Questions to Ask When Buying a Home[cite::98::cite]

Whether you’re purchasing your first home, refinancing your existing house or building your dream home, we've got the right questions for you to ask the right people.

Questions to Ask a Real Estate Agent

I’m buying an existing home, what should I ask the real estate agent?

Questions to Ask a Builder

I’m building a new home, how do I find the right builder, let alone a good builder?

Questions to Ask a Lender

I’m taking out a loan, what do I ask the lender, and do I need a Home Warranty?

Questions to Ask a Real Estate Agent

When looking for a real estate agent to buy or sell a home, it’s crucial that you find someone who understands your requirements and acts on those accordingly. The right agent can help ensure you have a low-hassle experience.

Before you hire an agent, interview at least 3 agents in person. Get recommendations from friends, family and neighbors. Look on the web, in home magazines and the local newspaper. The interview is simply an opportunity for you to meet the candidate and explain your needs. It doesn’t have to be formal. Agents should be able to answer the following:

Designations, such as Graduate Realtor Institute (GRI) and Council of Residential Specialist (CRA), require that agents take added, specialized real estate training as well as follow a code of ethics.

Having resources, such as in-house support staff, access to a real estate attorney, and assistance with technology, can help an agent find you a home.

It’s important to discuss the agent’s commission and cancellation policies. A great way to get a feel for the agent’s professionalism and tactics may be to ask how they’ve dealt with a past client who found a home on their own merits. Find out if the agent will still be entitled to a full commission. Ask about early cancellation fees that may apply if you are dissatisfied.

It’s important that the agent keep you informed at a frequency that works for you. Find out upfront what you can expect.

The agent’s answer can help you assess what’s important to the agent and determine how closely the agent's goals and business emphasis work with your own.

Ask recent clients about their experiences with this agent. You may want to find out whether the client was pleased with the agent’s communication style, work ethic and follow-up.

Questions to Ask a Builder

Asking questions and receiving answers can result in strong communication between you and your builder, which can be critical to avoid problems and delays, and keep extra expenses down.

Logistical Questions

  • How long will it take to build my home?
  • What is your price range?
  • What types of floor plans do you offer?
  • How many times has this plan been built? Will my home be the first?
  • If I have a home to sell, will you let me purchase a home contingent on the successful sale and closing of my current home?
  • Has there been any special assessment financing for this property?
  • Is everything I see in your model homes included as standard features?
  • Can window coverings be installed during the building process and included in the mortgage?
  • How do you compare with other builders? Why are your prices higher/lower?
  • What kinds of amenities can you provide?
  • What kind of warranty do you offer?
  • Can I add a clause to the contract to ensure that any material installations performed by your workers do not void the warranties?
  • What in your contract covers material changes? Do I have to give you approval first?
  • Are there any transfer fees?
  • How many years have you been in business? Are you financially strong? What makes you different from other home construction companies?
  • Will I have access to the home during the building process? How often?
  • Can you provide me with three references?

Additional Expenses

  • How much are the taxes? Are there Home Owners Association (HOA) dues for the area I'm interested in?
  • Is there a lot premium for the home site?
  • Are there any other costs?

Land and Safety

  • What will be built on the adjoining/adjacent properties?
  • How is any undeveloped property zoned?
  • Has a soil test been done, and has it passed inspection?
  • Can you show me a plan of the actual lot to evaluate any possible easements?
  • Do you guarantee that this home will be built completely code-compliant?

Construction

  • How do the subcontractors feel about the building quality? How reputable are your subcontractors?
  • Have you built this size home before?
  • What are your company’s strong points as a custom home builder?
  • What kind of drainage system will the home site have? Is it the correct one?
  • How can you ensure that my house will reflect my individual style? What types of interior finishes and upgrades do you provide, and do you offer the services of a professional interior designer to implement my vision?
  • Does the community have an architectural control committee?

Reputation and Stability Issues

  • Can you provide me with three references?
  • Can you give me a list of several of your properties in the area so I can see a representation of your work?
  • What is the average length of time both sales and construction personnel remain with your company?
  • Have you ever been associated with a builder that filed for bankruptcy?

Customer Service

  • How responsive and accountable are you in terms of customer service? Are your existing homeowners satisfied?
  • Explain your processes and systems. Do you provide literature that specifies what I can expect while you’re building my home?
  • Who can I go to with questions when visiting the new home site? Is there a specific contact person who can answer questions about the process for building my home?
  • What is the customer service policy after I move in? Do you warranty your work?
  • Some home builders have computerized systems that keep track of all customer service follow-ups that can let you know how consistent and responsive they really are. If the builder has a system ask whether you can see the records.
Quick Tip: Be Involved

Involvement in the entire home-building process is the key to getting what you want in your home, and to enjoying living in your home for years to come.

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Questions to Ask a Lender

You can get a mortgage from many different sources, such as banks, mortgage companies, credit unions or a mortgage broker. Finding a knowledgeable mortgage lender who will work with you to meet your needs can make the home buying process much easier. Do your research to make sure you’re dealing with a reputable lender.

Before you complete a loan application, a lender can only require a deposit to obtain your credit report.

After you’ve completed your loan application and have received your good faith estimate and truth-in-lending disclosures, some lenders require an application deposit that may or may not be refundable. It’s also common for lenders to require customers to pay for the appraisal at the time it’s requested.

The interest rate of the mortgage you’re applying for may go up or down before you close on the home. If the loan terms and conditions allow, it may be wise to lock in the rate for a specified period of time.

To effectively evaluate different lenders’ programs, compare the annual percentage rate (APR) of the mortgage interest. It’s generally higher than the interest rate quoted because it includes the lender's fees. The APR spreads the fees paid to the lender at closing over the life of the loan.

Your mortgage loan officer is required to provide you with a good faith estimate of your closing costs within 3 days of receipt of a completed loan application. This lets you review the transaction and question anything you’re unsure about.

Once you’ve completed a loan application, the lender requires documentation to verify income, employment and assets.

Different loan programs offer various down payment options.

Typically it takes 30 days to complete a transaction, but some can take as long as 90. Actual time depends on how quickly the lender can get an appraisal on the property, a preliminary title report, and verification of employment and bank accounts.

As in most relationships, communication is key. Your partnership with your lender is no different. Find out upfront how you’ll be kept informed.

Quick Tip: Be Thorough

Don’t just look at the mortgage interest rate. Take a close look at all the terms of the mortgage program.

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Do I Need a Home Warranty?

You may be offered a home warranty as an incentive to buy a home. A home warranty is a service contract between a homeowner and a home warranty company that provides discounts for repairs and replacement costs of specific components in a home. It differs from homeowners insurance and does not cover all home repairs. Each plan can vary significantly, so it’s important to read contracts thoroughly.

Quick Tip

Contract costs and coverage details should be outlined in the service contract of any home warranty. Often, there’s an additional service trade fee each time a service professional comes to your home.