09 Feb Four Reasons To Consider Walking Away From A Home Purchase
Buying a home can be emotional and stressful. Often, with so much work and hope put into a property, you can end up making compromises just to seal the deal. But this can lead to a bad buy. Here are a few things to look out for to ensure you find the right house.
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?