Whether you’re a first-time homebuyer or a seasoned investor, purchasing a home is a challenging but rewarding undertaking. From getting approved for a mortgage to navigating open houses to closing, the entire process can get to be overwhelming at times.
It helps to have someone on your side advocating for your best interests during the home buying process. Fortunately, you can rely on real estate professionals to help guide you.
If this is your first time buying a home in Minnesota or anywhere else in the country, here are some very important questions to ask your Realtor when buying a house.
12 questions to ask your Realtor when buying a home
Even if you’re not a first-time homebuyer, you may still have a few questions you’ll want to ask your Realtor when buying a house. What’s your take on this property? What’s the sales history of this house and will it affect my offer? What are contingencies? What’s a Homeowner’s Association assessment?
If you’re working with a real estate agent to purchase a home in Minnesota, you can talk to them directly and voice out your concerns. But asking the right questions can be tough, especially if you don’t know which questions you should be asking.
Luckily, we’ve listed down some of the most important questions you should be asking your Realtor when buying a home.
- Do you see any problems with this house?
- Why is the seller selling?
- What is the sales history of this house and how would it affect my offer?
- Is the house priced fairly?
- What contingencies are worth getting and skipping?
- How’s the local real estate market?
- What should I offer to get this house?
- Should I offer earnest money?
- Are there upcoming condo or homeowners’ association assessments?
- What expenses should I expect to pay apart from what I offer for the house?
- Can you recommend a home inspector, handyman, and real estate attorney in the area?
- Would you buy this house?
If you’re a first-time homebuyer or if this is your first time looking at homes for sale in Minnesota, it’s easy to get overwhelmed by the choices on the market. You may also overlook certain details in the home that may be problematic later on.
Fortunately, your real estate agent is there to help you spot potential problems with the home, from leaking water heaters to unfinished basements. It’s important to ask your Realtor this question during a home viewing or open house so you can avoid costly problems or work on a solution beforehand.
This is one of the first few questions you should be asking not just your real estate agent, but also the seller if it’s possible. There can be many reasons why a home is up for sale. The seller could be moving to a new place or the home can just be too expensive to maintain. If, for example, the seller is moving to a new place and is rushing to sell the house, you can work with your agent to see if it’s possible to purchase the home for a lower price.
Knowing a home’s sales history can help you come up with an offer. Was the home leased? Was it an expired lease or was it a bank-owned property? The answers to these questions can indicate that the seller may have had a difficult time selling the home and that you could purchase this property for a great price.
On the other hand, if the home had always been sold within a matter of days, then you should come up with a strong offer fast.
Another important question to ask your Realtor when buying a home is if the other properties for sale in the area are going for the same price. Your real estate agent should be well versed in competitive market research so they can give you a fair estimate of the home prices in the same neighborhood.
Homes with major upgrades such as granite countertops and state-of-the-art appliances will definitely be priced a bit higher than the competition. But a home without major upgrades or extra space that’s priced higher than any other homes in the neighborhood can be considered a red flag.
When the seller accepts the buyer’s offer for their property, both parties must sign a legal and binding contract that requires them to see the transaction through.
Contingencies and concessions are built into the real estate contract to protect the seller or buyer in specific situations. Concessions are contract clauses that require the seller to help with the costs of the sale, particularly, the closing costs. Contingencies, on the other hand, are contract clauses that allow the buyer to back out after signing the contract if a condition is not met. These conditions may include but are not limited to passing the home inspection or if the buyer qualifies for a mortgage.
While it’s important to include contingencies and concessions in the contract, too many contingencies can discourage the seller. That’s why you’ll need to ask your real estate agent about which contingencies you can include or can leave out.
Great real estate agents should be up-to-date about the real estate market in the communities where they do business. So if you’re buying a house in Minnesota, it’s good practice to ask your real estate agent about the current status of the real estate market there.
Are the home prices in the vicinity rising or falling? What’s the resale value of the homes in the neighborhood? Are there any new amenities being built in the area? How many homes are being sold in the area monthly? How much are the homes being sold for? These are just a few questions that can help you figure out the situation to help you make a more informed decision.
If a home checks all your boxes, you may want to make an offer. Before anything else, you should work with your real estate agent to determine the exact amount you should offer for the property. If the local housing market is a buyer’s market, you can make an offer that’s lower than the asking price and still have a good chance of getting the property.
However, if you’re in a seller’s market, you’ll need to offer at or above the asking price. In case of a bidding war, it may be in your best interest to offer a bit above the asking price, but you have to consider your budget as well.
Before you ask this question to your real estate agent, you need to know what earnest money is. Earnest money acts as a deposit, which indicates how serious the buyer is about purchasing the property. Giving earnest money may be unnecessary in some cases, but in a seller’s market, you can use it to strengthen your offer. Just ask your real estate agent if it’s common to offer earnest money in the area and how much should the amount be.
If you’re looking to buy a condo or a single-family home with a homeowner’s association (HOA), you’ll need to know about the local HOA rules and regulations. It’s important to go over these documents because they contain important information such as conditions, reserve funds, covenants, and restrictions. You can also request these documents from your real estate agent or by contacting the association directly.
Some HOA documents can be a hundred pages long, making them difficult to read. Ordinary buyers who don’t know what to look for in the document can overlook important information like HOA assessments. These assessments are periodic, one-time payments made to the HOA on top of the monthly fee that covers repairs or major developments. As such, HOA assessments can be a hefty expense if you’re unprepared for it.
This is one of the most important questions to ask your Realtor when buying a home. Aside from the down payment, you also have to pay for other fees and services throughout the real estate transaction.
The most important of which are the closing costs, which are approximately 2-5% of the closing price. Fortunately, your lender can give you a better estimate of that cost. Also, you can ask your real estate agent if the seller can shoulder part of the closing costs or if that’s common practice in the area.
When it comes to expenses, you also have to consider your mortgage, property taxes, homeowner and mortgage insurances, HOA fees, home inspection, utilities, moving expenses, renovations, and new appliances or furniture. Your agent can give you a more detailed list and a ballpark figure so you can better prepare for these costs and not be blindsided after you’ve signed the contract.
Experienced real estate agents are well connected. They can point you to other local real estate professionals and have access to a network of professionals you will need as you go through the buying process.
Whether you need a home inspector, handyman, real estate attorney, or movers, you can ask your real estate agent for recommendations.
Asking your real estate agent whether they would buy this house given the opportunity is an important indicator if a property is worth buying. If your agent has any doubts about a particular home, you may consider that as a red flag. If your agent has reservations, ask them about it. Their answer to this question may help you dodge a potential problem.
Overview of the Minnesota real estate market
True to its name as the “Land of 10,000 Lakes,” Minnesota has the most lakes than any other state in the US. There are also a lot of outdoor activities you can enjoy, such as hiking, camping, fishing, and winter activities. There are also six national parks in Minnesota, two of which are in the twin cities area.
So why buy a home in Minnesota? Because of its unique location and many fun attractions, the state economy and housing market continue to stand strong. As of 2020, Minnesota has 5,706,494 residents, which is up by 7.6% since 2010, according to the US Census. In the same year, 69.2% of the population 16 years old and up were part of the civilian labor force. Some of the major industries in Minnesota include utilities, manufacturing, health care, and retail.
The most populated counties in Minnesota include Hennepin, Ramsey, Dakota, Anoka, and Washington. The median value of owner-occupied housing units in Minnesota is $235,700, according to the 2020 census. Meanwhile, the median gross rent is $1,010 for the same year.
What does a real estate agent actually do?
Simply put, a real estate agent is a professional who arranges and conducts real estate transactions and represents buyers and sellers in negotiations. They act as mediators between the buyers and sellers and convey offers, counteroffers, and questions between the principal parties. They also advocate for their client’s best interests in any transaction.
Real estate agents also connect their clients to other professionals who are vital in other parts of the real estate transaction, such as inspectors, real estate lawyers, and handymen. They’re typically compensated through commissions or a portion of the property’s purchase price.
Real estate agents can specialize in a number of sub-fields and perform different duties according to their designation. Real estate agents can be classified according to their affiliation, specialties, and clients. Here are brief descriptions of each type of real estate agent:
Types of real estate agents according to clients
Listing agents represent clients who wish to sell their properties. They perform various tasks such as pricing homes based on competitive market analysis, advertising listings, designing marketing plans, giving staging tips to increase a property’s value, arranging showings and open houses, and negotiating with buyers’ agents in real estate transactions.
Buyer’s agents represent the buyer in real estate transactions. They help their clients find homes, negotiate offers, and cooperate with listing agents on various transactions.
A dual agent is an agent or an agency that represents both the buyer and seller in a real estate transaction. Dual agents can represent a conflict of interest, that’s why they’re illegal in eight states: Alaska, Colorado, Florida, Kansas, Maryland, Texas, Vermont, and Wyoming.
It’s good to note that even if a dual agency is legal within your state, it doesn’t necessarily mean that it’s beneficial for you as a buyer. It’s important to know your relationship with the agent or agency you’re working with from the start to avoid confusion.
Types of real estate agents according to their level of profession
Real estate agent
As mentioned above, a real estate agent is someone who represents buyers and sellers in real estate transactions. They help gather market data, manage legal documents, negotiate deals, and facilitate discussions about ongoing transactions.
Many people use the terms real estate agent and Realtor interchangeably. Realtors are similar to real estate agents in that they both deal with real estate transactions. However, Realtors are licensed professionals who are members of the National Association of Realtors (NAR) and must comply with a Code of Ethics and Standards of Practice.
Real estate broker
If a real estate agent or Realtor wishes to take the next step in their careers, they can train and pass an exam to be a real estate broker. Real estate brokers manage other sales agents and operate their own brokerages. They’re held to a higher standard than real estate agents and receive a portion of an agent’s commission as compensation.
Types of real estate agents according to their specialties
Real estate agents typically begin their careers as generalists and may decide to focus on a particular niche or specialty later on. Below are some of the designations and certifications a Realtor can apply to specialize in a particular field, accordion to the NAR:
Certified Residential Specialist
According to the NAR website, this is the highest credential awarded to residential real estate professionals. Professionals with this designation can earn up to triple their earnings, gross sales, and the number of their transactions.
NAR’s Green Designation
This program helps agents gain a competitive edge when marketing green homes. This program gives professionals information on how to market green properties. They’re also given resources on green issues, research, and how energy-efficient homes affect real estate.
Seniors Real Estate Specialist
This designation is for agents who want to sell homes in age-restricted communities. They assist older clients on how to prepare for life-changing decisions and issues such as pensions, retirements, and loan fraud.
At Home with Diversity
This certification gives agents the tools to develop their practice in an increasingly multicultural real estate market. They are also given training on diversity, sensitivity, and US Fair Housing Laws.
Luxury Homes Certification
This certification is for agents who want to adapt to a dynamic and evolving luxury home market. This certification covers pricing strategies, negotiation tactics, and how to stand out above other professionals.
Military Relocation Professional
Agents who want to work with military professionals can get this certification. They’re given training on VA financing and other processes involved in military relocation.
Resort and Second-Home Property Specialist
Those who are interested in representing clients looking to purchase or sell second homes and resort properties can get this certification. Potential clients may include retirees, vacationers, managers, and investors.
Why you should work with an experienced Minnesota Realtor
Working with an experienced real estate agent takes the guesswork out of purchasing your first home or investment property. When looking for a real estate agent, go with someone who has a proven track record of success, an excellent network, stellar sales performance, and is involved in the local community.
If you’re looking to buy a home in Minnesota, our team at Helgeson Platzke Real Estate group can help. We are one of the best Realtors in Minnesota, providing real estate services to the Twin City Metropolitan area since 1983. We have sold over 7,400 homes and specialize in luxury, gated communities, and single-family homes in Eden Prairie, Edina, Chanhassen, and other locations.