Questions to ask your realtor?

Question

Hi all

Newbie here! My realtor is constantly sending me deals and I have analyzed a bunch. I have found one that peaked my interest with good cash flow and ROI ratio but before i make the offer i wanted to ask the important questions. i have asked so far the below but wondering what am i missing. can you help?

- last time roof, heater and ac units were updated

- insurance cost

-neighborhood vacancy rate

Michael Robbins · Answer

If the home is located in an HOA I would verify the HOA fees and their financial health. For example, you close on the deal and the HOA fees go from $200 to $300 a month because they need to increase their reserves. Another example is the HOA needing to do roadwork and everyone gets a special assessment of $175 a month for six months. It is important to go over the hoa resale package carefully.

I would also look into any construction defects. You might start by asking your Realtor to pull the building permit history of the property.

I would also look into any construction defects.  You might start by asking your Realtor to pull the building permit history of the property.

Elizabeth Gomez · Answer

thank you so much for the prompt response Bob! now i know what to look for!

i have seen a lot of deals around my area close below the asking price. Do you think we are shifting from a sellers market to a buyers market with the whole covid crisis?

this will help me know offer range just based on market conditions.

Bob Okenwa · Answer

@Elizabeth Gomez

I understand your concern about the roof and such. If there is not a property disclosure form included in the MLS documents, then you can have your realtor look into obtaining such information on your behalf by contacting the listing agent and asking.

In terms of your offer, get as much information as you can upfront by walking the property and looking for problems. Then put in an offer based on what you know at that time. If the offer is accepted, you'll have time for an inspection. Based on the inspectors' findings, you can ask the seller to remedy certain or all material defects, lower the price so you can remedy the defects, move forward with the property as-is, or walk away from the deal and get your earnest money back.

As @Michael Robbins suggested, pulling permits is also a very good idea.

Marlen Weber · Answer

@Bob Okenwa you're spot on on these questions/things to consider.

Bob Okenwa · Answer

1. The condition of the roof, heater, HVAC, and other associated items should be reviewed during an inspection, but can also be included in a property disclosure. I don't know where you live or what rules you have for real estate, but in AZ, we have a document called the SPDS (we call it spuds) that stands for Seller Property Disclosure Statement. It means the seller must disclose material facts about the property and such repairs would be included in the SPDS if they were ever done to the home.

2. Insurance cost is something you'd have to find on your own as your realtor isn't an insurance agent. The seller doesn't have to disclose how much they pay for insurance. You can call companies for quotes or go online and do so.

3. Your agent isn't a property manager either. You can call property managers that work in the area and get an idea about vacancies for a particular area/neighborhood.

You can ask your agent about DOM, urgency of the seller to move on from the property, how low is the seller willing to sell at, how many other offers there are, and so on.

Elizabeth Gomez · Answer

Great input and yes i did ask that and she belongs to a company where they managed over 100 units. Also works with out of state inventory (I actually found her here in BP)

Will Gaston · Answer

@Elizabeth Gomez

"Have you ever owned or managed an investment property?"

Based on my experience I would thoughtfully reconsider whether or not to work with him/her if the answer is "no."

Elizabeth Gomez · Answer

Bob

thank you so much of the reply. I do have some follow up questions i wonder if you can help me with those:

i live in FL, when you say that the AC and HVAC condition should be reviewed during the inspection, doesn't the inspection come after the offer? how do i know how much i want to offer if i dont know about the roof etc.

Questions to ask your realtor?

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