With the booming real estate market in 2022, it may seem like a miracle when you stumble onto a deal. You may find a listing for the home of your dreams with your shiny white kitchen and wrap-around porch in the perfect, quaint neighborhood. But do not be blinded by the aesthetics as you rush to finalize your deal. Whether it is a competitive market or not, you do not want to lock in a bad real estate investment.
In this competitive market, many potential homeowners are expected to skip the inspection and appraisal process. This is because there are so many buyers – those steps are moot points, right?
7 Red Flags Pointing to a Bad Real Estate Deal
Watch for these signs of a bad investment as you search for homes to live in or use as an investment property.
1. Too Good to Be True
If the property is listed at a significantly lower price than the comps in the area, there is a reason why. You did not stumble upon the only seller that does not care about making money. Ask the hard questions and find out why there is a price discrepancy.
2. Bad Location
Maybe the property is right by train tracks. Or perhaps it is far removed from nearby businesses and convenience stores. Always visit the address to find out if the location will help the home appreciate in value over time.
3. Missing Details
Look into square footage calculations that don’t add up to the value listed. Maybe there is a missing bedroom that was not done according to code. Is the survey of the property provided?
4. Overwhelming Amount of Repairs
There is a difference between a fixer-upper and a home that is unlivable. If you are overwhelmed with the amount of money you’ll need to put into the home, maybe it is best to walk away.
5. The Bones Are Not Good
Check for essential elements of the home to be in good shape. Is the foundation sound? Has the roof been updated? Did a reputable builder work on the house? Check all of these boxes before investing in a property.
6. High Crime
When it comes to resale and rentals, you want to buy a home in a neighborhood where people feel safe and secure. We would encourage you to do your own due diligence regarding crime.
7. Less Desirable Schools
Even if you don’t have kids going to the public schools in the area, the surrounding school ratings are a huge draw or deterrent to potential buyers or renters. Think about the future when you are looking into buying a home.
There is so much pressure to find a property in this market. So when you find a home in your price range that checks your boxes, you may be tempted to jump on it before anyone else can make a move. Be sure to find out if the investment is really something that will pay off for you in the long run. You don’t want to be stuck buying a lemon just because you acted fast and avoided a bidding war.
Make Your Investment Count
The thing about a bad real estate investment is that you are stuck with it once the papers are signed. It’s not something you ever want to rush into. Now that buyers are effortlessly waiving inspections and appraisals to get a leg up in the bidding war, it has become even more important to protect yourself from getting stuck in a precarious situation. Set yourself up for success by looking out for these red flags.
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Questions about real estate?
Do you have questions about the real estate market or the market changes in your region? We are standing by to help and answer any questions that you have. If you are unsure if it is the right time to sell or buy, you can seek help from experts who know the market. You will be advised on what the right move is for your family's situation. If you are on a time crunch, you can seek counsel on how to best navigate the sale of your home during a buyer’s or seller’s market
At Blondin Real Estate we are always here to help, contact us!