No matter how much you love a potential home, there are just some things that a great open concept kitchen and a perfect neighbourhood can’t make up for. As a buyer, there is a certain amount of risk associated with purchasing a house. You’re relying on the seller to be upfront and honest about the condition of the home, hoping that no surprises crop up along the way. Unfortunately, surprises are not all that uncommon in real estate. That’s why it’s so important to know when to fight for something and when to walk away from a home sale.
Bad Home Inspection
If you’re looking at an older home, you can expect there will be a handful of issues with it. Some can be unfortunate but completely manageable, like needing to upgrade the windows and doors, but others can be a bit too much to realistically take on. Electrical, plumbing, mould, and foundation issues all rank at the top of home inspection red flags. You can always try to negotiate and have the seller compensate you for these problems or even fix them themselves, but know that these issues can impact the health and safety of your entire home. It may be time to pack it in and move on to the next place that will pass a home inspection.
Low Home Appraisal
If a home is on the market for significantly higher than its appraisal value, as a buyer you are in for a headache. Not only is it illogical to pay well above the market value of a home, lenders only want to lend as much as a property is appraised for. Re-negotiating the selling price is your only hope of securing that mortgage. If the seller refuses to budge, however, there is a good chance your financing could fall through entirely.
Expensive Home Insurance
Your home insurance premiums are costs you are stuck with for the entire length of time you live in a home. Astronomical rates aren’t just a hit to the pocketbook every month, they are often indicators of other issues. Outdated plumbing, electrical, and HVAC systems can drive up your premiums but are often fixable. While you can have electrical work done, things like high crime rates or high-risk flood locations aren’t solved through renovations. If the quotes you’re getting for home insurance seem unusually high, do a bit of digging to find out the cause. In some cases, it won’t be worth the risk.
Sometimes homeowners will try to cut corners when performing renovations. This could mean not obtaining the proper permits. Not only could this increase your home insurance costs, as mentioned above, but could impact the value of the home, and create safety concerns. Building codes and standards are designed to keep people safe. Bypassing the permits intended to enforce those standards could result in shoddy work that could potentially put you and your family in harm’s way. If this work is disclosed to you, you may have to assume future responsibility for any damages that occur. When looking at a home, you should think long and hard about the implications of taking on a property with unpermitted work.
It can be hard to walk away from a home you love, but it can be even harder to live with the consequences of the above red flags. When you’ve found the dream home that’s checked all the boxes without any unpleasant surprises, make sure you’re getting equally dreamy interest rates by working with one of our friendly and professional brokers at Source Mortgage! Contact us today to get started.