Ten Questions To Ask Real Estate Agents BEFORE You Buy! | Property Negotiating & Due-Diligence Tips

Summary

In this informative video, Julian from RI house shares a strategic approach to purchasing property, emphasizing the importance of asking the right questions to gather crucial information. He outlines 10 key inquiries, such as the property's availability, market duration, age, occupancy status, rental appraisal, tenant track record, property presentation, seller motivations, timeframe for sale, and potential maintenance issues. Julian advises verifying agent responses and factoring in all costs for a comprehensive understanding before making an offer.

Takeaways

• 🏠 Confirm the property's availability, as some listings may be bait to showcase the agent's skills.
• 📅 Ask when the property hit the market to gauge its desirability and the agent's honesty.
• 📐 Inquire about the property's age to assist in making informed decisions regarding ROI and depreciation.
• 🔒 Determine if the property is rented or owner-occupied to understand potential settlement periods and tenant history.
• 💰 Request the rental appraisal and verify its accuracy, as agents may not always have precise information.
• 👨‍💼 Assess the tenant's track record, including payment history and property upkeep.
• 🛋️ Evaluate the property's presentation and whether the current tenant could be a selling point.
• 💭 Understand the seller's motivations, as seller distress or urgent need for cash can influence negotiations.
• 🕒 Be aware of any timeframe for the sale and the urgency behind it, especially in a competitive market.
• 🏗️ Investigate the property's condition, including structural issues and required maintenance.
• 📍 Consider the street's location and potential noise or neighbor issues that could affect the property's appeal.

Q & A

Why is it important to confirm if a property is still available?

It is crucial to verify a property's availability because some listings are used as marketing bait to showcase an agent's sales capabilities, rather than actual opportunities for purchase. Properties may sell quickly, within 24 to 48 hours, making it essential to ensure that the opportunity is still viable.

What does the market duration of a property reveal about its listing and potential issues?

The length of time a property has been on the market can indicate its desirability and the accuracy of the agent's information. If a property has been listed for longer than reported, it may suggest that the agent's claims about its recent listing or popularity should be taken with a grain of salt.

How can knowing the age of a property influence your purchasing decision?

The age of a property is significant as it can affect depreciation calculations, which in turn impact return on investment (ROI) considerations. It can also inform decisions about potential rental returns, both pre- and post-tax, and whether there is remaining depreciation to factor into the investment strategy.

What are the implications of a property being rented or owner-occupied?

The occupancy status of a property (rented or owner-occupied) shapes the direction of subsequent inquiries. Owner-occupied properties might have different settlement periods, while rented properties require understanding the rental appraisal and the tenant's track record, including payment history and property maintenance.

Why is it necessary to verify the rental appraisal provided by the selling agent?

It is important to verify the rental appraisal because selling agents may not always have accurate information about a property's rental value, especially if they do not manage the property. Inaccurate appraisals can lead to overestimation or underestimation of rental income, affecting the investment analysis.

What should you consider when evaluating a tenant's track record?

When assessing a tenant's track record, consider their punctuality in rent payments and their overall care for the property. This information is valuable as a good tenant can be a selling point, and their potential to remain can influence decisions on rent adjustments or property maintenance post-purchase.

How can understanding the seller's motivation impact the purchasing process?

Knowing the seller's motivation for selling can reveal potential seller distress or urgent need for cash, which may affect the required deposit amount and the flexibility in negotiation. Understanding these motivations can help structure an offer that aligns with the seller's needs.

What does the timeframe for sale indicate about the urgency of the purchase?

The timeframe for sale indicates how quickly the seller wants to close the deal. This urgency can affect the buyer's strategy, potentially allowing for a quicker purchase or necessitating a more deliberate approach, especially in a multi-offer situation.

Why is it important to inquire about the property's condition in detail?

Detailed inquiries about the property's condition are essential to uncover any potential maintenance issues or structural problems. This information is critical for budgeting repair costs and understanding the immediate and preventative maintenance needs post-purchase.

How can street location and neighborhood factors influence your property decision?

The street location and neighborhood can significantly impact the property's desirability and future value. Factors like noise complaints, proximity to public housing, or neighborhood disturbances can affect the quality of life for potential tenants or owners, making it important to consider these aspects in the purchasing decision.

What is the purpose of asking for the property's purchase price under expedited conditions?

Asking for the property's purchase price under expedited conditions helps to gauge the agent's confidence in the property's market value and the seller's willingness to sell quickly. It also allows the buyer to understand if their proposed offer is competitive in the current market, potentially leading to a faster purchase process.