Top seven ways to spot a real estate disaster.
This is a time when the top real estate experts tell you to go buy that bargain real estate. But do they ever tell you to spot that real estate disaster? It’s after all a very deep recession, there will be many properties that are in a state of disrepair or are simply financial traps. Here’s a list of my 7 favourite ways to spot a disaster before you dive headlong into a trap.
1) A large tree growing just outside the house and the basement is wet.
Very likely the basement has been damaged by the trees roots. The sewer is probably backed up and the basement floor may be cracked too. Even the basement wall may be damaged along with the water proofing. Remember, the size of the roots around the house will match or exceed the size of the tree above the ground (Willows are even worse as the roots may extend twice the size of the tree). Simply avoid this house – the repairs can be extensive and definitely expensive.
2) Check for liens on the house.
This is usually of a financial nature where there are unpaid depts. For repairs or loans or unpaid taxes on the property, etc. These will add to the costs of the house after you buy it. But your closing lawyer will have found this for you. Besides, special liability insurance may cover such oversights. However, if the liens are way too complicated and large, pass on the house. It’s the complications that will cost you endless headaches and money. Always buy property that’s 100% clear on finalized purchase.
3) A flooded house in a flood prone area.
This is bad. A flooded house will already be in bad shape. The add to it the prospect of getting flooded again…
4) A badly debilitated heritage house.
These are never bargains. The planning permissions are endless. And everything you do seem to cost 3 or 4 times as much. Enough said.
5) Buy more than you can reasonably afford.
You have a hard time making payments. There are people caught up paying 2 mortgages for whatever reason – buying a second house or getting caught buying a new house while not being able to sell the one they’re living in. You could lose a lot of equity or everything.
6) Roof sagging down with water stains in the house.
A huge repair bill. The house will likely be gutted before rebuilding.
7) Unheated for years.
It may look great – but there will be mould damage, rot, and what not. Invest in a really good real estate inspector if you must try for it.
8) Buying with your heart.
Bad mistake. You’re leaving out your head too. People often use only emotion to buy anything. So you fall in love with the property, but do a thorough price comparison, financing options, and a good inspection before you follow your heart.
So okay, I gave you a bonus #8. But I had to…
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