6 Things to Be Wary of In a Real Estate Listing
When you're searching for your dream home, first home, mountain home, or really any kind of home, it's easy to get swept into a vortex of endless listings on sites like Realtor.com, Redfin.com, and Zillow.com. Add realtors emailing you exclusive listings half-a-dozen times a week, going to actual viewings, and preparing paperwork for an offer, and house hunting can feel like a full-time job. The good news? One of the easiest ways to streamline your search is to skip viewing homes that are likely duds. Andy Taylor, GM of Credit Karma Home Andy Taylor, GM of Credit Karma Home, tips us off to six common signs to be wary of on real estate listings.
The listing has limited photos of the home
"If you're in the research stage of the home-buying process, you're likely spending time on sites like Zillow or Redfin to get a better understanding of the type of home you're looking for. You can spend hours scouring neighborhoods and scrolling through professional images taken of homes that have caught your eye, trying to envision the future for you and your family," says Taylor. "Have you noticed that some listings only show a few photos of the home? That can be a red flag, especially if there are few or no photos of the home's interior. A great home listing wants to give off the best first impression, and if you can't get a decent read online, that may be because the home is not in good condition."
You see specific "code words" on the listing.
"Contractor's special," "bring your contractor," and "investor friendly" are just a few that Taylor mentions, noting that "there are many ways of saying that a home needs some serious work." He also says phrases like "good bones" or "tons of potential" imply that the home needs some serious work. "Combine that with a lack of interior photos, and you have a solid red flag if you're looking for move-in ready," says Taylor.
The listing price is not comparable to other homes in the neighborhood.
"Ensuring you get a fair price on a home is almost always a buyer's first priority when shopping for a home. An easy way to understand if the home you have your eye on is priced right is paying attention to home prices for nearby similar homes," advises Taylor. "If the home you're interested in is priced significantly more or less than comparable homes in the area, make sure you understand why. This is why hiring a realtor is a good idea — they may be able to negotiate a price that better matches the neighborhood's market value."
The listing price is lower than you anticipated.
"Is that price too good to be true? Maybe you're working with motivated sellers, or maybe the house is not exactly what it seems at first sight," says Taylor of what can sometimes be a sign that the house isn't a great find. "Before you get overly excited about that great price tag, make sure the quality of the home meets your expectations. A licensed realtor can talk with the seller's agent and see "agent only" remarks not available to the general public — that $50,000 price drop could be due to $50,000 of home foundation damage, so you'll want a complete picture."
The neighborhood the listing is in is full of sellers.
"Do you notice that the home you have your eye on is located in a neighborhood with a lot of other homes for sale? This could just be a coincidence or there may be some less-than-ideal reasons you need to look into. For instance, maybe there's a highway or train station nearby that causes a lot of sleepless nights?" offers Taylor. "I once worked with a realtor who warned me that the home I was looking at was down wind of the county dump. Every day at 4 p.m. you could tell why everyone in the neighborhood wanted to sell. If you notice this trend, make sure your realtor is doing their due diligence to understand why."
The listing has DIY overkill or was recently flipped.
Worth noting, it may still be worth seeing a listing that fits this bill (and of course, some house hunters seek a fixer upper), but if you're looking for a turnkey home, these listings may not be for you. "DIY projects are a great way to spruce up a home for an affordable price, but if you're looking at a home that has had a significant number of DIY projects that have been done by previous owners, that could come with some risk if certain projects were executed amateurly — if shortcuts were taken, that can cost you down the road," says Taylor. (Also worth noting: a web listing alone might not be enough to tell whether a home is filled with DIY updates, so be sure to ask before you set up a viewing if you're not interested in that.)
"This could also ring true if the home was a fixer upper or flip, meaning it was purchased, renovated and put back on the market. This is not to say the renovations were not done well but be sure to inquire for details on the specific updates that have been made. For instance, maybe the previous owners or developer made cosmetic changes but more costly and important home components (e.g., roof, plumbing, HVAC system) still need work," he adds.
Certainly a lot of food for thought for those looking to buy a home right now. Here's to a fruitful — and low-stress — search.