Red Flags for Homebuyers
Home buying season is upon us, and while some buyers get caught up in the emotions of finding their new home, an important part of buying a home is paying attention to red flags. Red flags are those items that could potentially cost you a lot in the future, or even in the beginning - essentially, warnings of a danger or a problem. According to HouseMaster, a major home inspection company with offices in the United States and Canada, 40 percent of previously owned homes have at least one serious defect (housemaster.com). Provided is a list of items and things to consider or avoid when looking for your next home.
1. You're also buying a neighborhood:
Neighborhoods are a vital part of the home buying process - make sure you visit at different times of the day to get a true sense of the neighborhood. Also, consider trends when looking for your next home. Does the neighborhood have an HOA? Are the homes in need of repair? Is the neighborhood going down rather than up-and-coming? What is local crime like? A neighborhood can be the most obvious red flag for a buyer.
Fixers can be great deals, but it's important to know how much you're getting into when you buy a fixer. Do you have a comfortable level with renovations? Are renovations going to make the purchase not economical? Will they break your bank? If a fixer will cost you more in renovations than your budget can handle, or go above what the home is worth, it's a potential red flag.
3. Issues with a Home Inspection:
A home inspection is not required to buy a house, but it is always recommended, as an inspection can shed light on potential red flags. All offers should be contingent upon a satisfactory home inspection - if there are issues, you can potentially negotiate with the seller. Also, some issues can prevent financing for a mortgage. Always get a home inspection, and be wary of homes being sold "as is."
4. Additions and Decks:
Are there additions to the home or property? Do they look like a DIY job? Any work should be done to code, especially when it comes to remodeling. Additions that are not done to code can be expensive to fix, and they can potentially lower the value of the home. If work has been done, you can contact the county or city for work permits and check if the city tax records match what the seller claims. If a home has a deck, ask the seller who built the deck and when it was built. Decks are notorious for being costly to fix or repair, and there's potential that it will have to be rebuilt to be fully safe. An unsafe deck, or one that just doesn't look right, is a definite red flag.
5. Noticeable Structural Problems:
Always check doors and windows to make sure they open and close without issue, as they can be indicators of structural issues below the house. Foundation issues can be very expensive; look for large, noticeable cracks on the outside of the house and any cracks in concrete floors where the sides are not even. Foundation fixes generally cost thousands to fix - unless you have a large budget for repair work, avoid this big red flag.
6. Pest and Termite Damage:
Pest damage to homes can be very costly. If the pests have chewed into any studs, the structure of the home is compromised and can be expensive to fix. If a home has been inspected and treated for pests in the past, the seller needs to disclose this to a buyer. Some pest issues will return without proper treatment and management; be sure to ask the seller if they have had pest issues in the past.
7. Water Damage:
When walking through a property, look for moisture or water stains. With a proper home inspection, the inspector will look under the house for potential water issues. Moisture and water can be signs of drainage issues and can lead to some very expensive fixes. Water issues are a huge red flag when it comes to finding a home - they can affect the foundation, structure, roof, and a number of other areas in a house.
8. Faulty Electric and Old Wiring:
Is the home an older home with outdated electrical? Be very wary of a home with faulty or inferior electrical work. Older homes with outdated electrical cannot handle additional electrical work that builds up over the years, and knob and tube wiring or aluminum wiring found in older homes can be extremely costly to replace or repair.
Asbestos was used as an inexpensive fire-retardant material from the 1940s through the 1970s. We now know that asbestos can be extremely detrimental to lung health. Asbestos was used in blown-in attic insulation, vinyl floor tiles, some glues and linoleum, window caulking and glazing, roofing material, HVAC duct insulation, siding material, plaster, fiber cement siding, some forms of paint, and thermal insulation on basement boilers and pipes. Asbestos is as much a red flag as mold.
Mold is a part of the natural environment, and molds begin growing indoors when mold spores land on surfaces that are wet. Molds are a health hazard to humans; some molds produce mycotoxins - toxic compounds - that can lead to neurological problems or worse. Both asbestos and mold are huge red flags wh