Have you ever had no idea what questions to ask when buying a house? Maybe you’ve gone to talk to a seller and just gone blank. Don’t you worry. I am going to make sure that never happens to you again!
Every investor knows that you need information to determine if a property is a good investment. But, you have to know what kinds of questions to ask when buying a house so that you get all of the necessary numbers. No one wants to make an offer, have it accepted, and then realize, whoops, it is not as good of a deal as you thought.
What Questions Do You Need to Ask When Buying a House for Investing?
Today I am going to share with you the absolute most important questions to ask when buying a house to invest in. I want you to have all the information you need to make a decision. You have goals and dreams that are dependent on smart financial choices, so make sure you take note of these questions.
I want to see you succeed as an investor! And be sure to tell me all about your journey in the comments at the end of the post. Let’s get started.
1. Is an agent listing the house?
You may not realize it, but when an owner is contracted with an agent to list the house, there are all kinds of hoops you will need to jump through to use creative financing options with the seller. This is why I never work with a seller who is listed with an agent. If the property IS listed with an agent, say, “Ok, got it. I won’t be able to work with you right now, but feel free to contact me when you contract expires.” No ifs, ands, or buts.
If they say, “No,” though, then keep moving through the questions.
2. Is the house currently vacant?
I only work with sellers who have a vacant house, but you can always make your own decisions on this. Trust me, you don’t want recycled occupants. You want to start fresh with new renters with the numbers you have established, not inherit someone else’s profit strategy. If the house is vacant, you can get it ready more quickly and get a jump start on getting it rented out.
3. What is the type of home (house/condo/mobile home)?
I don’t work with mobile homes, but again, that’s up to you. And, some areas are chock full of condos that a lot of people live in, so you will just need to know your area to determine what you want to buy. If the property IS a condo, though, make sure to get the amount of the monthly HOA payment and work that into your numbers. Sometimes the property alone works with the numbers, but once the HOA is added in, it doesn’t. Take note!
4. What is your asking price?
Now we’re getting to the nuts and bolts. Take note of this number because it is going to filter into all the rest of the questions you ask pertaining to your eventual offer on the property.
5. What is the property worth? Why do you think that?
You already know what the seller wants to get for the property, but now you need to get further into the facts. Usually the sellers will say that the property worth is the same as what they are asking. Who doesn’t want to try to get the maximum amount of a sale? But, now you need to find out why they think it is worth that much?
Did they get it assessed? Look it up on Zillow? Have it appraised? Appraisals are only good the DAY that they are completed. If months or years have passed, it is basically worthless. So, keep that in mind.
6. Is there anything owed on the property?
Basically you need to find out if the seller owns the property outright (“free & clear”) or if they still owe on the principle. This helps you to understand what kind of profit potential exists with the property.
7. How much is the monthly payment?
Some sellers might start to get squeamish at this point, so put them at ease. Remind them that you are here to help them with their property. So, you need the information to make the best offer for everyone.
When you know the monthly payment you will be able to take it into account with how much you can set for the renting price for a lease option. This sets your profit amount. It also helps you to determine what kind of an offer you will make on their property once you get to that point.
8. What is the interest on the mortgage?
This is already factored into their mortgage payments, but if the interest is high, you may be able to get a lower rate yourself. So, it is always good and important to know this information, too.
9. Are you in arrears?
No seller wants to be accused of being behind in the payments. It is still necessary to understand if they are behind in their payments. Make sure to take note of this because there may be some hoops to jump through if you proceed with an offer.
10. What repairs are needed on the property?
The seller is likely going to know what kind of repairs are needed around the property. Remember when you asked about whether or not the house has been vacant? If a house is not lived in for a while things can go wrong and not be handled in a timely manner. Smells and odors can develop, so you want to know what you are looking at for what work needs to be done.
11. By when do you want to move?
I am not in the habit of throwing people out of their homes. But, I also cannot do much with the home when they are still living there. So, you want to make it clear to the sellers that you won’t throw them out of their house. But, they need to know that the deal is not final until they have moved out.
You could also suggest a set time for them to be out of the property that works for both of you. Then at least you’ll have a timeline for when you’ll be able to get started on the repairs. Make a plan with the seller if you can, and then stick to it.
12. Why are you selling the property?
Often this information will come out as you chat and talk. But, you want to understand why they are selling the house. Are there underlying issues with it that might make it a bad purchase for you? Is the neighborhood unsafe (and probably unlikely to draw in renters)? Etc.
This information is very important to determine whether or not you are going to eventually make an offer. So, make sure you find out the core reason for why they are selling.
Start with this list, but don’t stop there!
There is so much to consider when choosing a property to invest in. Though these are absolutely the most important questions to ask when buying a house, I would love to teach you everything I know. And, this is why I have put together my premier course to teach your everything I know! If you are truly serious about investing in real estate, you need to check out First Deal Done Fast.
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You’ve got the questions. Now start getting those deals!
Real estate investing is an exciting market to be in. I just know you are going to do amazing things with it. If you’ve decided to join me in First Deal Done Fast, then I cannot wait to get to know you better.
I am confident that these questions will get you ready to make a decision about the property. And, you will surely be able to determine whether or not it is a good fit for you. Talk to the sellers. Get the information, and move forward with your investing goals!
I want to know how it went! Make sure to come back and tell me how these questions have helped you evaluate your houses. Comment below to tell me all about it.