Buying a home is something of an adventure; if it weren’t, there wouldn’t be an entire network devoted to shows about house hunting. But adventures can go wrong quickly, and not every quest for a new home ends with the happy ending you see on TV. Here are some red flags you should look for when you’re buying residential real estate.
Large Price Drops
If a house doesn’t sell right away, it’s pretty typical to see a price drop of a few thousand dollars, or possibly a bit more for a more expensive property. A small price drop brings the property back on the radar screen of buyers’ agents and may simply represent adjusting the price to be more in line with what the sellers should realistically expect to get. But a large drop in purchase price, such as $20,000, might mean something more sinister. Sure, it’s possible that the seller insisted on an unrealistically high sale price at the outset and the real estate agent indulged them. But most agents will convince their sellers to start with a more reasonable price. A significant price drop could signal that the seller discovered some significant defect and is looking to unload the house fast.
House Listed for Sale “As Is”
On those flipping shows we love to watch, buyers purchase homes “as is,” even sight unseen, and convert them into showplaces. Once again: you are not on TV. If a property is listed for sale “as is,” the buyer is stating that they will not make any repairs, or any concessions in price, for the buyer. Not a huge deal if all that needs fixing is cosmetic issues like ugly shag carpet or dated wallpaper. But the “as is” tag is usually saved for deeper, more serious issues. If you’re in love with a house that’s for sale “as is,” do your due diligence to discover what the problem is and whether you’re willing to take it on.
It’s a Flip
With the popularity of house flipping shows, lots of people have gotten into the house-flipping business…and not all of them belong there. That’s not to say that you should never buy a house that was a flip. The upside of a good flip is that you may get a house that’s move-in ready at a great price. But remember that the goal of a house-flipper is to make money. That means they are unlikely to splurge on the finest materials, and may cut corners wherever possible in order to increase their profits. If you are determined to buy a house that was a flip, don’t skip the home inspection (not that you ever should).
Most flippers don’t have HGTV stars’ sense of style, or their resources. You don’t want someone else’s flip to become your flop.
Fresh Paint…in Certain Areas
Ordinarily, fresh paint isn’t a problem in a home for sale; it can mean that the sellers put effort into updating the home and getting it ready for market. But if there is fresh paint only on certain walls in a room, or part of the ceiling, that can be a big red flag. It could indicate a cover-up of an area that suffered water damage or some other problems. Take a close look at freshly-painted areas and reference them against the seller’s required disclosures about damage to the property or repairs.
Many Homes for Sale in the Neighborhood
If there are many homes for a sale in a neighborhood (and it’s not a new development), it may just be a coincidence—but it could also be a big red flag. Multiple homes in the same area that go up for sale around the same time could indicate that nearby land is going to be used for something that homeowners would prefer not to be near. This could mean a new highway, commercial development, gas pipeline, or something similar. Be sure to investigate and ask your agent to help you find out if there are any planned projects, or worse, any recently-discovered hazards or other problems in the area.
House hunting is exciting, and as you pull up to each home you’re checking out, you are likely laser-focused on the home itself. But take a moment and pay attention to what’s going on around the house, because that’s the environment in which you’ll have to live. Real estate agents make sellers spruce up their own houses, but they can’t force the neighbors to do anything. If the neighbor’s home is in disrepair, yard is unkempt, or dogs are barking constantly, ask yourself if you want to live with that. No matter how lovely your own home is, it may not be worth it, especially if the neighbor’s issues disrupt enjoyment of your own outdoor space.
Technology is a wonderful thing, and it allows you to easily check out how frequently a home you are interested in has been sold and what it sold for each time. As with many other things, a home that has been frequently sold may just be the victim of coincidence. Perhaps the sellers were transferred to another city for work and had no choice about the move. But if the home has turned over frequently, it could also indicate deeper problems that perhaps the previous owners did not become aware of until they moved in. This is a tricky factor, because it’s difficult to know exactly why previous owners chose to move, but if you are considering a house that has seen a lot of turnover, it’s worth doing some diligent investigation.