We are buying our first home together and are so nervous! What question should we ask about the house once we find it? Thanks!
Nina and Trey, Corona del Mar
I love working with first-time home buyers. It reminds me of the first home we bought when we were first married. I’d lie awake at night thinking about everything I needed to ask. Here’s my pro-tip: Well meaning friends and family will be eager to chime in and offer advice based on their past experiences. However, in California, the average homeowner purchases a home every 13.2 years. A lot can change in that time period, so take your friends’ and family’s advice with a big grain of salt and lean on the experts to guide you through the process! Below are some of the most important questions to ask your agent and lender:
- What will my monthly costs be? (Ask about principal and interest payments, mortgage insurance, HOA costs, property taxes, Mello Roos bonds, homeowners insurance,
- What is included in the sale? (All appliances? Washer/Dryer? Window treatments? Sound system, televisions and brackets?) Get it all in writing on the contract or in an addendum.
- What are the sale prices of similar homes in the last 3-6 months?
- What are the monthly utility costs?
- Ask your agent if they are familiar with the neighborhood. Visit the home at different times during the day to check out parking issues, noise, neighbors, etc.
- Get physical and termite inspections so you know as much as possible about the conditions and features of the house.
- Read the Natural Hazard Disclosure Report, Seller Property Questionnaire and Transfer Disclosure Statement carefully.
I was talking to a lender to see how much we can afford and he kept talking about my DTI. I had no idea what he was talking about but it seems like it affects the rate I’m going to get. What the heck is it? I was too embarrassed to ask!From Clueless in Costa Mesa
Hello Friend- (I refuse to call you Clueless!)
This is a great question and an important learning moment for your lender! I always coach my agents not to use acronyms. As agents and lenders, we “talk” real estate terms every day of the year. As professionals, we need to remember that the consumer deals with real estate once a decade or longer! DTI is your debt-to-income ratio. It compares how much you owe each month to how much you earn. Specifically, it's the percentage of your gross monthly income (before taxes) that goes towards payments for rent, mortgage, credit cards, or other debt. If you have a high DTI, it may be difficult to get a loan or one at a competitive rate. When you’re thinking of buying a home, avoid making large purchases, ensure your bills are paid on time and in full for several months prior to making an offer. Think of it as training for a race. You need to get your credit and financial picture in tip top shape!
Katie Machoskie is a real estate agent and team lead of Machoskie & Associates at COMPASS in Orange County. She has sold over $1 billion in sales. In 2022, she and her team of neighborhood specialists had over $172 million transactions. She is the OC representative of The Private Client Network and REALM representing a network of over 200 agents nationwide to help you find your way home no matter where that is!