Purchasing real estate is one of the largest investments one can make in their lives. Being a tangible asset that may break your bank or give you a passive source of income, real estate is worth the investment as the years go by. That is, if you are careful with your property purchase.
Whether the property is brand-new or foreclosed, buyers must thoroughly inspect them and negotiate with the seller before depositing the money and signing the necessary documents. Pay attention to these four red flags that may lead to lots of stress during the house purchase.
What are the financing options available?
Most of the time, buyers are offered various financing options to purchase their dream home. For example, if a buyer wants a condo unit at Urban Deca Homes in Tondo, Manila, they may choose to pay the full price if they can afford it, or apply for a home loan through a trusted bank to finance their investment. For foreclosures, banks that have acquired them may offer them for lower prices and other financing options. In other words, different financing methods allow buyers to assess their buying capacity and purchase properties without shelling out a fortune. Likewise, banks get to keep track of the borrower’s credit and payment status.
Why did the property’s price change?
It is no secret that previously-owned properties are a lot cheaper than brand-new ready-for-occupancy housing units. Pre-selling properties also change in price as the development nears completion. This is why real estate experts suggest buying during the pre-selling phase, to take advantage of lower prices.
However, if a property has experienced a sudden price drop that has nothing to do with its stage of competition, you may want to ask the broker or owner why. The seller may need the cash off the sale for an immediate need, in which case you may suggest your final offer and get a good bargain. For properties like this, always do your due diligence in checking the unit for any signs that the property could be a money pit.
Who previously owned the property?
As a buyer, you’d want full disclosure on the condition of the property you are eyeing. You might want to ask the seller for a disclosure form stating the house’s or condo’s electrical, structural, and plumbing status. Ask about the previous tenants in the property, so you will have an idea of their activities indoors. For example, a family with kids may have had no time for upkeep, while a young professional may have been meticulous with their use of electrical appliances.
Also ask for information such as potential pest or mold growth, harmful materials used during construction, or strange occurrences that point to a haunted house.
What needs to be fixed?
Because real estate investment requires a lot of money, some seekers resort to remodeled houses or foreclosures sold in the market. These properties are offered at or below market value, making them suitable for those who want to save money and the chance to renovate and refurbish their new home.
When touring a foreclosed home, the first thing you’ll check is whether it is spacious and fits your budget. Sure, a few scented candles and soothing music give a relaxing ambience, but don’t let these distract you from examining the property thoroughly. Check all spaces and corners to see whether there are unpleasant parts that don’t appear in the photos. You might also want to move furniture pieces to check whether it covers a large hole or ugly cracks on the walls or floor.
Make the right choices in your investment. Whether you are buying a brand-new home or a foreclosure, it is important to ask the right questions and to do your research on the property, its condition, and the seller’s credibility.