Going to open houses is a necessary part of buying a home, but it can also be overwhelming if you’re new to the process or aren’t quite sure about what you should be looking for during the walkthrough. An open house gives you a chance to learn more about a house and see if it would be a fit for what you need, but the open house can also reveal important information that you need to know as a buyer. By learning about the red flags that an open house could reveal, you’ll be better prepared to recognize these potential issues if you see them.
Details That Reveal Hidden Information
When you’re at an open house, you need to be able to read between the lines a little bit to truly understand what the information you’re receiving actually indicates. To start, learn to ask the right questions, such as finding out if the seller is making any disclosures about defects in the house, or asking how long the house has been on the market and whether the price has ever been lowered.
If a house has been on the market for months or years, or if the seller has recently lowered the price, it could indicate that the seller is motivated to sell. On the other hand, if you’re looking at a newly listed house with no price reduction, you may find yourself paying top dollar or even involved in a bidding war.
When you ask the right questions during the open house, you’ll have a better understanding of what you may face if you decide to buy the house. Ask if the seller has done any renovations and when they were completed. Then, follow up with the question of whether the seller obtained any building permits that may have been needed for the renovations, and ask if a professional did the work or if the buyer did the renovation work themselves.
Don’t forget to also ask about the home’s heating and cooling costs. Heating costs specifically can vary dramatically from house to house, depending on the type of heat used, the house’s size, and the quality of the insulation. Reviewing the heating costs from the last few years can give you an idea of what you might expect to pay when you own the home and can help you to tell whether the house is in your budget.
Financial Red Flags
When viewing a house, take a careful look at the costs and everything that you will actually need to buy a house. In addition to a good credit score and steady employment, you’ll also need a low debt-to-income ratio just to get approved for a mortgage. If your debts are currently more than 43% of your income, you’ll need to come up with a strategy to reduce that debt, and that can take time and eat into the money you’ve saved to use for the home purchase.
Those requirements are only part of what you’ll need, though. Once you’re approved for your mortgage, you’ll still need to have enough money saved up to cover a down payment. Don’t forget to budget for closing costs, the cost of an inspection, and your moving expenses. You’ll want to have additional money set aside for any expenses you’ll face right away, like needing to repair or update an appliance, or anything else the seller might not have disclosed.
Be sure to consider what your mortgage payment for that particular house would be, too. You may be approved for a mortgage with monthly payments that are higher than you can reasonably afford. You should decide the top price that you can afford for a house and keep that in mind when looking at homes and making an offer.
Seeing a Home with a Very Different Taste
Buying a home and spending your time remodelling it into just what you want may seem like the ideal way to turn the home into your own, but that only works to a certain degree. If you find yourself viewing a home that’s in an entirely different style than what you prefer, the costs of redecorating and renovating could make what appears to be a good deal into a bad choice.
Remember that redecorating a home requires a significant amount of time on your part, unless you’re able to hire professionals to do the work for you. Removing old wallpaper, painting, retiling, and installing new carpet or flooring takes lots of energy, many hours, and a certain amount of skill, not to mention the cost of buying the materials. If you don’t have the time or budget to do this work, you could find yourself deep into a project that you can’t finish.
Missing the Hidden Costs of Homeownership
During an open house, red flags may be right before you and you might not even be aware of it. Hidden costs of homeownership are everywhere, but you’ll need to be paying careful attention to be able to spot them. For instance, a large, lush yard may look idyllic, but you’ll spend lots of time and money in maintaining that yard. Pools can also be enticing, but they’re expensive to maintain.
Appliances can be another source of trouble. Older appliances may be working fine at the moment, but they can be expensive to repair. When you suddenly discover that your washing machine or fridge is no longer working, you’ll also have to come up with the money for repairs quickly.
To increase your chances of spotting these red flags during an open house, bring someone with you who isn’t emotionally invested in buying the home. An experienced homeowner can act as an unbiased set of eyes to help you see past your own excitement in order to spot potential problems before you put down an offer.