Buying a home is an investment, and an expensive one at that. As such, you want to make sure that you are making a good decision and not buying a house that could be problematic to own and live in. We’ve compiled a list of red flags that home buyers should avoid in order to make a sound decision.
1. Few and low-quality pictures
This is a red flag you can catch before any of the others. If the listing has very few photos, especially of the inside of the house, this is an indication that the house is not in good condition. In addition, if the photos are low quality, it shows a lack of professionalism on the listing agent’s part. Photos taken with a camera phone or small digital camera are not up to industry standards. Plus, if you can’t see much detail, how will you know what the house actually looks like?
2. The price is too good to be true
Home prices are usually a deal breaker when shopping for a home, but usually it’s because the price is too much for your budget. However, if the price is low enough that it seems like a steal, it’s an indicator of a problem. It could be with the location, but it is most likely due to the home itself. The next two red flags to watch out for are related to a “too good to be true” price.
2.1. Selling in “as-is” condition
If a home is listed as “as-is”. This is an indicator that multiple repairs need to be made that the current owners are not going to make, and adjusted the price accordingly. These repairs could be HVAC, roof, foundation, plumbing, or issues with the property itself. With many “as-is” homes or homes being sold For Sale By Owner (FSBO), buyers may see a note in the listing that says “BTVAI”. This stands for “buyer to verify all information”. This is used as a way to give less liability to the sellers or agent for anything wrong with the house. If you (as a buyer) are looking to fix and flip the house, it may be less of an issue, since the house will be gutted and fixed up. If you are not a house flipper, it requires a lot of due diligence to find out what you may be getting into.
2.2. Repairs are needed
If some repairs are needed, like HVAC, appliances, roof, or plumbing, it can be a red flag for buyers because they don’t want to pay for expensive repairs after buying a house. However, if you are determined to buy this house, you may be able to negotiate a lower purchase price to hep offset the cost of the repairs. However, if the sellers won’t budge on the price, walk away form the deal.
3. Lots of homes for sale in the neighborhood
Having plenty of homes for sale to choose from is great for buyers. But if many homes are for sale in the same neighborhood, this is a huge red flag. If many current residents want out, there is a problem with the subdivision or its location. This could cause a decrease in price, but do you want to live somewhere that people are fleeing? Its common for residents to move out if the school district boundaries change, traffic noise increases, or if there has been a decrease in safety. Ask your agent and current subdivision homeowners about why people are leaving.
4. Odd odors in the house
As you tour the house, take note of the smells inside and outside the home. If the home is near a farm or factory, smells may linger over the home if the wind changes direction. Inside the house, keep an eye out for odd odors or overly-scented rooms. Either one of these can indicate a problem with the home. Overly-scented rooms can be the sellers attempting to mask an unpleasant odor.
5. Noises inside and outside
In addition, listen to the sounds around the home. Traffic or a nearby railroad can produce a lot of noise at certain time of the day. Inside the house, keep an ear open. Creaking floors and hinges, loud appliances, and old HVAC systems could quickly become irritable if you live in that house.
6. The home was taken off the market then relisted
When a home is taken off the market then relisted, it raises a number of questions. Some of which can be red flags, so do some digging. Some sellers try to remove then relist their house in order to reset the days on market to a low number. This is done to avoid a high days on market count, which can be a turn-off for buyers. Some brokerages (like Keller Williams) have rules against this and require homes to be off the market for a set period of time before being relisted. For Keller Williams, this is 6 months.
However, a relisted home may not be a red flag. As you ask questions, you may find that the sellers delisted the house to make repairs that an appraiser or inspector found. With the repairs made, they relisted the home. For buyers this is a bonus. While the listing price may be higher, buyers have the security that a large repair was recently performed, is under warranty, and there is proper documentation. Take your time and perform your due diligence.
7. The house was recently flipped
This isn’t necessarily an immediate red flag, but it is something to pay attention to. Ask to see documentation, permits and licenses of the work that was done and by who. If the work as done professionally, you can be sure that the work was quality and warranties are in place. It the fix and flip was done by an amateur, a home inspections should be performed to judge the quality of work. If all of the work is above board, you could be living in a home with plenty of new and upgraded features!
8. The house is in a flood zone
Flood zones are a massive red flag. Building or buying a home in a flood plain is a massive gamble with the future of your home. Water damage is one of the most dangerous and costly problems to have with a house. In addition, you need to budget flood insurance into your monthly payments over the time you live in the home. Depending on the likelihood and severity of flooding in the area, your rates could quickly become too expensive. Bottom line: avoid homes in a flood zone.