Have you already decided that a house you found is the home of your dreams? Before you sign that purchase contract and seal that agreement, watch out for these red flags:
- Little to no photos
Sellers know that majority of buyers start their search online. Thus, they post multiple high-quality photos to showcase their homes. But if you see a listing with zero photographs or missing photos for certain parts of the home, something may be amiss.
- Too many houses for sale
Start wondering when you realize that there are too many homes for sale in a single area. The local papers may give a clue on what could have caused the apparent exodus. It could be something like a commercial development or a new highway.
- Psychological stigma
Before purchasing a home, find out if there’s a stigma surrounding the home or the neighborhood it’s in. Stigmatized property is one that has been linked to death, violent acts, drug use, and even a purported haunting or paranormal activity. It may also have been allegedly used for criminal activity and may still attract some nefarious individuals.
The notoriety of stigmatized addresses can have a massive impact on the resale value of the home. Then again, those not familiar with events surrounding a home in Arizona may be tempted to buy it. This is because the state’s laws do not oblige sellers to disclose the following information:
- The home is located in an area with registered sex offenders
- The property was previously owned by an individual living with HIV/AIDS or any disease that cannot be transmitted through occupancy of the home
- A suicide, murder, natural death or felony took place at the property
However, sellers are discouraged from lying or misleading buyers when asked for information, so don’t hesitate to ask questions. You can look up registered sex offenders at the Arizona Department of Safety Sex Offender Database. You can also visit the property and talk to community residents about its history.
- Discounted asking price
It’s not unusual for sellers to slash their prices by as much as $5,000 to$10,000 every quarter or so. But when you see a drastic price drop of anywhere between $20,000 and $30,000, you should take it as a red flag instead of an incredible bargain.
No matter how much you like the property, you and your agent should find out the motivation for the price drop. It could be that a home inspection uncovered serious defects in the property.
- Sold “as is”
The same goes for properties marked, “sold as is”. Find out what’s wrong with the home and why the seller is unwilling to make repairs. The home’s defects may be too costly to repair that the seller no longer wants to deal with any of it.
Find out also how many days the home has been on market, how much the previous owner paid for it, and if there are any impediments to the purchase, like liens.
- Resale value
Homes located on busy streets, leased property, and cemeteries will be difficult to sell. Homes like these also do not appreciate in value as much as other residences with no such issues.
You could make an exemption is if you believe that the property will be your forever home and you’re not concerned about passing it down to your heirs.
- Pending lawsuits
Litigation issues are a major red flag. Check for previous or ongoing lawsuits on the property by calling the county office, checking online court databases or getting in touch with the homeowners’ association (HOA) and the neighboring homeowners.
If there is a pending case on the property, you can use it as leverage in negotiations. If there are serious legal issues surrounding the home, however, you might want to avoid it altogether.
- Ownership issues
When buying a home, find out the type of deed that will be signed over to you and the rights this deed will give you over the property. Make sure there are no liens or vague clauses in the title of the property. Also, check if there are questions surrounding property ownership that you may have to deal with after you make the purchase. See if you can get title insurance that would protect your latest real estate investment.
- Zoning and structural issues
Even if a piece of land has been zoned for residential use, that doesn’t mean that you can build any type of home on it. The community or homeowners’ association (HOA) may have rules and requirements when it comes to square footage, lot size, and home designs. Find out what these rules are beforehand and see if these run parallel with the lifestyle you envision in that potential home.
You should also be aware of environmental restrictions. In many places in Arizona, a property owner is not allowed to damage or destroy a protected area that is located on, or next to, the property. The buyer may even be required to clean up hazardous materials and contaminated soil left behind by the previous homeowner.
If you are willing to gloss over the lengthy and complex legal process that goes with applying for zoning changes and environmental cleanups, then proceed with caution. Even if you’re equipped with the construction knowledge or project management skills to handle these issues, you may still experience delays, high costs, and large losses.
An experienced real estate team can help you look out for red flags when buying a home in Paradise Valley and other communities. Call us, Urban Luxe Real Estate, at 480.359.6519 or send an email to info(at)urbanluxere(dotted)com for professional guidance.