Buying a home is an exciting, stressful and emotional process. Once you’ve gone to lots of open houses and started making offers, chances are you might get hooked on a house or two.
But even when you’re this far into it, several situations can occur to make the deal seem less appealing. It’s tough to reconcile your love for a home with worry that a financial venture doesn’t seem right.
If this happens, you’ll have to seriously consider whether you want to move forward. Here are five red-flag scenarios that should make you think twice about buying the home you’ve got your eye on.
The appraisal comes in below the contract price
In active markets where there can be multiple interested parties for any one home, it’s not uncommon for the bank’s appraisal to be below the contract price. In this case, the buyer might have to bring additional funds to the table, which might not be an option. Or you can try to negotiate with the seller for a lower price.
But with multiple offers, the seller might be unwilling to take less – and why should they, if another buyer is ready to go?
There are other options, like going to another bank and getting a new appraisal, and a buyer who’s been shopping for a while will figure out a way to make it work. But if you’re new to the process and it feels too uncomfortable, you should walk from the deal.
The inspection report shows too many issues
Sometimes buyers who proclaimed upfront that they wouldn’t even look at a fixer-upper home turn around and decide three months later that they’re willing to do work on the house of their dreams.
As they navigate the market, buyers realize where their money takes them, and what they get in return. A great deal in the best neighborhood is probably a deal for a reason. Most likely, it needs work – big time.
While many buyers do change their tune and are open to this, many are not. Consider living through six months of construction, constantly having to make decisions, and managing multiple aspects of the project, on top of having a full-time job.
If it’s not up your alley, it’s time to walk.
You’ve made a compromise that doesn’t sit right with you
The home search starts off with a giant list of criteria, including must-haves and nice-to-haves. But price often determines where you live and what you purchase.
As you get pre-approved for a mortgage and move through the process, you’ll find yourself making compromises. You might have to give up the spa-like master bathroom, a renovated or open kitchen, or your desired neighborhood or school district.
But if you give up on your top criteria just to make a deal work, you might find yourself with a problem. Take a step back, and listen to your gut.
You’ve pushed to the very top of your original price range
After meeting with a mortgage pro, you tell yourself you’re comfortable with $600,000 as the top of your range.
Fast forward three months, and you’re in a multiple-offer situation on an underpriced house at $589,000, and you offer $625,000.
It’s a personal decision, and only you know your true comfort and price limit. You might have left yourself some breathing room in the beginning.
It’s all about compromise. If you don’t feel like you can swing it financially, pull back. Do you want to live in an empty home because you maxed out your budget and can’t afford to purchase furniture or window coverings?
You’re purchasing with another person, and you aren’t both 100% on board
Buying a home is a joint decision for many people. Both parties must be on the same page, or you absolutely can’t move ahead.
Before you start home shopping, talk through your must-haves, wants, desires and needs with each other. Know which compromises are going to be tough, and try to iron them out well in advance.
You can’t control which houses come on the market, but you can control your approach to them. If one party feels the tiniest bit uncomfortable with a real estate deal, it’s time to jump ship.
If you find yourself awake at 3 a.m. wary of some part of your purchase decision, take note. Almost everyone feels uncomfortable at some point, and a certain amount of nervous energy comes with a home purchase.
But know when enough is enough, and be willing to walk away. You have every right to do so. Don’t feel pressure from yourself, spouse, partner or anyone involved in the real estate transaction. You should be happy and excited for the purchase.