5 Warning Signs of a Bad Real Estate Deal
One of the most valuable services that I can provide to you is guidance to you can avoid making a mistake. With experience comes the ability to spot trouble.
And I prefer to let you know at the first sign of trouble, no matter how small it may be. Because it’s best to address it before you get emotionally or financially tied to a property.
So, if I go into devil’s advocate mode, don’t be confused. I am not trying to talk you out of a decision. I only want to make sure you fully understand the situation.
And the potential consequences.
As your agent, it’s our job to read the writing on the wall that can potentially lead to a bad deal. Red flags that make you take a step back to double check your work and think twice about the decision at hand.
I thought it would be a good idea to share the most common warning signs with you because I truly believe that informed clients make better decisions.
Here are five early warning signs of a potentially bad deal
- A price that is well below the market. For a seasoned investor, this may be a good sign. However, a typical, first-time homebuyer is not looking for a major renovation project. Price is the one thing that you can change to overcome any objection to purchasing the home. So, it is highly recommended that you take a look at every potential reason why the home is priced that way. Some of the issues may be obvious, but not all of them will be.
- The seller or agent avoids answering questions where they should have an answer. This is not always a sign of trouble. For example, most listing agents do not have a history of what happened in the past with foreclosed homes. However, any time an owner-occupant won’t answer a relevant question, it should get your attention.
- Homes that have been on the market significantly longer than average. Once again, this does not guarantee a problem. If the home is priced well above the going rate for the area, it’s not likely going to sell quickly. However, if you can’t figure out why it’s been sitting, I recommend that you talk to other agents who live nearby. They have likely shown the home in the past and understand the issues at hand.
- Homes with an unusual ownership history. You can see the sales history in the county tax records or have your agent provide a copy for you. If you see the home turning over frequently and it is out of character for the neighborhood. Or, there are multiple quit claims and foreclosure sales. These signs indicate that more investigation into the home is warranted to determine why it happened.
- When the seller or agent tries to conceal anything. For example, they won't let you see in part of the home until it is under contract, they offer an incentive to waive your right to an inspection, or they fail to provide the required disclosures in a timely manner.
These signs are not proof of problems. However, they should get you to set aside those rose-colored glasses and pull out your magnifier to take a closer look.
What red flags have you seen in the past? Hit reply and let me know!