A bargain price on a home can be enticing to an inexperienced homebuyer. That bargain house might be in the neighborhood you would like to live in, and it might be larger than some of the homes your Realtor has been showing you. And…you can’t believe how low it’s priced! You’re ready to make an offer now!
But hold on! Before you jump in to make an offer on that bargain-priced home, maybe you should think about a few things that can affect what you will have to pay in the long run.
How much repair work or updating will have to be done? Many times a home that needs a lot of repair work is priced to reflect the condition. You might end up paying much more if you have to make those repairs yourself. You don’t want to end up with a money pit!
Older homes may not be as energy efficient as newer ones, so you will want to check the utility bills for the house before making a decision. There might not be adequate insulation, or the windows may not be sealed properly. Or the HVAC system might be an older, inefficient system. If you’re not careful, the utility bills on a home can eat up any savings you thought you were getting on that bargain price!
Is the home in a flood zone? If so, you are going to be required to purchase flood insurance. Flood insurance prices on homes in flood zones can be several thousand dollars a year, whereas a home in Zone X (not a flood zone) can obtain flood insurance for just a few hundred dollars a year. Being in the wrong flood zone can cost you a bundle!
Speaking of insurance, you need to check with your insurance agent before making an offer on a house to find out what homeowners insurance will cost for that home. There are many factors that determine the cost of insurance, including the age of the home, the age of the roof, the elevation of the house, and the area. Even if you buy a house that has a great price, you might end up paying more in the long run because of the cost of insurance. Better check with your insurance agent first!
Just because the price looks good doesn’t mean it really is. You need to do some homework before you make an offer on a home. And…you can trust your Realtor to help you determine if a bargain really is a bargain!
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