A common term used in the real estate industry is “red flag” which refers to the condition or information on a property that appears conflicting and a wise buyer will get to the bottom of the conflict. For example stains on the ceiling may indicate that the roof needs replacing.
In most cases the red flag has something to do with the condition of the property but other factors could be a red flag so it is wise to pay attention to all aspects of the home search and purchase. I can’t really blame buyers for getting themselves into ridiculous loans that are now in foreclosure but a savvy buyer would have seen the red flags even though their less than ethical lender recommended and approved them for risky mortgages.
The process of buying a home is both stressful and exciting. Buyers can help reduce the stress by being actively involved and watching out for red flags and being vigilant about investigating those red flags.
Another important way to reduce stress is to work with an excellent agent you trust. Your agent will advise you regarding different aspects of the search and transaction but making the decisions will be up to you. Your agent has a fiduciary duty to you and to follow your legal instructions.
A few signs of a good agent are someone returns your calls promptly, answers all your questions and shows you homes that meet your search criteria. Some less than ethical agents try to push their clients into more expensive properties so be aware of that red flag.If aspects of the information you receive on a property appear conflicting that is a red flag. It could be due to carelessness but you should certainly get to the bottom of it in case it is due to someone concealing a material fact. Get answers to all your questions till you are sure you have the whole and accurate picture. When buying real estate there are no stupid questions.
If an inspector you hire or you suspect that the seller has had the property inspected before and you were not given a copy of that report, which is a red flag. It may indicate that there were conditions discovered during the previous inspection that the seller doesn’t want you to know.
Don’t assume anything. You know what they say about that. Follow through to make sure assumptions don’t make your transaction a nightmare. It might be easy to assume that if the lower level has a second kitchen and all the other amenities for a rental that it can be legally rented. Even if the seller has rented it in the past, the seller may have done it illegally. If you are counting on the income from renting the lower level to pay the mortgage you may find yourself in a home that you ultimately may not be able to afford.
Be conscious of potential changes in the neighborhood if there is a large open area in close proximity to the home you should find out what the plans are for that property. Don’t assume that it will be populated with single family homes. It could be perfect for a school in which case if you are sensitive to noise it could be a problem for you
In closing: Make sure you are on top of any unknowns and don’t be afraid to ask questions
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