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Financial Tips

Home buying red flags and mistakes

Like buying a car, you need to look out for lemons when buying a home. You can fall in love with a home initially, but unforeseen problems can come up that might cost you thousands in repairs. Here are two pointers that can save you and your wallet a headache!

Don’t be afraid to get an extra inspection or two

Hiring a professional to perform a home, electrical or pool inspection may feel like overkill, especially if the property already has a recent inspection report purchased by the seller. But the extra peace of mind and validation never hurts. There may be issues and potential big money fixes that are hidden away under the surface that the initial survey didn’t catch, and an extra inspection can save you from a nightmare home. Some areas to pay extra attention to are:

  • Roofs – Though people don’t generally even think about the top of a house, roofs have a lifespan and at the end of it, it can be one of the priciest repairs on a home. Roofs have lifespans ranging from 12 to 30 years depending on the material, and can cost around $30,000 to replace.
  • Pavement – There are multiple ways pavement can become a liability anywhere on the property. Small cracks can turn massive after enough time and can lead to issues as small as tripping hazards to as extreme as compromising the foundation. Most foundation repairs cost on average $4,500 nationally and severe damage can cost as much as $25,000.
  • Lead-based paint – One of the first things you notice in a house is how good or bad the paint looks, but you can’t tell what’s in the paint. If you buy a home that was built before 1978, there’s a good chance the paint is lead-based. Slapping a coat of non-lead paint over the old paint doesn’t fix the problem. Lead is a known carcinogen and should be taken care of immediately to avoid any health risks. Lead abatement (lowering the amount of lead to a safe level) can cost up to $3,000 and complete removal of lead can easily go over $10,000.
  • Popcorn ceilings – Older homes also might have popcorn ceilings with asbestos that should be professionally removed. Asbestos is also a carcinogen, and it can cost thousands of dollars to remove a popcorn ceiling and ensure the asbestos particles aren’t left behind.

These are just a few examples of extra inspections you can get for your home to stay protected, but the rule-of-thumb is to pay attention to anything that makes you feel uneasy or could be a potential hazard. Hiring a professional for a small fee to check before you finalize the sale can save you huge costs in the future.

Watch out for sneaky language

Just like someone selling a car says “OBO” (or best offer) means they’re anxious to get rid of it, there’s a lot of hidden meaning behind the language used by sellers. Here are a few problematic phrases to look for:

  • TLC – Usually a home listed as TLC (tender-loving care) means that it’s in poor condition and will need a lot of work to make it livable.
  • Great for a first-time homebuyer or investor – These homes are generally not very pretty but they’re livable, with outdated appliances and technology. You’ll need to put in plenty of sweat equity to get the home up to modern standards.
  • Cute – The house is tiny. Tiny to the point where you’ll notice it and if you have an expanding family or live with more than two people, it might be a bit too cozy.
  • Contractor Special / Fixer Upper – These properties are not passing health and safety certification for whatever reason. For someone who wants to buy a “project house” to repair and make into your own, this could be an option—but know it most likely will not be in a livable condition.

Just like any large purchase, the devil is in the details. Taking a bit more time to go through the fine points and look for the little red flags in a listing can save you from a world of headaches in the future! For more tips, articles, and online learning modules, visit our Mortgage Resources web page.