Buying a home is an action-filled task. The process will pull at your heartstrings, challenge your patience and, of course, impact your personal finances for many years to come.
One of the keys is to minimize costs, but how?
As a first-time homebuyer, you are learning about the process, which starts with getting a pre-approval. Like most home seekers, you may already have targeted your desired neighborhood. These exciting steps also go hand-in-hand with smart financial planning.
Not only do you have to worry about a down payment and budgeting, you'll also have other expenses associated with home buying and ownership. Some of them, like taxes, are predictable, but other costs can appear unexpectedly. Protect yourself from the worst of these unexpected costs by working with your real estate professional to spot red flags. For those new to home buying, part of the process may include an inspection contingency.
Home inspections are an effective tool in locating red flags. With the help of your home inspector – and your own keen observation skills – here are seven red flags to look for when buying a home.
- Foundation Issues
It goes without saying that the home's foundation is one of the most important structures, and making repairs to it can be expensive. The biggest sign to watch for, experts say, is cracking. While smaller cracks in the basement are indicative of cement settling, larger cracks are a red flag. They may signal an issue with the structural integrity of the home. At that point, you may be looking at thousands upon thousands of dollars in repairs.
One way to spot cracks: Unfinished basements are a starting point. Here, you'll get a clearer picture of the home's foundation. If a home doesn't have a basement, doorframes can provide some clues. If the door doesn't close and open squarely with its frame, consider taking a closer look. Unfit doors can point to a larger structural issue. If you're still in doubt, consider hiring an engineer to inspect the foundation. This investment can go a long way.
- Pests/Insect Problems
No one wants to deal with an unsightly pest problem. But the presence of some pests can do more than just send shivers up and down your back. Wood-destroying pests like termites can cause some serious damage to the home. And the bill for fixing the damage could range in the thousands.
One way to spot signs of pests: A termite inspection is the best way to accomplish this. The state of California does not require it before the sale of a property, but your lender might require it. A general inspection, however, can also detect clues of the unwanted pests. If your inspector raises any suspicions about possible pests, ask the buyer about doing a pest inspection. If anything comes up, you have the discretion to ask the seller to cover the costs.
- Freshly Painted Walls
Remember, it is not uncommon for a home seller to prep their home to look its best. This may include a fresh coat of paint on the walls. But a patch of paint inside, or out, can be a red flag. The patch of paint can be a clue of an attempt to cover up damage. The damage can be a wide range of issues, potentially costing you big bucks to fix.
How to spot patches of paint: The best way is to do your own inspection during a walk through of the home. If you notice some inconsistency to the paint, be sure to alert your real estate agent, who will then pass along the information directly to the home seller's agent or note for the inspection. Make sure each room you examine is well lit, and bring a flashlight for closer inspection. Don't forget to look at the exterior paint, as well.
- Questionable Workmanship or Repairs
DIY projects can fun, but sometimes an owner's attempt to make a repair can go wrong. The savvy shopper will look at an amateur project and see a red flag, especially with property flippers, who can put a premium on expediency and who may also lack the experience to make needed repairs.
One way to spot bad workmanship: The best test can be the eye test. If it looks rushed or incomplete, chances are it is. Some of the more common types of quick fixes can be found in the home's plumbing, carpentry and electrical work. Experts say to keep an eye out for leaky faucets, toilets (listen for sounds as well), missing trim work and other projects around the house, including flooring.
- What's That Smell?
When looking at a home, it's not just a foul smell that should raise a red flag – pleasant smells can be a sign, too. It goes without saying that a bad odor can indicate an issue with the home. Don't be fooled by a pleasant smell, as it can be an attempt to cover up unfavorable smells, and bigger issues.
How to sniff out an issue: Look for clues of over-compensation. Did the seller put a deodorizer in every single room? Is every window wide open despite the cold weather? Although these signs do not necessarily always point to an issue, they could be a red flag. Be sure to inquire about the smells, both good and bad.
Mold can be a big red flag. Not only can they indicate issues with the home, such as a leak, mold can also pose a health risk to you and your children. Fixing mold-related issues are also expensive.
One way to spot mold: They can be tricky to find. A home inspection is certainly the most effective way. The most common areas for mold are basements, attics and other wet areas, such as a bathroom or underneath a sink. There are also mold tests that can be done to make a definitive determination on the presence of molds.
- There Goes the Neighborhood
The first six red flags dealt with inside the home, but you will also want to put the neighborhood under a magnifying glass. Survey the area's condition and look for an excess of for sale signs, foreclosures or abandoned lots, which are indicators of stagnant growth and under-performance.
Other things to look for: Visit your desired neighborhood at different times of the day to get a full snapshot of what it's like. During these visits, take notice of vehicle and foot traffic and other potential issues, like noise. You can also search online databases for crime frequency, sex offenders and learn about schools and nearby amenities. While some of these factors may not be an immediate hit on your wallet, they can have long-term effects on the rising equity on your home. And they will certainly weigh on your peace of mind.