Buying a house is one of the biggest purchases we will make in our lives. So it’s understandable that we want to get it right the first time. Even if the house you’re considering seems like it’s a great deal, you may accidentally buy the wrong property for your forever-home. Here are 10 big red flags to watch out for before you commit to buying a house.
Red Flags to Look Out For When Buying a Home
10. Closed Businesses & Empty Storefronts
After the financial crisis and current events, it is all too common to see stores shutting down across the United States. Hopefully this will be temporary, but with so many businesses closing for good, this just might be the “new normal”. After the 2008 recession, many towns began to bounce back with new life. In 2020-2021, we have a similar issue with many businesses shutting down because of the global crisis, and the economy. However, even in the recent crisis, many of those vacated properties were quickly bought up by more successful businesses.
Never assume that close businesses in a town are only temporary. If you see a lot of closed shops in town, this may be a sign that the local economy will continue to suffer for a long time. Even if you plan to commute to work and do your shopping elsewhere, these towns may have a higher crime rate, poverty, and generally poor infrastructure. For example, in my local area, a lot of businesses like GNC, Game Stop, and Kmart shut down. But that space was quickly purchased and replaced with businesses that are booming right now like Marshall’s, Big Lots, and Chipotle. If it’s a good area, businesses will always want to open there.
9. Loads of Houses on the Market
In 2020, we had a lot less houses on the market, because people were choosing to stay in one place rather than taking the risk of selling their home. Many people also took advantage of refinancing their mortgage. This made housing prices go up. People were also leaving large cities, so houses in suburban areas were flying off the market. There is a good chance that in 2021, we are going to see a lot more houses on the market than last year. But at this point, it’s difficult to tell.
In the past, the rule of thumb was that if a town has a lot of houses on the market all at once, you have to wonder- Why are they leaving? Before you commit to moving to a new town, check the news to see what has been going on in that local area. You may discover that there was an increase in crime, riots, or some other serious reason why people are leaving in droves.
8. Badly Maintained Homes
On Fixer Upper, they often give the advice that you should find the “worst house in the best neighborhood”….And you should never do it the other way around! If you find the best house in the worst neighborhood, you are probably in serious trouble.
Badly maintained homes are a sign that the owners can no longer afford to take care of their house. This may mean that they will end up foreclosed and abandoning the home, which will bring down your property value, as well. If a house becomes abandoned, it will also become the perfect place for locals to do illegal activities inside. This could be very dangerous for your children to be exposed to, and it increases the odds of a break-in.
7. School Graduation Rate Drops
In the past, I recommended that parents should check for school enrollment rates. However, with more parents choosing to homeschool their children than ever before, it’s not fair to judge a town based on those statistics any longer. Now, you need to do some research to see their policies with safety regulations. The principals and superintendents of the school decide the policies, rather than the state government. So you could have two schools in the same town with totally different rules surrounding Covid-19.
Also check out the High School graduation rate in the area. Even with the difficulties happening right now, students should be even more motivated to finish school, even if it’s done online. So if you see that graduation rates have dropped, this is a very bad sign. Keep in mind that graduation and going onto college has a lot to do with peer pressure and the expectation of the local community. If dropping out of High School is “normal” in that town, it’s likely that your own children would be surrounded by bad influences.
6. Industrial Areas
Be extremely careful with buying a house that is near an industrial area. You never know what kind of harmful chemicals or waste may be lingering in the air. Historically, living in an industrial area is known to be bad for your health, and more people tended to catch diseases compared to non-industrial areas. It often has bad living conditions, and can be a lot dirtier than residential areas, too. The situation becomes a lot worse if it is situated near a chemical or nuclear power facility.
Aside from pollution, being near an industrial area can also be horrible if there would ever be a natural disaster like an earthquake or tsunami that could damage the safety of the factory.
5. Little-to-no Parking
If you do not have your own driveway, or you have more than one car, it may become necessary for you to find parking on the street. Take a drive around the block during busy times of the day. Is there anywhere to park? Are you going to have to walk two blocks down the road to your own house? Some jurisdictions also have strict rules about only parking on one side of the street, and being exactly one foot away from the curb. It would be terrible to receive parking tickets right outside your own home.
Also keep in mind the potential of having a growing family. For example, you and your partner might get along just fine with one parking space. But what’s going to happen if you need to buy a second vehicle, or your child will grow up to want their own car? Ask yourself if it works long-term.
4. Strict HOA Regulations
Even in a well-manicured community, there still may be issues. Some developments have a Home Owner’s Association, or “HOA”, which sets rules and regulations for everyone living in the area. Typically, they have rules that everyone must mow their lawn, and they cannot paint their house an abnormal color. Sometimes, this can be a very good thing. It guarantees that your neighborhood will always look pristine.
However, some Home Owner’s Associations are far too strict. For example, some towns have rules against planting “too many roses” or that people have to carry their dogs instead of walking them on a leash (yes, even if they’re large.) It also puts stress and financial pressure to get projects done on a regular basis, no matter what your current situation may be. There are a lot of horror stories out there about dealing with an HOA, and it may be better just to avoid them.
3. Local Crime Rates
When you buy a home, you really need to consider security. If you buy a house in an area with a high level of crime, you just may be asking for trouble. No one wants to raise their child in an area where they are more likely to encounter violence and substance abuse. If the house you are considering has been sitting on the market for a long time, chances are that people may have broken into the basement to steal the copper piping. Before you even think buying a house, always check out its crime rating on Neighborhood Scout.
With that being said, a community that is being gentrified can be a good thing. Signs that a community is about to be gentrified are building a new coffee shop, microbrewery, and newly renovated properties.
2. Abandoned Houses
If you see an abandoned house on the same street as the house you are considering, this is a huge red flag. Whenever a house has been sitting for a long time, this can bring down the property value for the rest of the neighborhood. It also becomes a hotbed for illegal activity. It can also be dangerous if you have young kids who may be curious about exploring inside.
Even when a new investor or buyer comes along to rescue the property, it can take years before it’s ready to be inhabited again. I can speak from personal experienced. The house across the street from my parent’s house was abandoned for years, and attracted curious people to stop by and peek inside. There was a lot of vandalism by teenagers. When it was finally purchased by an investor, we had to hear loud construction for over a year. Now, there is an ongoing stream of cars coming and going for months on end while the real estate agents try to find a new buyer.
1. Railroad Tracks
Houses that are situated next to a train track are always cheaper, for good reason. Trains usually go by at least once or twice a day, and sometimes in the middle of the night. For anyone who lives near the tracks, they already know that the loud noise and vibration from the passing train is enough to drive you crazy. If you want peace and quiet, try to live as far away from the tracks as humanly possible.