Sign No. 1: The inspection turns up something majorly wrong
Sure, you might cringe at some of the current owner’s wallpaper choices. But cosmetic issues are relatively easy to fix compared with, say, a vintage electrical system that’s one spark away from a fire.
How to Back Out of Buying That Home
Got Cold Feet About Home Buying? Here’s How to Cope
8 Stages We All Go Through When Buying a Home
Don’t ever, ever (ever!) ignore something major on the inspection report, such as sagging floors, cracks in the wall, or roof or drainage issues, says Christopher Bourland, senior appraiser at Mid-Atlantic Valuation Group in Wayne, PA. Any type of structural issue can quickly turn your dream home into a financial house of horrors.
Sign No. 2: You sense that the builder cut corners
We all want a house that has “good bones”—as in, one that will last. That’s why savvy home buyers should pay special attention to little hints that the builder or remodeler might have gone the low-quality route, says Jesse Fowler, president of Tellus Design + Build in Costa Mesa, CA.
If you haven’t already, use the final walk-through to scrutinize every nook and cranny. One of the signs Fowler looks for is fresh paint overspray on the inside or outside of window trim and light fixtures.
“This overspray might be covering up inconsistencies in the finish—wood that doesn’t look like wood, for example,” he says. “But more importantly, it quite often indicates that the contractor went with the lowest-quality painter, so it’s likely they cut corners elsewhere in places that are not so obvious.”
Sign No. 3: Your title company uncovers an issue
Title disputes can take years and thousands of dollars in legal expenses to resolve, Bourland says. Common title issues range from missing heirs who turn up and claim the house, to an illegal deed somewhere along the chain.
Fortunately, title insurance is required in most transactions to protect you from this kind of thing. But Bourland warns it’s a huge red flag if a title company will not provide title insurance for your property.
Sign No. 4: The house is too unusual
You love an open floor plan. But maybe the previous owner went a bit too far when he knocked out most of the walls upstairs to turn four bedrooms into a massive one-bedroom space. Weird—and yet it does seem like it could be cool and lofty. You know, if you never have kids. Or guests.
“Only buy a heavily customized or unique home if you plan to live there for a long time, and the customization is something you actively like,” cautions Brian Davis, a landlord and real estate investor.
But what if you do love it? Perhaps that castle that looks like it’s straight out of “Game of Thrones” is your thing. Or maybe you love that the living room has been converted into a “Saturday Night Fever”-era disco. But just remember that weird (OK, we’ll call them “eclectic”) properties can be difficult to sell, Davis says.
“Proceed with caution, because finding the next perfect buyer may not be quick and easy,” he says.
Sign No. 5: You suspect your home might be environmentally contaminated
Just like we know that a steady diet of cigarettes, Chicken McNuggets, and Red Bull is unhealthy, we also know a lot more these days about what building materials can cause health issues.
Homes constructed from the early 1940s to the 1970s might contain asbestos or lead-based paint, both of which are responsible for all kinds of serious health problems. Other environmental issues could include a faulty septic system which can contaminate drinking water, or mold issues stemming from building materials such as stucco or siding, Bourland says.
Some of these problems will be hard—and costly—to deal with. It’s better to walk away, and save your sanity and your money.
Sign No. 6: The Neighbors. Are. The. Worst.
So maybe you’re not moving in next to an actual fraternity house, but that doesn’t mean your neighbors don’t party like rock stars. Or have outdoor dogs that are always barking. Or indulge in strange hobbies.
Those terrible neighbors could not only make your life miserable, they could also affect resale value if and when you decide to move, says Evan Harris, co-founder and CEO of SD Equity Partners in San Diego.
Suss out potential problems with neighbors by visiting the house at different days and times, Harris suggests. That way you’ll know if you’ll need earplugs to deal with a next-door band practice on Tuesday nights.
Sign No. 7: You’re not in love with the neighborhood
It’s easy to fall in love with a home and dismiss the concerns you have with its location. Maybe the house is near a sewage plant or waste dump. Maybe it’s too close to a freeway or airport. Or maybe the neighborhood feels just a little too gritty.
Or maybe the location is great now, but is in the path of future freeways, neighborhood expansions, or a new shopping mall.
“What looks like a piece of paradise might be slated to become a concrete jungle,” says environmental designer Pablo Solomon.
Make sure to research the zoning plans for your neighborhood, and always trust your gut if something feels off. You can fix up a home, but you can’t (usually) change the location.
Sign No. 8: You can’t afford it
There’s been that nagging thought that the house feels like a financial stretch, but you’ve convinced yourself you can make the mortgage payments. Even if it means skipping Tuesday night takeout or that weekend getaway in Vegas.
But then you realize that you’re one transmission issue or dishwasher breakdown away from being flat broke.
Of course the best time to do this financial soul researching is while you’re house hunting, but even then you might not have a clear picture of exactly what the financial picture entails. Maybe you’re assuming a best-case scenario that there will be no financial hiccups, or your lender didn’t adequately communicate the exact closing costs or the monthly payment.
It can be hard to walk away—especially if you’ve sold your old house, you’ve already begun packing, and you know you have to kiss your earnest money goodbye, says Todd Huettner, founder of Huettner Capital in Denver.
“But the cost of buying a house you shouldn’t is far higher than the cost of leaving it behind if you’re worried about the payment,” he says, citing worst-case scenarios such as foreclosure, bankruptcy, and decimated credit.
And never buy a property on the assumption that you can sell it if it isn’t working for you, Huettner adds.
“There might not be eager buyers or a conducive market,” he says. “If something’s not right, either figure out how you can make it right or walk away.”