Whether you’re shopping for a new home, business location, or investment property, you want to feel confident in your choice of real estate. Property listings provide details about the opportunity, but you should watch out for these five red flags.
Few or No Photos
As they say, a picture is worth a thousand words, but no pictures may be worth a million. Property owners and real estate agents want to showcase properties to entice buyers. When a listing has no photos or only shows the exterior of a structure, beware. Chances are that there are issues inside the home, such as mold or damage from fire and water, or the home may be in dire need of significant updates. Also look closely at the photos for signs of enhancement. Images can be processed digitally to make a room look brighter when it is actually quite dark and dreary. You can tell if an image has been digitally enhanced by looking at details that look unrealistic or excessively accentuated.
Short sales can be an attractive opportunity but make sure you do your diligence. A short sale is when the amount of the mortgage exceeds the value of the home, wiping out the owners equity. As such, the sale will have to be approved by the mortgage lender to proceed. In some cases, homeowners stop taking care of the property or abandon it altogether so be diligent about the property’s condition.
Asking Below Market Value
Homes that are listed below fair-market value have typically been on the market for quite some time, or the owner wants a quick and fast sale. If the home has been on the market for awhile, listen to what the market is telling you – something isn’t right with the property.
Flood zones cost you now and in the future. A home that is located in a flood zone is more expensive to insure. Should there be a flood in your area, your homeowner’s policy may have limits so research those in advance.
Multiple Properties for Sale in the Neighborhood
Having a selection of properties in your preferred area is always nice, but there’s a line where the availability of homes for sale becomes a red flag. When multiple homes in a neighborhood are for sale, it typically indicates that the quality of the location is declining. There may be higher crime rates, lower education quality, local economic problems, large commercial projects coming into the area, and many other reasons why inventory levels are increasing.
A single red flag in a property may not be enough to dissuade you from checking it out. However, you should listen to your gut and be extra cautious about purchasing a property with any red flags. Address them head-on to avoid making a big mistake with your purchase.