If you’re buying a home, it’s easy to act based on emotion and move forward with making an offer if you fall in love with a particular property. But you should remember that buying a house is a huge investment and will likely come with a large mortgage payment, so you don’t want to rush into the process of picking a property and end up with a place that has major issues.
The good news is, by looking out for a few key red flags, you should be able to avoid a mistake that could come back to bite you. Here are five big signs that suggest you should probably walk away from a home you’ve been looking at.
1. A price well above comparable properties
Overpaying for a home could have serious long-term financial consequences. It can be more difficult to get approved for an affordable mortgage if a home is priced too high. And you’re more likely to end up being unable to sell the home at a profit — or even for enough to pay off your home loan — if you overpay for it in the first place.
To make sure that doesn’t happen, you’ll want to compare the price of the house you’re considering to similar properties in the area. If your home is priced well above competitors and it doesn’t have something special that justifies the added cost — such as an amazing water view — then you should probably steer clear.
2. Unpermitted work
If you discover that any of the renovations or changes the prior owners have made to the home were done without permits, it should likely lead you to walk away immediately. If the local building code enforcement office where you live discovers unpermitted work at any point, you could face fines, penalties, and a reassessment of your taxes — even if the upgrades were done by the prior owners.
Unpermitted work may also not have been done to current safety codes. You could be forced to redo the work — or could be at risk of experiencing a fire or other disasters if things weren’t done right.
You can usually check to see if permits were pulled by contacting that local office, so if you notice renovations, be sure to confirm the work was done with the appropriate permissions.
3. Defects in major systems
If there are big problems with the home’s major systems such as the roof, HVAC, plumbing, electrical, or foundation, then this is a major red flag. It can be expensive to make fixes to these systems and it can be difficult to determine upfront exactly what the costs will be.
Be sure to get an inspection to find out if there are any big issues you’re likely to face. If you discover problems, consider walking away unless repairs are made to your satisfaction or unless the house is priced low.
4. HOA rules you can’t live by
Homeowners associations can have strict rules. You’ll want to know upfront exactly what obligations you’re agreeing to as a homeowner as well as the HOA’s limits on what you can do with the property.
If you discover rules you’ll have a hard time following, you should pass on the home. Otherwise, you could end up miserable as you fight with the HOA for years to come.
5. A bad school district
Finally, if the school district isn’t good, you should likely consider walking away from the property. Future buyers who are parents will always be interested in this, and properties tend to hold their value better if they are in a good district.
By watching out for these five red flags, you can hopefully avoid ending up with a home that costs you money — and makes your life harder while you’re living in it.