Buying a home represents one of the biggest financial and personal decisions anyone can make. It can be a significant commitment, one that ties you to a piece of property for the foreseeable future.
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Many also view their house as an investment, a way for their money to grow as their children do. But if you buy the wrong property, you might find that your investment loses money.
Read below to see the biggest issues to look for before buying a house and how you can avoid them.
Realtor Tiffany Alexy was representing a buyer interested in a home whose roof had been patched several times. The roof was still working, and there was no evidence of leaks or other current problems.
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“But it definitely was on its last legs,” she said.
She and the buyer contacted a few roofing companies to provide an estimate for its replacement and used the information to negotiate a lower price. The seller agreed to knock $4,000 off the final price “which didn’t cover the whole cost of replacing the roof, but would cover a major portion of it.”
Alexy recommends looking at the roof, air conditioning, heating and other major systems before buying a home. They might be working fine now, but will they need to be replaced in the next few years? A desperate seller desperate might be willing to lower the price if you point out that the roof or HVAC will need to be replaced within the next five years.
Most people say if you have the choice between the worst home in the best neighborhood or the best home in the worst neighborhood, go with the former. It’s easier to upgrade a home that needs new carpets or wallpaper than it is to spruce up the whole block. A bad neighborhood can’t be fixed, no matter how nice your home is.
To determine if it’s a good neighborhood, look up property values for the surrounding homes on the county assessor’s office website, find crime statistics, and drive around during different times of the day. Are there children playing in the street or is the corner liquor store a draw for vagrants? Are there robberies in the area or only speeding tickets?
Foundation and Structure
Bigger Pockets Community Manager Mindy Jensen has flipped nine homes with her husband, Carl. When they were buying a home in Oak Park, Ill., they almost decided to forego the final inspection. It was $400, she said, and they felt like the home was in good enough condition. Anything they found later, she thought they could handle themselves.
Fortunately, they changed their minds and hired an inspector. He found that the home’s stucco had been installed with Exterior Insulation Finishing System, a technique that can allow mold if not installed correctly.
“Originally intended for dry climates, EIFS was used in places like Texas with disastrous results,” she said. “Mold infestations completely destroyed homes, rendering them uninhabitable.”
Jensen didn’t want to risk the possibility of mold, so they canceled the contract and bought a different house.
How to Prevent Major Problems
- Get an inspection. Some sellers will offer you a better price if you purchase a home without an inspection. As tempting as that deal sounds, think twice. Substantial repairs can cost you tens of thousands of dollars. Unless you’re willing to take that big of a gamble, it’s not a bet worth making.
- Write the contract carefully. Homeowners must disclose any problems they’re aware of before closing. Make sure the final contract states they’ll be on the hook in case problems arise that they likely knew about.
Remember, buying a house is a decision that could impact your finances for the next few decades. You wouldn’t buy a car without a test drive. Do your due diligence before buying it and avoid any problems that could haunt you for years.