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You’ve likely heard that the most important aspect of real estate is “location, location, location.” If that’s true, then the second most important consideration may be size or square footage.

At its most basic, square footage tells you the size of a property. It can also determine whether you’ll be able to squeeze a king-size bed plus your home office into the primary bedroom or your beloved baby grand piano in the family room.

Square footage also plays a major role in how a home that is for sale is priced. Getting square footage wrong when you are buying or selling can be a big headache and an expensive mistake. For instance, you don’t want to pay too much for a home that’s smaller than you thought it was.

Here, you’ll learn more about how square footage is correctly calculated.

Why Measure Square Footage of a House?

Here are some reasons why you may need to know the square footage of a house:

•   When selling a house, square footage plays a big role in determining the asking price.

Real estate agents will look at comps in the neighborhood — houses of similar size and style — that have sold recently to help them gauge demand for this new listing and set a price.

Square footage isn’t the only factor in pricing a home. An agent will also look at things like condition and building materials when determining value.

•   For those who are buying a home, square footage will play a big part in the price. It’s important that buyers verify that the listed square footage is correct so they know they are getting the space they’re paying for.

When you’re securing a mortgage loan, the lender will need to verify square footage as well, to make sure the house is worth the price the buyer and seller have settled on.

Lenders send an appraiser to conduct a real estate appraisal. This looks at the house to spot anything else that will adversely affect the value of the home, such as cracked walls, leaky foundations, and roofs that need repair.

If a lender’s appraiser finds discrepancies in square footage, there may be issues with a mortgage going through. Lenders may be unwilling to underwrite a loan for a house they think is overvalued for its size.

To save time, buyers should consider doing their due diligence and measure square footage before putting in an offer. Because the size of a house helps determine its value, it also influences property tax assessments.

•   You may also need to know the square footage if you want to dispute a high tax assessment or apply for permits to add on to your house.

Homeowners who think their property is overvalued for tax purposes can dispute the assessment. Confirming square footage is a good place to start. If a home is actually smaller than the recorded size, that may put a homeowner in a favorable position to have their property taxes reduced.

There are a number of reasons the assessed size of your home could be off. Assessors may have used an estimate for their initial assessment, builders may have made a calculation error when they were filing for building permits, or a portion of the house in the initial plans may never have been finished.

If you think the square footage in the public record isn’t correct, contact your city’s assessment department and ask for a review. The city may ask you to file an appeal or a grievance.

Finally, if you’re planning on hiring someone to remodel your home or put on an addition, you may need to know your square footage in order to pull a building permit for the work you want to do.

💡 Quick Tip: Mortgage loans are available with flexible term options and down payments as low as 3%.*

How to Measure Square Footage

There are no hard and fast rules about what parts of your house should be included in a square footage measurement.

The American National Standards Institute provides the generally accepted guidelines about how to calculate square footage, but there are no laws governing the issue, and standards may vary by region or even by listing agent. These discrepancies are another good reason to double-check square footage yourself.

That said, the gross living area is what most people mean when they discuss square footage. Here’s an easy way to calculate it yourself.

•   First, get prepared to brush off your drawing skills, and bust out a pen and paper — preferably graph paper. Each square of the graph paper can represent one square foot.

•   Next, moving one room at a time, measure the walls with a tape measure or laser measure, rounding to the nearest half-linear foot. As you measure each wall, draw it out on your paper and write the measurement next to the line.

•   For regular rectangular rooms, you will be able to calculate the square footage by multiplying the length of the room by its width.

•   If the room you are measuring is an irregular shape, break it down into small rectangles, triangles, or other shapes and measure those separately. Add up the square footage of these small areas to get the room total.

•   Add on to your floor plan room by room, and don’t forget to include hallways and closet spaces that may be between rooms. Stairways are also usually counted in gross living area.

•   Do this for every floor of the house, and once you have a complete floor plan, tally the square footage of all the rooms in the house to get total square footage. Round the result to the nearest square foot.

•   If you have a two-story house, you may be tempted to simply measure the square footage of one floor and multiply that by two. The danger with this approach is that not every floor will have the same footage.

For example, if you have any double-height rooms, you can’t count that square footage as part of the second floor.

Note: ANSI guidelines measure square footage from the exterior of the house. This method does not subtract interior walls from the square footage, so it may not give a completely accurate sense of a home’s living space.

Recommended: Things to Budget for After Buying a House

What to Leave Out

Living space that is above the land line and has heating, lighting, and ventilation is included in the gross living area. Garage space does not make the cut. In general, neither do basements, even if they’re finished (although appraisers will include the space in their appraisal valuation).

A good rule of thumb is that anything that is built below grade, i.e. underground, does not count toward gross living area. Other buildings, including guesthouses and pool houses, that require you to go outside to them can’t be included in the gross living area either.

Finished attic space may be included in the gross living area as long as it has enough clearance — generally a ceiling of at least seven feet. Enclosed porches can be included if they are heated by the same unit that heats the rest of the house.

That said, it can be helpful to measure the square footage of these areas for your records, and they can be included separately in a sales listing

💡 Recommended: First-Time Homeowner Guide

Other Considerations Before Buying

If you’re in the market for a new home, the first thing you can do to verify square footage is take a look at the city’s building department records.

When homes or condominiums are built, plans submitted for a building permit include square footage.

Many of these records are available online and provide a way to check whether the listed square footage is at least in the ballpark of city records.

Note that houses that have unpermitted additions will not have that extra space show up in official records.

In fact, add-ons built without going through the proper city channels can add uncertainty to the real estate process, and may not even be included in the gross living area advertised in a real estate listing. And appraisers may not include these additions in the value of the home.

If it’s hard for you to get information on the home you’re interested in from the city and you don’t have the opportunity to measure the home yourself, you can hire an appraiser who can do the measuring for you.

Real estate agents also have a lot of experience determining the square footage of houses. They can give a quick estimate of size or help you measure the square footage more carefully.

There is a lot to think about when buying a house, and square footage is just one factor. There are other things to consider when buying a home.

Would you prefer a smaller house in tip-top condition or a larger one that needs some TLC? Do you like the design and layout or would you be looking at major renovation work to have it be your dream home? Is the location right? Is it near schools, your work, businesses you like to go to, or parks? Is it in your price range?

Recommended: Housing Market Trends by Location

Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.

SoFi Mortgages: simple, smart, and so affordable.

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*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility for more information.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

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Having a list of what you want in your dream house makes house hunting fun and exciting. But to be a smart homebuyer and get the most for your money, it’s important to focus on some of the more mundane, nuts-and-bolts aspects of a house as you tour.

That way, you won’t overlook flaws that will potentially be pricey to fix. While home inspections play an important role in making sure you don’t buy a money pit, you can do a bit of detective work yourself. Follow this guidance on what to look for when buying a house.

1. The Exterior

While you’re focusing on where you might put a basketball hoop or admiring the property’s beautiful trees, you’d be wise to take a look at these things to consider when buying a house as well.

Roof Damage

Your roof protects you and your possessions from sun, rain, and snow. And roof damage can quickly turn homeownership dreams into a pricey nightmare. To put a price tag on it, a new roof can run $10,000.

Check for obviously cracked or missing shingles. Look for signs of water damage on the ceilings inside, indicating that the roof isn’t keeping rain out. Later, since the roof is hard to see from the ground, you may want to have your home inspection professional take a closer look. You might also invest in a pro roof evaluation to determine how many years the roof has before it needs to be replaced.

You can also avoid future problems by eyeballing the gutters. Are there telltale depressions, muddy spots, or rust stains outside the house which might indicate gutters are leaking?

Siding Issues

Be on the lookout for cracked or warped siding, or for blisters or bubbles that have formed underneath, which can indicate hidden water damage. Siding’s job is to prevent water from entering the house, so water stains on the inside could also signal siding issues.

Bad Foundation

Obvious cracks in the foundation or exterior walls are a warning sign, but pay attention when you step inside the house as well. Signs a foundation might be faulty include: floors that slope, crack, or sink; cabinets that are pulled away from the wall; interior cracks; and doors that stick.

Yard Problems

Most yard issues can be fixed with a little landscaping muscle, but drainage issues can be more costly to resolve. Look for standing water or soggy, low-lying areas in the yard, signs that the space has drainage problems that can compromise the foundation or cause mosquitoes to invade.

💡 Quick Tip: With SoFi, it takes just minutes to view your rate for a home loan online.

2. The HVAC

You’ll want to find out how the home is heated and cooled, and if possible, learn as much as you can about the annual or monthly cost. Then look for these red flags.

Damaged A/C Unit or Furnace

When touring with your real estate agent, ask the agent to turn on the heating and air conditioning system. Listen for any loud noises. Watch for water around the unit itself, a sign of possible drain line or refrigerant problems.

Broken Thermostat

Locate the thermostat and confirm that it appears to be receiving power. If the heat or air cycles on and off in brief cycles while you are touring the home, there may be a thermostat or power issue.

3. The Plumbing

Problems related to water are one of the most important things to look for when buying a house. Be aware of these issues:

Strong Smells (Good or Bad)

As you walk through a potential home, give it a good sniff. Your nose might know if mold or a damp basement is present. If you notice air fresheners or potpourri, don’t assume the homeowner is just a big fan of floral scents. Scents could be a sign that a plumbing issue, water drainage problem, or basement leak will siphon away a lot of your hard-earned cash. Buying a house out of state? Ask your real estate agent to sniff around for you, but plan on visiting in person once you have narrowed the field.

Recommended: Housing Market Trends By Location

Water Spots and Stains

Look at the ceilings and walls, especially those adjacent to bathrooms, for hints of water seeping in. Do you smell fresh paint? It might be covering up mildew. Ask the seller’s real estate agent if any new color is covering up any old mold or possibly water-damaged walls or ceilings.

Rusty or Corroded Pipes

Poke around the basement as well as under and behind bathroom and kitchen fixtures. Look for rust stains in sink basins, or blue stains under pipes, which may be a sign of corrosion.

Low Water Pressure

Ask the real estate agent if you can run the water in the kitchen and bathrooms, then run the sink and shower simultaneously. You’re doing an informal check for low water pressure. If the water is coming from a well on the property, taste it. While unpleasant flavor or odor in well water isn’t always a sign of problems, you’ll want to be aware of it before buying, and you’ll also want to have well water tested for contaminants by a professional during a home inspection. Most well water issues can be fixed, but it would be important to factor the costs into any offer you might make.

Slow Drainage

While the water is running, check that it is also draining properly.

Recommended: What Are the Most Common Home Repair Costs?

4. The Electrical System

Particularly in an older home, you’ll want to have the electrical system evaluated as part of the home inspection. Here are some things you can look for before that stage.

Small Electrical Panel

Ask the real estate agent to show you the panel where the electrical service comes into the home. There is usually a number on it to indicate the number of amps the home has. (Ask the agent if you don’t see it.) An older single-family home, especially, may not have adequate service. To power a small home without electric heating, 100 amps could be sufficient. But 200 amps is the standard for newer homes and updated ones. And even that may not be enough power for an electric heating system, depending on the size of the house. If you plan to add electric heat, a home workshop, or do an addition, you’ll probably need 300-amp service. The cost to upgrade the panel can range from $1,300 to $3,000.

While you are at the panel, look for signs of rust or rodents. Are circuit breakers corroded? If you see visible wiring, is it free from cracks or other damage?

Inadequate Outlets

Outlets in the kitchen or bath that are likely to be exposed to water should be ground fault circuit interrupter (GFCI) protected. (Look for “test” and “reset” buttons in the middle of the outlet.) Plugs that sit loosely in an outlet may indicate the outlets are old. Look for outlets with power strips or splitters plugged in, or with many electrical appliances crowded around them — all signs that the home doesn’t have adequate outlets for modern life.

5. The Functionality

Knowing whether a home would need costly upgrades, especially to the kitchen or baths, is important to your overall budget. If you’re in a hot real estate market and are likely to get into a bidding war, nailing down potential extra costs before you get into negotiations will be especially important.

Number of Bedrooms

Make sure the home has adequate sleeping space for your present needs, and don’t forget to think about the future (are kids in the plan?) as well as the occasional guest when you’re buying a house.

Kitchen Conditions

Kitchens are a big-ticket item, so survey the design and functionality of the kitchen, eyeballing the appliances and cabinetry especially. A major renovation, with new appliances, cabinets, and countertops, can run $14,000 to $40,000, according to home-improvement site Angi. To keep kitchen remodeling costs down, evaluate if the bones of a kitchen are good. Is there enough countertop space to do meal prep? Could you repaint or refinish the cabinets rather than rip them out?

Bathroom Basics

One homebuyer’s cute retro tile and toilet is another’s remodeling nightmare. And adding a bathroom or moving plumbing lines can get time-consuming and expensive. So check to see if the home has the right number of baths and think about how much work, if any, they might need to suit your style.

Whether your taste trends to luxurious rainfall showers or you’re happy with fixtures from the local home center, it’s unlikely to be a low-budget endeavor to redo a bathroom that’s dated or worn. The average bath remodel can cost approximately $11,000 before special fixtures or features.

The price tag heads farther north if you are planning to add a bath. Moving plumbing lines around a structure can get quite time-consuming and expensive. You’ll need permits, and ratcheting up the number of baths can also send your property taxes soaring. Home-improvement shows may make bathroom remodels and additions seem like no big deal, but it could actually wind up being a major endeavor.

Stairs

You probably already know whether a relaxed, one-floor ranch or a tall townhouse suits your style. But while you are touring a home, think about the number of stairs and how you might use the space in the house as you live there. Are the washer and dryer two flights down from the bedrooms, where most of the laundry originates? Is the main bedroom a flight below what would be the baby’s room?

Hardwood or Carpet?

You might tour a home that is fully carpeted and picture in your mind’s eye the gleaming hardwood floors you would reveal in a renovation. Don’t assume that hardwood hides under all carpets. Homes built in the 1950s and after may have carpet over plywood. Ask the real estate agent what is underneath the carpeting.

💡 Quick Tip: Not to be confused with prequalification, preapproval involves a longer application, documentation, and hard credit pulls. Ideally, you want to keep your applications for preapproval to within the same 14- to 45-day period, since many hard credit pulls outside the given time period can adversely affect your credit score, which in turn affects the mortgage terms you’ll be offered.

6. The Aesthetic

Creating your homebuying wish list can help you zero in on the things that are important to you in a new home.

Views

There are as many ideal vistas as there are homebuyers, but as you look at a home’s views, think about the seasons. If trees lose their leaves, will the neighbor’s messy backyard be front and center? Especially in urban areas, think about who owns adjoining properties, what might be built there in the future, and how that could affect the view.

Natural Light

Take note of a home’s windows, and especially whether natural light is abundant in the rooms where you will spend the most time. You might love lots of natural light, but in the summer, it can mean high air-conditioning costs. Take window coverings into consideration in your budget.

Water Access

A water view or water access might be a priority for you. Normally, water views are a good thing — picturesque and calming. But in this era of “crazy weather,” a tranquil bay or babbling creek could soon swamp your home. According to a report by the National Oceanic and Atmospheric Administration, rising sea levels are accelerating instances of flooding.

So before you feel as if you’ve got to have a home that’s near a body of water, do your due diligence. Check the home’s flood factor; also find out if your lender would require flood insurance (which typically costs $700 a year but can go much higher) in addition to homeowners insurance before approving a loan.

Recommended: How Much of a House Can I Afford?

Noise

You’ll want to listen as well as look when you tour a property. Can you hear the sound of cars on the nearby road? How heavy is the traffic? Is the house near a train track or an airport, which could mean low-flying planes? In an urban setting, who are your neighbors? A bar or concert venue could mean late-night noise.

Essential Questions to Ask When Buying a House

Most real estate agents will offer some basic information about a house right upfront. By law, they are required to disclose the possible presence of lead hazards if a residence was built prior to 1978; some states also require disclosure of asbestos. Ask these questions to dig a little deeper. If there are already multiple offers on a house, you’ll want to choose priorities from this list — asking too many questions could work against you if you decide to throw your hat in the ring.

•   How old is the heating and air-conditioning system?

•   When was the water heater last replaced?

•   How old is the roof?

•   If there is a septic system, when was the tank last replaced or inspected?

•   What is the water source? Does the home have city water or rely on a well?

•   Does the home have any history of flooding or mold?

•   Is the seller aware of any materials containing asbestos on the property?

•   What comes with the house? (Sellers sometimes remove fixtures, appliances, sheds, or play equipment so don’t rely on things being left behind.)

•   Has the owner made any major improvements in the home since the last property tax assessment? (This could result in a tax hike on the next assessment.)

•   What do you know about the neighbors?

•   Are there any easements on the property? (For example, if power lines cross the property the local electrical supplier may have an easement which allows them to prune or remove trees.)

•   Is there a homeowners association? If so, what are the annual fees?

•   When touring a co-op or condominium, ask whether there are any special assessments currently in place or being discussed.

Becoming a Homeowner

Whether you’re a first-time homebuyer or a home-buying pro, you’ll want to be careful and comprehensive when buying a house. Keeping your eye out for potential problems can save you from falling in love with the wrong house.

Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.

SoFi Mortgages: simple, smart, and so affordable.

FAQ

What are the five most important things to look for in a new home?

Make sure the home’s size, floor plan, and general aesthetic suit your lifestyle and budget. Then consider the amount of work a home might need and whether there are big-ticket needs such as a bad roof or foundation, or a kitchen or bathroom that require remodeling. Factor these into your overall budget.

What should you look for in an initial walk-through of a new home?

Don’t just look at a home: Use all your senses. Listen for dripping water or traffic noises. Sniff the air — does it smell musty or moldy? Feel the floor underneath you. Does it slope or squeak? And listen to your gut as you will likely feel quickly whether a home is right for you.

What are must-haves when buying a new home?

Must-haves are unique to every buyer. For one person, a great view is essential while another may require a certain school district. The important thing is to talk about these early in your home search, and revisit the list as you begin to see properties.

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SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility for more information.

*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

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Attending an open house is a common step as you shop for your dream home. Of course, it lets you see a property (often after it’s been styled and staged to look its best), which can trigger “I love it!,” “hard pass,” and every possible reaction in between.

But an open house also gives you information beyond just the surface appeal of a home. It can give you clues to structural issues, the level of home maintenance it’s received, and how popular it is with potential buyers. That is, if you know what to look for as you walk through, rather than just admiring some great use of subway tile or a charming farmhouse sink.

Here, learn about what to expect at an open house and how to get the most out of attending one.

Benefits of Attending an Open House

At an open house, a property can be viewed by potential buyers. You can eyeball the house, the street, the neighbors’ places. You might even consider it a homebuyer’s guide to what it’s really like to live somewhere.

There are several benefits to attending an open house as you move through the steps of buying a house. These include:

•   You can hone your house-hunting skills by taking detailed notes and comparing them to past and future listings.
•   It’s a face-to-face opportunity to make a good impression on the listing agent and ask as many questions as necessary (without having to wait for a reply).
•   Sometimes listing photos simply don’t do a house justice. The in-person lighting might be brighter, the hardwood floors shinier, or the primary bedroom larger than it seemed online.
•   Similarly, strategically hidden flaws, red flags, and nuances that can only be detected in person are exposed so you (and other potential bidders) can make a truly informed decision.

Recommended: How Long Does It Take to Buy a House?

What to Expect at an Open House

Some open houses are literally open, meaning they’re posted on a real estate listing or a sign out front and members of the public are allowed to stop by.

In other cases, an open house is available only by appointment and arranged by the seller’s broker.

Typically, the sellers won’t be on the scene at an open house. It’s likely their listing agent will handle the event, guiding potential buyers around the dwelling and answering questions.

There could be other house hunters or visitors (nosy neighbors, perhaps?) attending the open house.

Most homebuyers will be provided with a booklet or pamphlet featuring details about the property, which could include the year it was built, heating and cooling information (oil vs. natural gas, etc.), the square footage, how many bedrooms and bathrooms there are, the size of the lot, types of appliances, and exterior features like decks, porches, pools, and sheds.

From there, house hunters will fill out a sign-in document that records their information for follow-up (unless this was already done in advance) and tour the property. This could occur with the listing agent in tow or by themselves, saving questions for the end.

Open House Etiquette

Figuring out what to do at an open house isn’t always intuitive, but a crisp, respectful approach can go a long way:

•   Bringing along food, drinks, pets, or unruly children could be considered disrespectful and distracting.
•   Following the house rules can be crucial, so buyers might be prepared to remove shoes, steer clear of personal property, and ask permission before snapping photos.
•   Being polite and personable to the hosting agent can put potential homebuyers in a more favorable light.
•   Maintaining a poker face can be helpful during the open house process. If homebuyers spill the beans about how much they love the property, it could make negotiations tougher if and when they make an offer.

Recommended: The Mortgage Loan Process, Explained

Things to Look For at an Open House

If you stay focused and zoom in on details, you can learn a lot during an open house. Perhaps there’s an initially inconspicuous flaw on the exterior of the house or there’s no closet in the fourth bedroom.

Things to look for when buying a house and at an open house in particular could include:

•   Visible signs of neglect or damage (more on that soon).
•   Proximity to the neighbors and whether there’s sufficient privacy. A poke around the premises can also reveal what those new neighbors are like. Do they have a half-built skate park? A forever-barking dog? A chicken coop? A forever-barking dog? A chicken coop?
•   Closet and storage space and whether it’s enough to suit your needs.
•   What other potential buyers are up to. If they’re in and out quickly or lingering in one area in particular, perhaps it’s an indication of an issue that might have otherwise gone unnoticed.

Potential Red Flags

Aside from standard considerations like the ones above, some red flags to look for at an open house could include:

•   An abundance of sweet aromas from candles or air fresheners. This could signal hard-to-fix smells (perhaps caused by mildew or another issue) lurking under the surface.
•   Unevenly spaced tiles or crooked electrical outlets, which could signify sloppy DIY renovations that might require costly repairs down the line.
•   Issues with the foundation of the house like large gaps, doors that stick, windows with visible cracks, or uneven floors.
•   Proximity to water. Checking a FEMA flood map can also help potential buyers know whether there’s the risk of flooding and if flood insurance will be required.
•   Signs of lax property maintenance, including faded or chipped paint, leaky faucets, water damage, or overgrown grass and brush. These issues could signify that the owners have neglected other vital home maintenance tasks, which could mean a buyer needs extra funds to cover home repair costs.
•   Signs of mold: small black or gray spots in bathroom closets or cabinets, on the ceiling, or around showers, tubs, and faucets.
•   Exposed pipes with visible rust or leakage.
•   Drafts around windows, doors, and electrical outlets that could be a sign of neglect and a hefty heating bill come winter.
•   Stained or warped baseboards (especially in the basement) that could indicate a prior flood. A sump pump can also indicate that flood damage has occurred in the past.
•   Cosmetic damage like stains from pets that are strategically hidden by area rugs.
•   Condensation or peeling paint around windows, which could signify ventilation problems and moisture issues.

Recommended: How to Winterize a House

Questions to Ask at an Open House

Knowing what to ask is an essential element of attending an open house; it can help you make the most of the experience.

Here are a few key questions homebuyers can ask the selling agent:

•   What year was the house built?
•   Why is it being sold?
•   How long has it been on the market, and were there any asking price fluctuations?
•   Are there any offers?
•   Are there any problems the seller can disclose about the property? These are issues that could come up in an inspection but are made transparent between the seller and buyer, e.g., health and safety hazards, structural defects, mechanical issues, previous water damage, pests, or renovations.
•   Is the property part of a homeowners association? Are there monthly fees associated with it?
•   What is the local school system like? How about the neighborhood?
•   Is the sewer system handled by the town, or does it run on a private septic tank?
•   What fixtures and appliances are part of the purchase: washer/dryer, stove, refrigerator, lighting fixtures, and window treatments?

Next Stop: Buying That Dream Home

After every question has been asked, every surface has been scoured, and every disclosure has been made, it might be time to bid and hopefully snag your new home. Another important step will then be securing a home loan.

With a SoFi Mortgage, you’ll get a competitive rate, flexible terms, and low down-payment options. Plus, our online application process is quick and easy.

SoFi Mortgages: The smart way to secure a home loan.

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SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility for more information.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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Buying a home is a major responsibility. If you’re unable to continue paying the mortgage on your house, what happens next? You’ve heard of foreclosure, which can result in losing your home and be financially damaging. But there’s another option called a deed in lieu of foreclosure, which may be less stressful than foreclosure, have less of a negative impact on a credit report, and may be faster to complete.

Here’s what you need to know about a deed in lieu of foreclosure, and when it might be an option to consider.

What Is a Deed in Lieu of Foreclosure?

Where a foreclosure may involve the court and a lengthy process, the alternative, a deed in lieu of foreclosure, is fairly simple.

If your lender agrees, you hand over the deed to them and the lender releases the lien on the property. You may be released from any balance you owed on the mortgage (however, there may be exceptions if you owe more than the home is worth).

And while a deed in lieu will appear on your credit report, it doesn’t have as severe an impact as a foreclosure.

The lender might even offer you financial assistance to spruce up the home to make it more sellable.

Recommended: Tips On Buying a Foreclosed Home

Working With the Lender

Your lender may only consider a deed in lieu of foreclosure in certain situations.

For instance, the lender might require that you first put your home on the market as a short sale or explore a loan modification.

If you’re completely unable to pay, start by contacting your lender and asking if a deed in lieu of foreclosure is an option. If it is, you’ll be given an application and asked for documents proving your inability to pay the mortgage. The documents will show your income and expenses, as well as bank account balances.

This process can take 30 days or more.

If your application is approved, you may want a real estate lawyer to review it to help you understand whether you are fully released from the financial obligations tied to the mortgage. For example, if the lender sells the home for less than the remaining mortgage balance, are you responsible for that deficiency?

Once you are comfortable with the title-transferring agreement, you and the lender will sign it, and it will be notarized and recorded in public records.

At this point, you will be notified how long you have to leave the home.

When to Consider a Deed in Lieu

One instance when a deed in lieu may be a good idea is if you owe more on your home than it is worth, as long as the agreement stipulates that you won’t owe the difference between the value of the home and what you owe.

If you are unable to continue paying your mortgage, it’s important to know that a foreclosure will leave a nasty mark on your credit report for seven years and make it difficult or impossible for you to take out another mortgage for years.

A deed in lieu will appear on your credit report, but it may not have the same lasting effect. Your credit score will drop, but long term, it may not affect your ability to take out a loan.

Benefits of a Deed in Lieu

There are advantages for both the borrower and the lender when it comes to a deed in lieu. For both, the big benefit is not having to go through the long and expensive process of foreclosure.

Because a deed in lieu is an agreement between you and the lender and not an order from a court, you may have a little more flexibility in terms of when you vacate the property.

With foreclosure, you are sometimes forced to vacate within days by local law enforcement. With a deed in lieu, you may even be able to work out an arrangement where you rent the property back for a period. The lender gets a little rent money and you have more time to figure out your next move.

In addition, this option is more private than a foreclosure.

From the lender’s perspective, the benefits of a deed in lieu include avoiding litigation and court time.

Drawbacks of a Deed in Lieu

There are disadvantages as well. A deed in lieu will appear on your credit report, even if it’s not as damaging as a foreclosure. Plus, it may still be difficult to get another mortgage in subsequent years.

It may still be difficult to get another mortgage in subsequent years.

If you owe more than your home is worth, you may still be on the hook for the difference between the appraised property value and what you owe.

You may be denied a deed in lieu if there are other liens or tax judgments on the property, or if the home is in bad condition and requires maintenance to sell.

Recommended: Home Affordability Calculator

Being Smart About Your Mortgage

The best thing to do, if at all possible, is to avoid getting into a situation where you can’t afford to pay your mortgage. If you’re having short-term financial issues, talk to your lender immediately to see if there is the possibility of delaying a few months’ payment or setting up a loan modification so you can work to pay off your outstanding debt.

Typically, the lender will want to help you; it’s easier to work out an agreement now than several months down the road, when you haven’t paid your mortgage at all and are facing foreclosure.

If you do end up in a situation where you are unable to continue paying your mortgage and you aren’t offered options, consider a deed in lieu of foreclosure as a faster and easier solution than a foreclosure.

If you’re just starting to consider buying a home, create a budget and calculate how much in mortgage payments you can afford each month. Don’t forget to calculate insurance and interest as well. Make sure that you won’t be stretched thin financially.

Recommended: Mortgage Calculator

The Takeaway

If you can’t pay your mortgage and you’re unable to get a short sale or loan modification approved, a deed in lieu of foreclosure may be the best option. Rather than go through the foreclosure process, a deed in lieu allows a borrower to sign a property over to the lender.

Your credit will take a significant hit, though not as bad as with a foreclosure.

If you’re looking for a home mortgage or a cash-out refinance, SoFi offers a range of competitive and flexible options, with a mortgage loan officer guiding you every step of the way.

SoFi makes the home mortgage process simple.

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SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility for more information.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

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No matter which side of the home buying process you’re on, it’s important to understand all the real estate terms and documents you’ll come across.

While you may be familiar with mortgages and contracts, one document that tends to be greeted with uncertainty is the house deed.

What is a house deed? Does it prove that you own your house? This guide will explain what a house deed is, why you may need one, and the role it plays in the home buying and selling process.

What Is a House Deed and Why Do I Need One?

A house deed, sometimes referred to as a property deed, is a written and signed legal document used to transfer ownership of real property. Real property is land and any property attached directly to it, like a house.

In other words, a house deed is very important to the buying and selling process.

In fact, a home transaction can’t take place without a deed. It’s one of the things you need to buy a house. Both the buyer and seller of a property must sign the document for a transfer of ownership to take place. Every state requires that this be done in front of a notary and, in some states, before other signature witnesses as well.

Is a House Deed Different From a Title?

Though the two terms are often used interchangeably, a house deed and a title are very different.

It’s often assumed that a title refers to a document, but it’s actually more of a concept referring to your legal ownership of a home. A title grants you ownership rights, including possession, control, exclusion, enjoyment, and disposition.

Put simply, a title refers to your ownership of the property, your ability to use your property as you please, to choose who enters your property, to enjoy your property as you see fit, and to decide when and to whom you transfer ownership of your property to.

But because you can’t transfer a concept, a physical document is needed to symbolize and confirm a change in ownership. This is where a house deed comes into play. Closings can take time, but without a deed they can’t happen at all.

What Is On a House Deed?

Deed requirements vary by state. But generally speaking, a house deed should include:

•   Description of the attached property.
•   Details of the grantors (sellers).
•   Details of the grantees (buyers).

Once all parties are in agreement, a deed should also include the signatures of both grantors and grantees. The deed must then be delivered to the grantee by handing the document over and accepted.

Recommended: How to Get a Mortgage in 2023

Types of House Deeds

There are different types of house deeds to be aware of. They offer different benefits, and even a few risks, to buyers and sellers.

Here’s what you need to know about the most common types.

General Warranty Deed

A general warranty deed is designed to offer premium protection to the grantee (buyer). This type of deed involves the grantor (seller) making covenants, or a series of legally binding promises, to the grantee.

Such promises could include what’s called the covenant of seisin. This covenant guarantees that the grantor is allowed by law to transfer the property in question. Another is the covenant of quiet enjoyment, which guarantees that the new owner will not be disturbed on their property, even if the grantor had a defective title, such as a previous lien or judgment.

Quitclaim Deed

Unlike a general warranty deed, a quitclaim deed is designed to offer maximum protection to the seller.

Also known as a non-warranty deed, this type of deed does not include covenants for the buyer. Should the seller unknowingly have a defective title, the buyer will have no legal recourse should the deed be challenged.

Special Purpose Deeds

Though not as common as a general warranty or quitclaim deeds, there are several types of special purpose deeds you may come across, especially if a seller has someone acting on their behalf.

Similar to quitclaim deeds, there is often little protection for the buyer but in some situations, a special purpose deed is the only legal option. Special purpose deeds include:

•  Gift Deed. A gift deed is used to convey a real property title that is given for no consideration, or without money exchanging hands. In some states, there is a time limit to record a gift deed or it becomes void. And despite money not being exchanged, transfer, records, and/or gift taxes are sometimes still required.
•  Tax Deed. If a property has fallen to delinquent taxes, a tax deed will be issued for the property transfer.
•  Administrator’s Deed. If the seller passes away without a will, an administrator’s deed may be used by the appointed administrator of the estate.
•  Executor’s Deed. If a seller passes with a will, an executor’s deed may be used by the estate’s executor to transfer the property.
•  Sheriff’s Deed. When property is seized by public office, an execution sale often takes place. A sheriff’s deed is then provided to the winning bidder to complete the transfer.

Obtaining or Transferring a House Deed

As a buyer, you’re not responsible for tracking down a house deed (though it is a critical factor in your house-buying timeline). But if you’re selling or taking out a second mortgage on your home, you’ll have to locate the document before moving forward.

Luckily, you can track down a house deed with just a few simple steps.

1. Determine your jurisdiction. A search for a house deed should always start by confirming your county recorder’s website .
2. Search the database. Once you’ve found the correct database according to the location of your property, search for the record of your house deed. You may need your property index number, but the address of your home may be enough to track it down.
3. Conduct an accuracy check. Assuming you find a record of your house deed, take a few minutes to ensure that it’s accurate. If you do spot an error, call the recorder’s office to determine how the issue can be resolved.
4. Request a copy. If everything with your house deed is accurate, you can request a copy from the recorder. You may need to submit proof of your identity or pay a fee for both the copy and certification. But once you’ve met all the criteria of the office, you’ll have a physical copy of your house deed.

If you’re struggling to track down your house deed, you always have the option of hiring a third party to handle the process for you.

Once you have the deed, you can start the transfer process. Because this is necessary in every home-buying transaction, your real estate agent should be able to walk you through the following steps.

1. Prepare the deed. Even if you’re not using a real estate agent, it’s a good idea to hire a real estate attorney to prepare the deed. An honest mistake on your part could void the transfer or lead to serious legal issues down the road.
2. Review the deed. Both parties should review the deed for any inaccuracies. This includes full legal names, addresses, and the description of property. No one should sign until both parties verify all information.
3. Sign the deed. Both parties need to sign in front of a notary. Check with your state law to see if other witnesses are required .
4. Record the deed. A signed deed should be presented to the local county recorder’s office where it will be filed and stored in their database. Be prepared to pay any associated fees and taxes at this point.

Recommended: Guide to Buying, Selling, and Updating Your Home

Knowledge is Power

Though legal requirements can vary, and different house deeds provide unique protections for sellers and buyers, a house deed is generally one of the most important documents to know about in real estate.

If you feel confident in your understanding of the home-buying process and you’re ready to start your journey to home ownership, SoFi offers home mortgage loans with flexible terms, an online application, and mortgage loan officers who are available to guide you through the process. It takes just a few minutes to find out if you pre-qualify. Then you can choose the mortgage that’s right for you and your financial situation.

SoFi can help you realize your dream of owning a home.

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Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility for more information.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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