Before the deal is finalized, it's important to ensure your dream home won't come with any hidden surprises. When home shopping, things aren't always what they seem. Some surface issues are more damaging to the value of the home than they seem, while others are easily fixed. Before you are knee deep in paperwork or empty your wallet for rounds of inspections, consider these five clear warning signs screaming at you to walk away.
Warning: Flood Risk
A peaceful view of the water isn't always worth the risk of flooding. The purchase of a home sitting near a lake, river or ocean carries with it the risk of flooding. Pull out your smartphone and run a check of the address on the Federal Emergency Management Agency's flood map database.
With FEMA updates, your new home could be in a food plain. If a small portion of your property is on a flood plain, your lender may require flood insurance. You may enjoy a water park on your property, but it comes with added cost. If the home is on a high elevation, be sure the layout routes water through the land and away from the home.
Warning: Smells, Stains and Dampness
Smell is one of your most potent senses, so you should use it to sniff out warning signs that it's time to walk away. Does the house have an obvious smell?
The owner may have recently rehomed the fifty cats using the living room as a litter box, but that doesn't mean you want to pay to rip the carpet up and deep clean. If you smell rotten eggs, there may be a natural gas leak. Some gas companies include mercaptan, which has a sulfur-like smell to help identify such risks.
Also, check for water stains around baseboards and on the ceilings, which are a sign of flooding, draining or roofing issues. Water damage and perpetual dampness are warning signs for mold and mildew growth.
Warning: Old Heating System
Eventually heat pumps, boilers and furnaces reach an age where they must be replaced. Otherwise, they pose a threat and cost more in the long run for current troubles.
Typically, the average heating system lifespan is 15 to 20 years, depending on how well it's been maintained and the quality of original installation. When well cared for, some systems have an extra ten years in them. To judge the age of the heating system for yourself, here's where to start:
- The original build date of the home
- The heating system's original manual
- The system's serial number
- Strange noises: banging, popping, grinding or squealing
- Inconsistent temperature, as the heat should be evenly distributed
- Moisture, cracks or corrosion on or around the unit
- Unreasonable utility bill fluctuations, as these statements may be requested
Listen to what the owner or real estate agent has to say, and listen to what they aren't saying. Ask questions and look closer at the heating system. If you notice any of the above warning signs, walk away.
Warning: Unmentioned Structural Issues
The seller of the home is required by law to disclose code violations and existing structural issues to potential buyers. Unfortunately, sometimes people omit important facts. Pest infestations, ancient roofing and "emotional defects," due to a death on the property or reports of a haunting, may escape mention by the seller or be put in vague terms. Look around the house with extra sharp eyes, and take photographs to inspect more closely later.
It's also a standard practice to ask for a seller's disclosure report, and the laws differ for what's required in each state. Federal law only requires that the disclosure mention threats of lead-based paint. Copper pipes last longer than lead pipes and would be a major replacement or repair cost, and crawl space ventilation areas should be covered by a screen instead of cement.
Warning: Unfairly Priced Market
The price looks amazing, but is it fairly priced for the market? Through a bank's home value estimator, you can check the fair market estimate of a home you're interested in to see if it's within your shopping budget, and to make sure it's at least close to the original listing price. When an official bank-ordered appraisal reveals a discrepancy with the original listing price, try to talk the owner down to a fair value price or meet halfway. If not, walk away.
It's wonderful to create a short list of properties that excite you, but there are issues that go unnoticed when you're caught up in the home shopping process. Use a scrupulous eye, speak up and listen to your instinct when it's time to walk away from a house that's more of a nightmare than a dream.