Buying a home can be complex. Between researching neighborhoods, looking at houses, and obsessively imagining possibilities, fatigue could cause you to ignore some pretty glaring problems.
Since a house is likely the biggest purchase you’ll ever make, we’re here to help you with a few ideas about when to walk away from a deal. Welcome to Covered’s compendium of the top five deal breakers when buying a home.
1. Wrong Place
What are your priorities in a neighborhood? Walkability? Stores nearby? Are you starting a family and needing to seriously consider school districts?
Everyone has their own factors when it comes to choosing a neighborhood. But it’s important to set some hard limits on what you are and aren’t willing to accept. One home buyer tells the story of checking out a potential neighborhood and finding a dead pet in a nearby alleyway. That was a bright red uncrossable line for him — because if neighbors can’t be bothered to report dead animals in the street, what else will they ignore?
2. Prone to Flooding
Insurance companies deal with a TON of water issues in homes. That number only seems to be rising. Also, changes could be on the way for federal flood insurance. So it may be wise to steer clear of homes susceptible to this growing concern.
3. Wrong Price
Naturally, price is a huge factor in buying anything. But with a house, there are a number of extra variables.
For example, if you win a bidding war, you need to make sure you can still afford the offer — and that includes taxes and fees. You also want to make sure you avoid going on a spending spree for furniture or racking up credit card debt in advance of buying a home, as these could lower your credit score and cost you a more favorable position at closing.
Of course, price is also a factor in choosing your location (see above). For some home buyers, it may be preferable to move into a neighborhood that’s less expensive but has potential.
4. Too Many Issues
Speaking of price, another factor revolves around what turns up in your home inspection. Before you can close on your new home, your bank will want to make sure it’s making a sound investment… hence the requirement to have the home inspected.
If the inspection uncovers that a house needs a new roof, new electrical wiring, or termite mitigation, the additional cost could be a bargaining chip. Alternatively, it could be a reason to walk away.
Whether you should bargain harder or walk away varies based on your budget. Sure, termites can be eradicated, but what about the damage that was done? You can put air conditioning in an older house for a few thousand dollars, which can be rolled into your mortgage — but does that put you over budget?
One or two of these problems may be okay. But if you add in mold or a broken foundation, you could be talking about five-figure updates.
5. Title Concerns
There is one major concern that trumps all others, and that’s ownership. Title search and insurance may seem backwards in the age of digital records. But the fact is that not all records are online. Murky titles do happen, due to issues with contractors, governments, or even a disputed will. Do you really want to buy a house when it’s not going to be clear that you genuinely own it?
Better Safe than Sorry
These deal breakers are some of home buyers’ biggest and most common worries when buying a home. Because the real moral of the story is that there are home buying situations in which you may want to count your blessings and move on to another location.
And remember: Home buying shouldn’t be rushed, even when you’ve found what you think is the perfect place. (Of course, that’s part of why you buy insurance!) Still, given the time-intensive process of buying a home, you’re better safe than sorry when it comes to signing on for years of issues that could have been avoided. So before you start looking at homes, figure out what your deal breakers are. Don’t compromise on the things that really matter.
Weighing the pros and cons of a home buying purchase — and want to find out how insurance will fit into the picture? Give us a call at (303) 302-9927 or drop us a note. We’re happy to help.