What Do Before You Make an Offer on a House

Are you about to make an offer on a new home?

We recently made a successful offer on a new home purchase – but, before we made the offer,  we made sure to consider a few final details.

Assuming you are ready to buy a house (based on needs, wants, and understanding of what’s available), and based on both your stage in life and financial status, here are the things we found were critical to our decision.

Double Check the School Situation

Don’t assume your new home will always be in the school district or specific school you are looking to get into. Double check with the district they aren’t about to re-zone or open a new school close by.

Also, if your kids are younger, make sure to consider not just the district, but possible difference in middle school or high school based on the location of the home.

Ensure the Price is Accurate

Before you started your home search, hopefully you got a pre-approval letter showing how much mortgage you could take on. Additionally, hopefully you ran the new mortgage payment, taxes, HOA dues, and insurance through your monthly budget to ensure you are not buying too much house.

The question to ask now is, does the house you are making an offer on fit within your initial financial guidelines?

And don’t just use the Zillow estimate, but make sure it’s a part of your own calculation. Look at the square footage of the house and acreage, and double check the price is what it should be, not just what the seller wants.

Take Another Walk-Though

Hopefully you’ve seen the house at least once.

But, before you get official with your offer take one last look through the house to make sure it’s exactly what you want, and to also check for anything you may have missed in your initial casual walk-through.

  • Look behind doors and under furniture.
  • Check electrical outlets, faucets and drains, and pipes, too.
  • Open closets, cupboards, and other 
  • Notice the small details.

When you know you may own a house soon, you view it differently.

Review the Seller’s Disclosure

Here in Texas, we are given a seller’s disclosure we must review before making an offer.

It contains all of the upgrades and repairs done on the house by the previous owner. This information is key for making estimates of what kinds of repairs you may need to do in the next year or two.

But don’t just check out what was repaired or upgraded – consider what wasn’t.

Review the Utility Bills

You may be able to afford the new mortgage payment, but can you afford the new electric bill?

Most sellers these days will prepare a utility estimate for you to review prior to making an offer.

Study this carefully and make sure it fits well into your budget, and maybe consider what the bills would look like if costs were to go up, either seasonally or for a longer period of time.

Talk to the Neighbors

The house might be your dream home, but the neighbors might be questionable. Make an effort to ask around about the neighborhood and the current residents.

Also, drive through the neighborhood at different times of the day. See who’s out and about.

Maybe stop and talk to them and see if they are the type of people you want to be living next to.

Research Your “Comps”

Your real estate agent should be able to pull real estate comparables, or “comps” which they are commonly called.

These are recent sale prices in the area for houses with similar square footage. This will give you confidence you are making a good offer.

Just know they aren’t the end-all-be-all because floor plans, acreage of the lot, and other factors like a new roof or upgraded kitchen can swing the price quite a bit higher or lower.

Google the Address

Spend some time online researching your property’s address.

Simply perform a basic search in Google and click the “News” results tab to look for any troubling news about your future house.

Do the same for your neighborhood.

Understand The Process

Once you make the offer you’ll typically have just a few days to get an inspection and get estimates on remodeling, repairs, etc.

Talk to your agent about what other steps you’ll need to take once your offer is accepted.

One final note about making the offer itself…

There’s a saying that goes:

You make your money on a home when you buy it.

But don’t let this rule your thinking when it comes to making an offer.

A home is mostly just a nice, big expense. If you luck up and make some money on appreciation, great!

But don’t sweat it if you feel like you have to offer what the seller is listing the house for.

If it’s just come on the market and you’d feel really bad if you lost the home to another buyer, then make a high offer and be happy with your new home.

What advice do you have for anyone considering an offer on a new home?

Avatar About Philip Taylor, CPA

Philip Taylor, aka "PT", is a CPA, blogger, podcaster, husband, and father of three. PT is also the founder and CEO of the personal finance industry conference and trade show, FinCon.

He created Part-Time Money® back in 2007 to share his advice on money, hold himself accountable (while paying off over $75k in debt), and to meet others passionate about moving toward financial independence.

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  1. We were burned by a lousy home inspector that was recommended by the realtor. They were working together to make sure the home sold. So many things were answered incorrectly or not disclosed at all. So my advice is to never use the home inspector recommended by the agent.

  2. Avatar Long Pham says

    To add to the Google results. Do some map reconnaissance of your potential neighborhood. You’d be very surprised how many homes are very close to train tracks. You’ll want to know how close you are to neighborhood parks (some people don’t like the noise of early morning softball games on weekends). Being within a few miles of a fire station will actually lower your home insurance costs too.
     
    I would also recommend in addition to the home inspection, to bring in your own termite inspector. My experience is that termite inspectors often have different opinions and if I had brought in my own before I put in an offer on my house, I could have gotten the homeowner to pay for tenting in addition to the other repairs and spot treatments they did.