5 Money-Saving Questions to Ask When Buying a House

If you’re going to buy something that takes 15 to 30 years to pay off, you’d think some deep questions would be in order. Questions like: “Is this doorknob meant to come off like that?”, or “Isn’t this price coincidentally the net worth of Uganda?” But this doesn’t happen. Nope; most property buyers are in la-la land, so ecstatic about their new home they forget the key questions:

 

Handing Over The Keys

“I give you my word as a man with nice suits.”

 

1. What is the Seller’s Financial Situation?

When a desperate seller accepts a low bid, you might get all excited. But I suggest you temper your enthusiasm with suspicion:

You might be buying over the address of someone who owes a lot of money. His creditors may not be aware he’s moved.

Sales Designer Han Hui, who recently handled some emergency renovations, related the following:

Our last client had a problem whereby the previous occupant owed some money to loan sharks.

The bad news was that he had a very nice carved door behind the gate. And his living room carpet ran up to the entrance. The loan sharks splashed paint, coffee, some kind of white paste, I don’t know what also…all over his door and it even ran under it and stained the carpet.

After he paid us $3,200 to replace everything, we were back a few days later. It turns out that although he paid off the previous group of loan sharks, his client also owed money to some people in Taiwan, who came and scratched up his door.”

 

Painter

But is it low VOC paint? We’re eco-friendly loan sharks.

 

If the seller is in debt, talk to the neighbours. They will usually know of any loan shark problems. Also, make sure the sellers have informed their creditors of the sale (Or your mailbox will be crammed with the previous owner’s bill reminders).

 

2. When Can I Collect The Keys?

It’s hilarious when people think BTO flats are like hotel rooms. Once they have the money, just pay for it and ta-daaaa, the key’s in the mail!

The rest of us are more realistic. We know that wait times for BTO flats are comparable to wait times for a cab at Orchard Road (i.e. two to three years). As such, we plan our moves far in advance. The following comes from a friend of mine, who doesn’t want to be named:

 

Construction site

Sure, you can have the keys by tomorrow. I don’t know about the flat though.

 

I am renting right now, waiting for my flat. At first the landlord tried to persuade me to sign a longer lease, to get a better rate. But I turned it down as I thought I’d be renting for at most a year.

I was ignorant of the long wait times for BTO flats. If I had known I would have signed a longer lease, and saved maybe $110 a month.”

And before buying, don’t forget to compare all the available home loan packages. If that’d take too long, try a free loan comparison site, like SmartLoans.sg.

 

3. Is There An Underground Pipe for Internet Access?

If you’re buying landed property, ask about Singtel’s underground pipe. You need this for things like OpenNet’s fiber optic Internet connection.

Unlike a condo or HDB, connecting landed property is not cost effective for service providers. Service providers might absorb the cost of connecting a whole condo, because it means getting a few hundred customers. But the cost to connect a single landed property is prohibitive, and you’re the only customer staying there.

Contact a local service provider, and find out how much a terminal point or cable box will cost. Ask if the seller will take a few hundred dollars off (a trivial amount) to cover this cost.

 

Giant pipes

“Or we can send you the DIY Internet Pipe kit for $15.99. Just get 25,000 friends to help you lay it.”

 

4. How Are The Neighbours?

You laugh at the Everitt Road saga; but wait till it happens to you.

Unlike a leaking pipe or broken window, you can’t replace bad neighbours. Nor are the police a big help; they may stop your neighbour’s 2 am Metallica tribute, but only after you wake up at 2 am to call the police. There are also certain features that tend to create bad neighbours. Ask about:

  • How cluttered the common corridor becomes on weekends
  • What the neighbours do for a living (they might keep odd hours)
  • The neighbours’ parking habits (if on landed property)
  • How the upstairs neighbours hang their laundry
  • Whether the neighbours have objectionable pets

 

These also matter if you intend to rent the property. Prospective tenants will be asking the same questions, so have your answers ready. IF you want more on being a landlord, follow us on Facebook. We have the occasional update on that.

 

Many cats in the room

The good news is, your neighbour ensures there’s never a rat problem.

 

5. How Long Has This House Been Up For Sale?

If a house has been on the market for more than six months, you should be suspicious. There are plenty of reasons why a house won’t sell; and none of them are good.

One common reason is that the seller has unrealistic expectations. If you notice a combination of high asking price and a long time on the market, don’t bother negotiating. The seller probably won’t settle on fair market value.

Other possible reasons include:

  • Poor reputation (Murder or suicide cases, or “bad Feng Shui” issues. You may not be superstitious, but your tenants or future buyers may be.)
  • Better alternatives situated within a few blocks
  • Improper alterations (e.g. contractor damaged a load bearing wall)
  • Environmental issues (e.g. mosquito or cockroach problems)

 

Run down house

I’m just saying, it’s probably not a good sign if the blueprints are in the museum.

 

If the house is an old landed property, get contractors to estimate how long restoration will take. Sometimes other buyers back out not because of price, but because renovations would take too long. If you can afford to wait, it may not a problem for you.

Image Credits:
Victor 1558, Charles & Hudson, neajjean, Ranjith Siji, star5112, williamcho, Canon_Fodder

What questions do you ask before buying? Comment and let us know!

Get more Personal Finance tips and tricks on www.MoneySmart.sg

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