Reality check: it’s quite possible that the perfect home doesn’t exist. There’s always going to be something that gives you pause: you’d rather have hardwood floors than carpeting, the neighbors look like nosy people, there’s not a walk-in closet in the master bedroom, the garage could be bigger, you’re too far away from your family – or too close to your in-laws.
These probably shouldn’t be make-or break-factors. However, there is one reason you should always walk away from a home sale even when the house has dream-home potential: and that's when the house has a 'money pit' problem.
These are the types of issues that can turn the home into a financial burden (even if you got it under market value) and make you truly experience buyer’s remorse. According to our experts, these are some of the warning signs you need to heed.
- See also: Housing market forecast: Home values rise among shrinking supply
The top home problems to walk away from
We rounded up the team at Warburg Realty in New York to discover the top problems that you don’t want to handle as a new homeowner.
“The number one reason to walk away from a home sale would be black mold, which is toxic and costly to get rid of,” says agent Mihal Gartenberg. And it could be growing (and hiding) anywhere, like under that poor paint job in the kitchen or bathroom, or on exposed foundation walls. Black mold can cause health problems ranging from sneezing, coughing, and eye irritation to more serious conditions.
To broker Bill Kowalczuk, signs of water damage should be a deal breaker. “A tiny little drip can end up destroying a wall, or more, over time,” he says. “If you see or sense any recent damage from water – run.” Agent Parisa Afkhami agrees that leaks or plumbing issues should make you seriously reconsider buying the home. “In my experience, it is very difficult to pinpoint the cause and location of a leak and therefore to remedy it,” she says. "The damages resulting from leaks can also be quite costly to the dwelling, but also can lead to mold growth and often are not covered by homeowners insurance.”
In fact, agent Karen Kostiw warns against any huge expense that is beyond your budget. “A home may require a new roof, or an expensive asbestos clean-up, or electric or plumbing that needs to be updated.” And all of these fixes can leave you house poor.
How to avoid these homebuying pitfalls
The best way to avoid ending up in a situation where you regret the day you ever laid eyes on your new home is to get a thorough inspection. In fact, according to Brett Ringelheim, real estate salesperson at Compass in New York, NY, you should never sign any contracts until you get an inspection.
“The inspection will tell you everything you need to know about the house, and if there are certain items that come back and need to be fixed, find out how much it will cost to make the repairs,” he advises. If those fixes are expensive, he recommends moving on to a different property. “You're already spending so much money purchasing the house that you want the process of moving in to be as simple as possible.” Plus, he warns that repair projects are sometimes much bigger and more expensive than expected. Often, reality TV shows paint an unrealistic portrait of these fixes. But how many times have you heard the contractor say, “Well, once we opened up this wall, it turns out that the problem is much bigger than we thought.”
The one exception?
Candice Williams, a real estate agent at Re/Max Space Center in League City, TX, believes the seller’s response should be the determining factor in whether you move forward with your purchase if the house needs big repairs. If the seller agrees to fix major issues for you, this may be a reason to still consider the house. If so, you need to get another inspection after the repairs have been completed.
“However, sometimes, the seller is unwilling to repair the home and also unwilling to reduce the price to cover the repairs,” she explains. "Homeownership is already a big responsibility and major issues will only compound it.” So her advice is to walk away if the seller believes repairs are your problem.