5 Red Flags You Shouldn’t Ignore When Buying a Home
“Love at first sight” is as common a phenomenon in the real estate world as the dating arena, but as any dating guru would tell you, love at first does not guarantee a healthy long term relationship. Buying a home is a long-term commitment. Although it may be difficult to override an initial attraction to a house, it’s important that homebuyers set aside their warm-and-fuzzy feelings and closely examine the object of their infatuation.
Here are five red flags that could be deal-breakers when buying a home:
Bank appraisal is lower than contract price
While this is not an uncommon situation, it still requires cautious navigation. If the bank’s appraisal of a house is lower than its contract price, the bank will be reluctant to agree to a mortgage that meets the contract price. In that case, buyers will have to pay for the difference themselves. Try to negotiate a lower contract price with the seller, or get an appraisal from a different bank.
As a buyer, any one of these situations can be a hassle, and you will want to give serious consideration to whether or not the home is worth that hassle.
Inspection turns up too many issues
Buying a home that is a fixer-upper can be tempting, especially when the location is ideal or the house oozes character and charm. Still, inspection reports should not be taken lightly. When you’re reading an inspection report, try to see each issue in terms of how much time, energy, and money you would have to spend to correct the issue. If you’re not up for shelling out more money on the house you’ve just purchased or enduring months of construction in your new home, walk away from the deal.
You’ve compromised too much
Inside every homebuyer’s head is a dream home—complete with mirrored walk in closets, breezy libraries, or perhaps the option to commute to work by bicycle. Usually, these homes are not the ones you end up buying. Price has a remarkable talent for narrowing down “must have” lists.
Still, buyers sometimes find, at closing time, that they can’t lose a nagging sense of dissatisfaction about compromising on one of their “must have” items. If you find yourself in this situation, don’t close the deal. It’s better to extend your house hunt than to have a 50-year mortgage on a house that truly doesn’t satisfy you.
Top of your price range
One of the first things you have to decide as a homebuyer is how much you’re willing to spend on a house; after a long drawn-out house hunt, or after touring the house of your dreams, this number often comes under pressure.
If you find yourself on the brink of closing a deal that maxes out or exceeds your original budget, take a step back and think about why you set your original price. Did you leave yourself breathing room, or did you go all in? If you find that buying your house would mean eating Ramen Noodles and sitting on a beanbag for a few months, you might want to back out of the deal.
Partner isn’t on board
Buying a home with another person has some major advantages, but it can also be difficult to find a house that accommodates the needs and wishes of both partners. As much as possible, these should be discussed beforehand, so both partners have a clear idea of what they are looking for. However, if you do find yourself in hot pursuit of a house, take a look around to make sure your partner is right there with you. If he or she is lagging behind, try to find out why. Ultimately, your happiness in a house is going to depend more on your partner’s happiness than on bay windows, granite countertops, or a two-car garage.
Buying a home can be a wild ride, so it’s important for buyers to be mindful of their decision making process from start to finish. Some amount of nervous energy is perfectly normal. When nervous energy turns into real dissatisfaction, it is time to opt out.