3 Questions to Ask About a Property Before Making an Offer

Homes in autumn.Leaving no stone unturned is easier said than done sometimes during the course of a home purchase. Even with the process of due diligence, a knowledgeable real estate agent, and a comprehensive home inspection, occasionally prospective home buyers make assumptions or simply don’t know all the questions to ask. Here are three more to add to your list:

1. Is the home located in a flood hazard zone? There are free online maps, courtesy of FEMA that show if your prospective new residence is in a flood plain. Check there first and then with the county and the listing agent. If it turns out that the home is located in a flood plain, the cost of living there may be a bit higher because of flood insurance. You will need to find out which type of flood plain you’re in because some have higher ratings than others and require more insurance.

To assess how much more this could cost, ask to see the seller’s flood insurance coverage and bills. That way you can consider the worst-case scenarios, projected costs, and decide if you are comfortable with the property. In many cases, it is possible to assume the seller’s policy when you purchase a residence in a flood plain.

2. How much are property taxes? When you buy a home, it is easy to get so caught up in all of the immediate details that you fail to look to the future. A buyer’s mind is usually so focused on inspections, contingencies, surveys, and closing costs, that they forget to check on how much the property taxes will set them back. If it is never mentioned, bring it up so you will not be hit with an expensive surprise the day your annual tax bill arrives.

3. Is the home in a neighborhood governed by a HOA? This is an important question to ask because in addition to extra monthly fees, past minutes of a HOA can provide you with valuable information about the neighborhood you are thinking of buying in to. Find out about what the HOA fees cover and if not participating is an option. In some communities HOAs exist to maintain athletic facilities such as swimming pools, tennis courts, trails, or boat docks. There is maintenance required and usually extra insurance that all of the homeowners are required to pay. A place that appears to be a steal may not be, when you discover that the monthly HOA fee is $450.00 or $5,400.00 a year. Reading over the old sets of minutes is a great way to gain insight into how the neighborhood has evolved. You may uncover information that will help decide whether or not to buy the home in question. Check out the following blog post on AFR Mortgage’s blog about the pros and cons of home owners associations.

For a wonderful checklist of items that all prospective homeowners should be aware of the Maslon law firm in Minneapolis has published a comprehensive one on their website. You may see it here: http://www.maslon.com/CM/FirmPubs/FirmPubs187.asp

We also recommend that you speak with a licensed real estate professional in your area to make sure that you have all of your bases covered and questions answered.

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