Buying a home is an exciting time. When you walk into a house that feels just right, it’s easy to get swept up in the feeling like you’ve finally found “home.” However, a house that looks great at a glance can turn out to be a money pit if it has one or more of a few main, expensive problems. But before you, as a first-time home buyer get carried away and make a rash purchase (because it’s a big one), you have to make some practical considerations. Five home-buying warning signs to keep an eye out for:
1. Flood zone
Maybe that nice waterfront view seemed like a big selling point, but if the home you’re looking at is in a flood zone then you’re facing the possibility of big problems down the line. And that’s if you can even afford the flood insurance you’ll have to get now.
Most homeowner’s insurance policies don’t cover flooding and your bank will likely require that you invest in a flood insurance policy on top of home insurance in order to qualify for an adjustable-rate mortgage on the property. The best-case scenario is that you pay for that extra policy and never need it, but of course if your home does flood, then you’re stuck dealing with the damage, and having to replace a lot of your stuff. Either way, the home’s going to be costing you in monthly payments much more than you bargained for.
2. Foundation issues
Foundation problems are among the most expensive home repairs . Worse, according to The Zebra’s licensed insurance agent Neil Richardson , they’re not usually covered by home insurance policies. His real estate advice to first-time homebuyers: “make sure that the foundation of the home you’re interested in purchasing is in good shape before actually buying the home. If not, you could be faced with a huge repair bill that you’ll have to pay entirely on your own.”
When perusing the home, keep an eye out for cracks in the walls, doors that don’t seem to quite fit their frame, and sloping floors. These are all telltale signs of foundation problems that can cost you big. And of course, be sure your home inspector examines the foundation closely before the closing costs come in.
3. Plumbing problems
Plumbing problems are another big, expensive headache you want to avoid. Old, leaky pipes aren’t easy to spot, so you have to look for other signs that a home’s plumbing system may not be up to snuff.
When you’re touring a home, it’s a good idea keep your eyes and nose on alert for musty smells and stains on the wall or ceiling that could be mold or mildew. Check the kitchen and bathroom sink cabinets to look for signs of leaks. Turn on each of the faucets to see if you notice low water pressure, any knocking noises, discoloration of the water, or slow draining.
If you notice any of these signs of potential plumbing issues, talk to a plumber about what they likely mean and how big of a problem you’d be looking at. If it sounds like you’ll be dealing with costly repairs, think twice before you make the first down payment on your new mortgage.
4. An Old Roof
According to Neil, an old roof is another issue that can cause major insurance problems.
“If the roof on the home you’re considering is more than 15 years old, you may face a higher insurance premium, or some insurance companies might not want to insure that home at all,” he said.
Insurance companies are concerned for a reason. The roof is the main point of protection your home has from the elements. An old, damaged roof can lead to serious water damage when it rains, or it could even cave in on you as you’re sitting at the kitchen table.
The seller should be straightforward about the age of the roof – so ask! – and you can look for cracked or missing shingles during your walk-through to get an idea of how likely it is to have issues.
If the home really does seem just right for you in spite of the roof, Neil recommends getting an insurance on the home before submitting an offer to buy it through your real estate agent. This way, you can understand what insurance rate you can expect if you do indeed start the buying process.
5. The price is a little too right, Bob
As with most things in life, if the deal on a piece of real estate you’re interested in sounds too good to be true, it probably is. That advice goes double if the buyer’s listing specifies that it’s for sale “as is.”
A home that’s selling for under market value, or purchase price, is discounted for a reason and you need to do some digging to figure out what that reason is. It could be a reason you’re ok with like a needed repair you feel confident you can handle (if you’re a self-made millionaire), or it could mean the house is besieged by termites and will fall apart on you soon after purchase. It’s more than fine to be skeptical in these cases, so go in assuming something’s wrong and don’t make an offer until you get an answer from the estate agent as to what it is.
If a house really is a shack and your bank feels your take-home pay may not cover a monthly mortgage payment and all the refurbishing required, then they might require you to get mortgage insurance. In short, it protects lenders (i.e. the bank) if the owner (you) cannot make your house payment on time. So while a house may feel right, the price (in the long run) may not be.
Your house should be a place you can count on for comfort, not something that stresses you out and empties your bank account within months of moving in. Always make sure you do a inspection before committing to buy a house, but trust your inspection, too. A little due diligence and attention to detail can save you from the stress and cost of a mortgage that only seems like your dream home on the surface.