you and see if it is superficial or if the home meets your minimum standards of what makes a house a home.
Questions to Ask a Seller
If you can talk directly to the seller, you can get a lot of helpful information from what they say and how they say it. The whole point about these questions is to find out if you are buying a house that is an investment or an issue.
The seller is interested in gaining the maximum price for their investment, and they may have pressure to move quickly.
The house-buying questions for the seller are about getting a feel for why they are selling and paying a fair price for the house.
13. Why Are You Selling?
This question is more of an ice breaker than an in-depth interrogation of the seller’s motivation. It is useful for background, and the answers are likely to be straightforward.
People sell houses because of death, divorce, relocation, or a desire to downsize. People’s lives change, and they need to sell up and move on.
People also sell houses because their neighborhood changes – higher crime rate, undesirable neighbors, and problematic redevelopment like a highway cutting straight through the middle of your land.
Find out why your seller chooses to put the house on the market and use your gut feeling and observational skills to see how you feel about their motivation.
If they are selling up because they have a termite infestation and the house is in danger of falling down, you want to find out the bad news before getting stuck with a flawed purchase.
14. How Long Have You Lived Here?
The longer someone has lived in an area, the more likely it is that the area is a pleasant place to live. That may have changed recently, prompting the desire to move because there is an issue in the neighborhood.
Encourage your seller to talk about their experiences of living here and why it is time to move on.
If you can, walk or drive around the neighborhood and see if what the seller tells you matches what you observe.
Try and talk to the neighbors for a rounded view.
15. How Flexible Are You on Price?
Buying a house is usually a haggle with a series of offers. But some sellers are not flexible on price, they have priced their home to sell at a fair price, and they are unwilling to move except upwards.
There is a difference between putting in a low starting offer and insulting the seller with a derisory offer; before deciding where to pitch your bid, sound out your seller for their approach.
16. What Work Have You Done on the House?
Most homeowners set about improving their home, and there is routine maintenance. You may want to ask some specific questions about roof replacement, checking the electrical wiring, and other significant areas.
But a gentle invitation to talk about the home improvements the seller has carried out in the past years gives you an indication of how well maintained and loved the house has been.
Most older houses need updating and renewing; recent work on reroofing or resurfacing the driveway means that is one less job for you to do when you move in.
Alternatively, you may need to budget for urgent repairs in the first year – this prospect amends how much the house is potentially worth today.
17. What is Your Timescale?
A seller who needs to sell quickly is more willing to be flexible on price than one who is selling their parents’ property and is more interested in making the maximum profit.
With older houses, there is a chain of transactions with a first-time homebuyer at one end and someone leaving the housing market at the other.
It is worth finding out if there are any time pressures or constraints involved, which may improve your bargaining position.
18. What Are the Neighbors Like?
Most people will give a bland evasive answer to this question, but your seller may have opinions they are willing to share. What your seller is willing to say about the neighbors provides some background impressions of how this house would work out for you.
Listen for what your seller doesn’t say about the neighbors. What the seller doesn’t say is often more revealing.
If your neighbors live nearby, they influence your daily enjoyment of your property. If your nearest neighbor is a mile or more away, your potential relationship is less of an issue.
Don’t rely on your sellers for all the information on your near neighbors. If your seller is moving because of the neighbors, they will gloss over any potential issues to avoid losing the sale.
Use your observations of the neighboring property – can you hear loud music? Is it well maintained?
19. How Long Has the House Been on the Market?
There are plenty of reasons why a house may be on the market for a long time. It does not automatically mean there is something wrong with it.
It can mean that the seller is holding out for an unrealistically high price or has had a few poor experiences with past buyers.
20. How Much Did the Seller Pay for the House?
If the seller is unwilling to answer the question, you can find out from your estate agent or official statistics.
Is the rise or fall in price in line with expectations?
A risk with buying a house is that you pay too much initially, and house prices then fall, leaving you with negative equity.
Questions to Ask the Real Estate Agent
Most house purchases involve working with a real estate agent, a rich source of helpful answers to your house buying questions. Some of the questions are the same as you ask the seller.
Unless you are paying somebody a fee to find your ideal house, the estate agent makes their profit when they persuade you to buy a house from one of the sellers on their books.
A successful estate agent has plenty of properties on their books, and although they want to sell you a house, they also have an interest in giving you an excellent service.
When you want to sell and move on in a few years, they hope to benefit from your business.
21. Why is the House Available?
Although you ask the seller why they are selling the house, the real estate agent may have more information.
They may not be at liberty to share that information with you, but at the very least, you can see if the seller and the estate agent have the same story.
22. How Long Has the House Been on the Market?
When you ask the estate agent this question, follow up with further questions about the price – has it been dropped, and if another estate agent had the house on their books first.
Some houses take a long time to sell because if it remains on the market for a long time people start to feel there may be something wrong with it.
From a buyer’s point of view, there may be an opportunity to put in a lower offer because the seller may want to ditch the property.
If the house has been up for sale for a year or more, it is worth getting a survey or property assessor to give you an independent assessment of value before putting in an offer.
23. How Many Other People Are Looking at this House?
It is the estate agent’s job to sell houses and earn a commission, and it is in their interest to put pressure on buyers to purchase at a high price.
Generally, estate agents will give you a reasonable feeling for the level of interest in how many times they show the house to potential buyers.
Plus, they may organize mass viewings, showing you that there is a high level of interest in the property.
24. How Often Does a House Like This One Come on the Market?
When housing is a scarce resource, you get pushed into paying a higher price for it.
If this is the type of property that regularly comes onto the market, there is less urgency to close this deal.
25. What Are You Getting for the Money?
When you get deeper into the sales process, you get the fine details of fixtures and fittings plus boundaries.
It is worth asking at the viewing stage so you can judge if you are getting a good deal for the money.
If the large greenhouse on the property attracts you, you may find it less of a bargain if you find out that the seller intends to sell or remove the greenhouse as a separate transaction.
26. Where Are the Boundaries?
The Japanese style of gardening “borrows” the landscape to make the garden feel much more extensive.
The attraction of buying a house is that you get some land along with it. It is worth being clear how much of the land you see around the property comes with the house.
Plus, the land and house’s orientation determines how much you get to enjoy your new property.
27. How Quickly Do Houses Sell in this Area?
Sometime in the future, you may be in the position of selling this house. It is helpful to know how quickly you can sell the house if you need to move or if you need to plan for a longer timescale.
Investing in a house that may take years to sell further down the line may not be the wisest decision.
28. What is the Usual Selling Price for a House Like This One?
Remember, your estate agent sells many properties, and they have a good idea of similar houses and the prices people are willing to pay.
This question lets you know if the asking price of the house is reasonable for the current market.
29. Have You Worked with the Property Developer Before?
If you are buying a new house with an estate agent, it is worth finding out if they have worked with the property developer on other estates.
Then you can ask about reputation if different properties have increased in price and general quality questions.
30. Are There Any Development Plans in the Area?
Estate agents are an excellent source of information about potential housing and other developments that may impact property prices.
As part of your research, check with the local planning department and see if any plans may affect your enjoyment of the property.
31. What is the Area Like?
Your estate agent does business with people moving in and out of the area.
Although you won’t wholly judge a place on your estate agent’s opinion, it is good to get as many different viewpoints as you can about an area.
If you are moving to a new neighborhood, it is not easy to judge if you will be happy there, so collect feedback.
32. Who Pays the Real Estate Agent’s Fee?
Whoever hires the real estate agent to sell or buy a property pays the agent’s fee, but your transaction may differ.
Clarify upfront to understand your costs and, to an extent, whose interests the agent protects.
Questions to Ask a Vendor in a New Development
One of the main issues with buying directly from the vendor of a property development is the possibility of purchasing off-the-plan rather than the finished product.
The advantages are that you get to pick the finishes, but on the other hand, you can’t see the finished product until you have bought it.
House buying questions for a property developer cover practical matters like the quality of the finishes and appliances installed.
33. What Other Developments Have You Completed?
As you can’t see your finished house, go and look at other developments and talk to homeowners (hopefully happy).
Even if you need to make a special overnight trip, it is worth getting a feel for the developers’ quality of work and the experience of other people who have done business with them in the past.
Plus, it is reassuring when your developer has an excellent portfolio of successful developments. You can determine if those properties are now selling at a profit for the buyers.
34. What Do You Get for the Money?
Drill down for the details – white goods included – make and model, landscaped garden, hard standing for your car, fitted wardrobes, etc.
Get a complete list of what you can expect when you get the keys to your brand-new house.
35. What Does the Warranty Cover?
No matter how good the developer is, there are always items that need finishing and repairing in a new build. It may be minor, like a cracked windowpane, or more severe like a leaking roof.
Either way, you want to be sure that whatever you find as the house settles, you get prompt remedial action when necessary.
Check if the developer covers the household appliances or if you must rely on the manufacturer for any issues with your washing machine or range.
36. What’s Your Legal Ownership?
Check that you are buying all the property rights and have ownership of the land beneath your house.
Property ownership rules vary between States and countries, so be clear about what you are buying and ask a lawyer to explain the legalities if any doubt.
37. How Much Choice?
The joy of buying a house from the vendor is you get to choose your finishes and appliances. But, the range of choices varies between vendors – your vendor may have four set designs or greater flexibility.
Ask your vendor what your options are and check prices for increasing the quality – the basics may be inclusive in the house price, but premium finishes cost extra.
38. What About the Finance?
Check to see if the loan finance is part of the package or if you are free to make alternative arrangements with another bank.
Complications can arise with properties sold under a combination of purchase and rent.
Your vendor may be offering a simple buy-the-house deal or be in partnership with a bank to provide a package deal.
39. What About Restrictions?
If your new home is part of a gated complex, there may be a Home Owners Association (HOA) and a set of rules along with a commitment to maintaining community property.
(Your questions for the HOA, specifically, are similar to the set of detailed questions you’d ask a condominium’s HOA).
You still own your house, but you own it as part of a community enterprise. There may be a restriction on what color you paint the outside walls and garden styling to maintain a set appearance.
40. What About Future Developments?
If you are buying a house on a development that overlooks open fields or a natural environment, you may think that the view is part of the package.
However, the developer may be planning to continue building on the site, and the view you currently have is temporary.
It is prudent to ask about future building plans so you know what is happening on the property bordering yours both from loss of view and future noise and disruption.
41. How Green?
You are buying a new build, so it is worth checking how eco-friendly the building process is for the planet and your pocket.
Is the house insulated to cut down on your future heating and cooling bills?
What about energy efficiency?
Your vendor should be enthusiastic about explaining how this house will be efficient to run and maintain.
42. What is the Timescale?
How long will it take the vendor to give you the keys to your brand-new home?
You buy your house off-plan, so when do they start building it, and more importantly, when will they finish?
Check with your vendor if they start work on each house individually or building as a batch. If they are building as a batch, find out if they have enough orders to commence building.
You want to get their commitment on the completion date.
43. When Do You Need to Insure the House?
Accidents happen, and your new house could suffer a fire, flood, or a falling tree. Your vendor has insurance for their construction business, but at what point is the house your responsibility?
You might think it is when you get the keys to the door but check the fine print – when you own the house, you have the risk.
Be clear with the vendor about when you need to insure the property and when they are responsible for any damage.
Questions to Ask the Bank
House buying questions to ask your bank manager relate to the financing of your mortgage or house loan.
It makes sense to have an interview with your bank before you start your house hunting because then you know how much you have in your budget.
44. What is the Maximum Amount the Bank Will Lend?
All banks use a calculation to decide how much money you can borrow from them for a house purchase.
The ideal position for you is to borrow a smaller amount than the maximum because your general living is more comfortable.
45. What is the Deposit Percentage?
Banks are notoriously risk-averse, and they prefer to partner with you to buy a house rather than taking all the risk themselves.
The deposit requested ranges from 10% upwards in most cases.
If you have the funds available, you can invest more of your money in your property and borrow less from the bank.
46. How Long Does the Mortgage Last?
A bank loan over ten years takes more out of your monthly income than one lasting twenty years. A longer loan ultimately involves paying more interest.
Depending on your age and circumstances, you may prefer a thirty-year mortgage or a shorter term.
47. How Does the Financing Work?
Home equity loans work in two principal ways.
You pay off the capital with interest (repayment mortgage), or you only pay the interest. You need a separate arrangement for paying the capital at the end of the loan in the latter case.
Your bank may have other financial packages that work using a combination of these methods.
It is essential for your economic well-being that you understand how your financing works, so ask your bank manager plenty of questions.
48. How Does the Interest Work?
The bank makes money on home loans by charging interest on the capital.
The interest may be variable and fluctuate with the bank lending rate or fixed. Fixed-rate bank loans are time-limited, so you may choose to set your interest rate for a year or more.
The advantage of a fixed interest rate is that you know how much you will pay every month. The disadvantage is that you may pay more interest than the variable rate – you are betting that interest rates may rise.
Be clear on how the interest rate works on your bank’s products because it enables you to know how much you need to spend and compare other bank deals on an equal basis.
49. Can You Overpay?
Imagine you have a terrific year and earn substantial bonuses. Perhaps you could pay off a chunk of your bank loan and save on the interest?
It is possible but check what your bank policy is for paying lump-sum amounts against your bank loan.
Sometimes the bank imposes penalties to compensate themselves for the potential loss of interest – these can make it uneconomic to pay in a lump sum. Check the small print to cover your future possibilities.
50. Can You Take a Payment Holiday?
You may never need this facility, but some finance has a provision that allows you to take a payment holiday for a couple of months.
There are financial penalties with increased interest in the long term, but the facility can be helpful.
51. What About Shared Information?
Before lending you the money, the bank will look for an assessment of the property’s value. You pay for the survey, but you do not necessarily get the report that the bank sees.
It is worth checking if you can gain access to the reports you need for the bank as by using one surveyor for your peace of mind and the banks may save you money on the fees.
52. What is the Process?
You need to check how you access your bank finance – do you need to put an offer on the house and have it accepted first?
Often your bank will give you a preliminary offer of financing, subject to checks on the property you decide to buy.
Before you start house hunting, understand the process you need to access funding.
53. What is the Timescale?
Electronic transfers and documentation have speeded the process of financial transactions, but there is still a timescale involved in the process.
Your bank manager will know approximate timescales for arranging finance in typical house purchases in your area.
If you know how long the process is likely to take, you will feel less stressed while in the middle of negotiations and trying to fix a date for the removal van.
54. What are the Fees?
There is no such thing as a simple bank arrangement – you can expect fees. Find out from your bank manager what fees they will charge and for what.
The bank will probably deduct those fees from the amount they lend you – this leaves you making up the shortfall when transferring the money to the seller.
55. What About Insurance?
The bank will expect you to insure their bank loan in case you die before paying it off. The bank may expect you to arrange a policy through them or may simply want arrangements in place.
If you are buying as a couple, you may want a policy that pays out on the first death.
Either way, part of your house buying questions with the bank will involve discussing insurance for the mortgage.
House Buying Questions Matter
Buying a potential home for you and your family is exciting and also a huge commitment. You want to ask as many people as you can your house buying questions and consider these useful first-time homebuyer tips.
As well as the vendor, seller, bank, and estate agent, invite your friends and family to share their experience. Find out what questions they wish they’d asked and the pitfalls to avoid.
The only way to get the information you need to buy your dream house and avoid a property nightmare is to ask questions – lots of them.