Home buyers or their buyers agent can’t ask too many questions before purchasing. The better informed the buyer is, the greater the probability the home will be a long-term, satisfying purchase. But home buyers and or their buyers agent who fail to ask key questions and only discover problems after purchase may have little practical recourse. Here are six of the toughest questions to ask a seller.

Why Are You Selling Your Home?

The reason it is important for buyers to know why the seller is selling is to determine how flexible and motivated the seller will be with price and terms. As a buyer, it is shocking to discover how many listing agents either don’t know the seller’s true reason for selling, or they pretend they don’t know.

Sometimes,it is none of the buyer’s business why the seller is selling, such as a divorce or family problems. But often it is vital for the buyer to know the true reason, such as when there is a pending foreclosure and the buyer must be able to complete the purchase before the foreclosure sale deadline

If the seller is a retiree, they may want to finance themselves with a first or second mortgage and use the income for their retirement.

How Did You  Determine The Asking Price?

Smart home sellers and their listing agents set the asking price based on recent sales prices of nearby comparable homes. But some home sellers, especially  do-it-yourself “for sale by owners,” set their asking prices based on their purchase price, plus capital improvements added, plus the inflation rate, or some other nonsense method that bears no relationship to actual market value. Still other sellers set their asking prices at the total cash they need to pay off their mortgage(s) and other debts. Naive home sellers don’t realize how smart buyers really are. With the internet, buyers often know vast details about competitive homes, which sellers haven’t even inspected. That’s why it is so important for serious buyers or their buyers agents to inquire of sellers and their realty agents how the asking price was established to discover if it is realistic or plucked from the air.

What Was Your Purchase Price?

If the home was purchased many years ago at a price far below today’s market value, the seller has lots of room to negotiate. However, if the purchase  price was close to today’s current market value, then the seller will usually be inflexible negotiating the price and terms. Occasionally, the seller overpays for the home at the time of purchase. This is especially true for luxury homes for which there is limited buyer demand. These overpriced residences often languish on the market unsold for many months until the seller becomes motivated to sell at the current market value even if it’s a loss. Even when  a home seller or the listing agent refuses to tell a serious buyer the purchase price, it is still possible in Knoxville to discover this information at the county recorder’s office or get it from their web site. Another source is the tax assessor’s office. The purchase price will be part of the official records. Knox County has this information available online. We will be glad to show the buyer how to pull up this information if you don’t know how.

What Home Defects Have You Reported On The Disclosure Statement?

If you are buying a house or condo that is listed for sale with a professional realty agent, then the agent should provide you with a written defect disclosure statement to prevent future lawsuits for misrepresentation. Smart home buyers need to know the defects of which the seller is aware to take into consideration when making a purchase offer. Of course, a home purchase offer should always provide a contingency for the buyer’s approval of their professional inspector’s report, just in case the seller “forgot” to reveal defects. KDR will work very closely with the inspector and with our strong background in building, we will be able to find any problems with the house.

After the buyer’s purchase offer is accepted by the seller, if it contains an inspection contingency clause and that inspection reveals unexpected defects, the buyer has several choices: (a) a repair credit can be negotiated with the seller, (b) the buyer can cancel the purchase and obtain refund of the good faith deposit, or (c) proceed with the home purchase anyway. Home buyers, and their buyer’s agent should always accompany their inspector to discuss any problems discovered. What looks like a serious defect often turns out to be unimportant after the inspector and buyer’s agent explains it to the home buyer.

Are There Any Current Or Planned Off-Site Facts That Will Affect This Home?

The listing agent, home seller and the buyer’s agent should be aware of any significant off-site facts that affect or might affect the home such as a street widening project that will take some of the front yard away from a home, or a utility company planning to take part of the yard to install water or sewer lines.

Conclusion

Just remember, every home has drawbacks and no home is perfect. However, home buyers who ask these tough questions in advance will likely maximize their long-term satisfaction with their new home and keep out of any unnecessary legal problems.