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Five Questions You Should Ask at an Open House

By Colleen Colkitt

1. Is there a disclosure statement I can see?

The disclosure statement tells you what the seller knows is wrong about the house. The disclosure statement list items that may cause you problems and a simple open house walk-through will not necessarily show these issues. It's important to be proactive in your house hunting search and getting all of the facts about the property is crucial, especially at such an early stage in the process.

Some of the issues listed may prevent the house from passing an inspection and it won't produce high results on an appraisal. Some of these problems might include asbestos in the heating system, paint containing lead, or troublesome mold. This information gives an indication about how old the home is. The disclosure statement can provide structural and environmental information as well.

2. Is the property going to meet appraisal expectation for financing?

Going along with the disclosure statement, if the home has too many problem areas it is likely not to meet lender's appraisal standards. Banks and lenders will not be willing to distribute a loan to a home-buyer if the home is too much of a "fixer-upper" because the risk is just too high.

Don't let yourself get in too deep, so before it's too late make sure to ask the open house broker or agent about how recent an appraisal was done on the home, and see if the property is worth the renovation funds to fix it up. Current appraisal at the listing price isn't always reliable. Check with the broker about financing to avoid additional hassle.

3. How long has the property been on the market?

It's important to ask at the open house how long the home has been on the market. Although several other families or interested buyers will be taking up the real estate agent's time, be sure to get a word in and ask politely how long the sellers have been trying to make a deal.

Sometimes a when a home first goes on the market, an open house is a great strategy to get the word out there to many people about the home and give a large amount of people a tour at one time. However, sometimes it's a marketing ploy to hold an open house after a substantial price drop or if the sellers had to switch realtors for whatever reason. If the property has been on the market for a while now, the sellers may be willing to close for a lower price just to get it off their hands.

4. Are there any other offers on the house?

Know your competition. Ask the agent about any other offers the sellers may have gotten, and get all the information about the home's availability. The open house should mean the home is still unspoken for, but sometimes the sellers may receive a higher offer after many people view the property. Make sure you aren't overpaying for the real estate and check to make sure the competition is valid and that there are truly other offers.

Knowing who else is interested helps to craft your own offer and it gives you an idea of what price you can suggest. If you are already approved and your financing is taken care of, you might get away with the lower price because sellers will experience less of a waiting period.

5. Are there any hidden costs?

Ask about any other costs of ownership so that you aren't given any surprises after you close on the home. There might be association dues for planned communities or additional taxes and assessments that need to be done. Inquire about the contact info for the homeowners association to see if there's any regulations or rules that may cause future conflicts.

If there's any liens on the property it could impede the buying process. Construction or tax liens or other claims on the property might cause more problems for you after the close, so get all the facts right while you're there at open house!

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