When to Walk Away From a Potential Home
Whether it’s a bag of chips or a lousy boyfriend, sometimes it’s hard to walk away. Even when the red flags are there, when you know something isn’t good for you, when you just have a gut feeling—well, it can still be tough to let go. And when hundreds of thousands of dollars and a roof over your head are at stake, it’s even harder.
If you’re lucky during a house hunt, you won’t be put in a position where you need to walk away (I was fortunate I never experienced this—a large part of the reason my house hunt only took six weeks). Maybe you’ll get a sign right when you walk in: One house I toured had obvious structural issues, and I knew better than to put in an offer given my personal quest for a largely turn-key property compared with a fixer-upper.
But maybe you’ll find a home that looks and feels great on the surface. Maybe you’ll put in an offer, and maybe you’ll run into problems during the inspection. If this happens to you, know two things. First, you’re not alone. A lot of people have had this experience. Second, you may need to walk away.
“We typically believe that we can salvage any home sale,” says Lexington-based longtime Realtor and broker Ron Humes, now VP of operations for Post Modern Marketing. “If we have a willing buyer and a willing seller, all is good, right? There are occasions, however, where it is better to count your losses and walk away.”
So, what are those occasions?
“Home inspections may be expensive, but they are also one of the best ways to ensure you are not making a huge purchasing mistake,” Humes says. While most issues inspectors discover are simple and relatively inexpensive to correct, others are either too expensive or even impossible to truly resolve.
According to Humes, seriously compromised foundations and other structural issues are a huge red flag.
“On occasion, there are extreme structural defects that force us to recommend a buyer to walk away from a purchase, and a foundation issue is one defect that may fall into that category. Seriously compromised foundation walls can require the entire home to be lifted, earth removed, a new structural wall to be constructed, the home secured on the new foundation, and the earth replaced and graded.”
Translation? Prohibitively expensive. According to Humes, during a walk-through or open house, look for settlement fractures and shifting in foundation and interior walls, which are a telltale sign of structural issues.
Recently, Aghzafi represented a buyer when an inspector found polybutylene pipes inside the house, which were discontinued during the 1990s.
“In this instance, the risk of having a plumbing system that could fail and need replacement far outweighed any dollar amount the buyer and seller were willing to negotiate. The buyer did not go through with the sale.”
More obvious, immediate water damage is another sign to walk away, according to New York City-based broker Alan J. Sands, who speaks from personal experience.
In late August 2010, he entered into a contract for a new-development townhouse in the Santa Monica, California area. At the time, everything was fine—but then he went back during Labor Day weekend to oversee the inspection. Despite Santa Monica’s perennially sunny weather, it had rained three days prior to the inspection, something Sands considers divine intervention.
“There were puddles everywhere inside,” Sands said. “We, needless to say, got out of the contract. Sometimes you do just have to move on.”
Sands suggests visiting your prospective home at different times and days. In his case, this had the added benefit of him realizing the congested traffic of that very same townhouse. “Know your area—and use an experienced real estate agent,” he says.
Aghzafi always makes sure his clients use a reputable inspector who is bonded and insured. He says homebuyers, with the help of their real estate agents, should “look for companies with ASHI certified or InterNachi Inspectors.” Once you’ve got the report in your hands, don’t be afraid to ask questions, he says, especially since some sections of the report are likely to be unfamiliar territory for most homeowners.
“A good inspector may offer advice on what issues to prioritize, whether or not to have an expert look into the issue further, or what the potential cost of the repairs could be,” he says.
Tampa-based marketing professional and licensed Realtor Devin Beverage recalls the time a client’s inspection went from A-OK to an inspector finding a loose floorboard on the porch, ultimately revealing that the house was not structurally sound. He sums it all up like this:
“Structural repairs turn a minor fix into a huge deal—and they have the price tag to match."
According to Humes, while structural issues stemming from inspections are a common theme, there are other deal-breaker scenarios, such as difficult-to-resolve easement issues (the right to use someone else’s land to access your own, or vice versa, for things like utilities). He also suggests checking out your potential neighbors—even if those neighbors are an empty lot for the time being.
“While there are many things a buyer can do to fix the property they purchase, they can’t count on correcting the junkyard next door, the busy street, or the zoning changes coming across the street. If the problem is serious enough, it can have a drastic effect on the current or future value of the home and may be best to avoid.”
Moreover, if a property is adjacent to a vacant lot, Humes suggests visiting your local planning and zoning office to gather information on any future land-use plans.
On the flip side, though, the neighbors can be your ally, says The Key Resource founder Kendra Barnes.
“Talking to neighbors when buying a house is crucial!” she says. “You'd be surprised at how much you can learn just by introducing yourself and asking them what they know about the house you want to buy. If they give you some information that's unsettling, it might be time to walk away.”
Another non-inspection issue is the appraisal, Barnes says. Sometimes, an appraised price comes back lower than the sale price the buyer and seller agreed upon. “If the seller won’t agree to lower the price and you can’t afford the difference, this may not be the home for you,” she says.