As you prepare to give the GREEN LIGHT to the right property
for you, what RED FLAGS should you look for?
Most things that are wrong with a property can be fixed by spending some
or a lot of money. Not everything can be
fixed, though, and you want to go into your home purchase with eyes open. Be sure that you are equipped to deal with
anything your chosen house might have in store.
Some “red flags” are things that you can’t change about a
house and which will make it more difficult to sell when YOU go to sell;
identifying these tells us that if you buy that particular home, you must get a
*really* good deal in order to make up for the loss in resale value on the
other end.
Most “red flags” I am going to point out to you as we are
looking at property. Here are some of
the things we look at carefully:
- Sold “AS IS” with no disclosure. It’s fine if a seller wants to sell “as
is”. What that means is that they don’t
want to do any repairs. But if a seller
has lived in the home, I want a disclosure.
Even if they “don’t know” the answers to all the disclosure questions,
that in itself is good information. A
caveat here is if the home is an estate sale or foreclosure and the seller has
never lived in or owned the home. In
that instance, I do want them to disclose anything that they do know, but there
is a reason why they might not know anything about the home. Sometimes getting a disclosure is as easy as
explaining to the seller’s agent that selling a home “as is” is NOT the same as
selling a home with “no disclosure”.
- The lot slopes steeply towards the house. If the front or back yard slopes steeply
toward the house, that can signal water problems in the basement or
crawlspace. Proper drainage and
regrading can help ameliorate the hydrostatic pressure of ground water pushing
against the house, but this type of work is usually quite costly. What you look for here is that if there IS a
slope, there is a flat area between the bottom of the slope and the house and
that the water drains around the side of the house and not into the basement or
crawlspace. We also want a grade of not
more than about twenty percent and that the water flow is not directed to the
house, but around it.
- Check crime maps. Now, personally I wouldn’t say that high
crime in a given area should make it a “no go” because there’s crime
everywhere. A police officer explained
to me once that the criminals seek out the most expensive parts of town – why
wouldn’t they? And so even a safe
looking area might have lots of crime, and you want to know about it. Is it a sudden rash of crime or a continual
problem? If there is crime in a given
area, you should be looking for a much better deal than you would elsewhere
and, of course, you will want a good alarm system. There are lots of places online to check for
crime and for criminals – there are sites that track all sorts of crime, and
sites that map the sex offender registry.
Look at them both before you make a decision.
- Building materials that have been the subject of
class action lawsuits:
o
POLYBUTYLENE PIPES: Poly is a form of plastic
resin used in plumbing supply pipes extensively during 1975-1995. An estimated one in five homes built during
that time will have poly pipes. Your inspector
can typically tell you if the home has poly pipes – the supply pipe is usually
grey, and if it is the main line coming into the house, blue. What’s the problem? Over time polybutylene pipes deteriorate from
the inside, and eventually cracks form.
When you have poly pipes, you never know when they might start to leak, so
it’s better to replace them pre-emptively.
o
SYNTHETIC STUCCO: Also known as EIFS (exterior insulating
and finishing system), EIFS was introduced to the United States in 1969. At first, it was primarily used in commercial
buildings until the 1980s, when it was introduced in the residential
market. It has superior insulating
properties, but that is also the problem – the properties of the product that
are designed to keep water from getting into the building envelope make it
difficult for that water to get out once it does get in. With commercial uses, the building envelope
is steel or concrete. The problem in the
residential market is plywood framing, which is a problem when moisture
intrudes, and improper installation.
o
L.P. SIDING: This siding was used extensively in
the 1980s. Louisiana Pacific introduced
this composite siding in 1985 and it was very popular until problems starting
cropping up in the early 1990s. Louisiana Pacific siding is little more than
excess lumber which is ground up, mixed with glue, and run through a press;
this a perfect environment for fungal growth. The problematic fungus was also
part of the package, as it was already present in the wood when it was ground
up. Louisiana Pacific received most of the notoriety for this, but several
other companies also made a similar product with similar problems.
o
ASBESTOS: Asbestos is an excellent fire
retardant and insulator and so was used extensively in buildings in 1940
through 1970. It was then discovered
that prolonged exposure can lead to lung cancer when the asbestos is
disturbed. Asbestos can be found in many
forms – floor tiles, fiber cement siding, linoleum, roof shingles, and HVAC
duct insulation. Generally speaking, the
key is to not disturb the asbestos. The
key to deciding whether it’s a red flag for your purpose is discovering where
and how much of it is in the home.
- FLOOD PLAIN.
Always ask if the home is in a FLOOD PLAIN. If you see a home that you just cannot
believe is in your price range, chances are it’s in the flood plain. There are differing levels of severity; for
instance, the 100 year flood plain means that every 100 years, on average, the
home will flood. A 500 year flood plain,
then, is less severe since the average is every 500 years. But keep in mind that in 2009 Atlanta had a
500 year flood and it could happen again in our lifetimes. In fact, FEMA (the Federal Emergency Management
Agency) redrew and expanded the flood plain maps after the 2009 floods.
The key to identifying red flags and deciding if they make a
given property a NO GO for you is expert advice. Have a knowledgeable Realtor on your side and
always, always, get a thorough home inspection by a certified and experienced
home inspector. Attend your inspection
and ask lots of questions. Know that
properly addressed and accounted for, a red flag property could end up being a
great deal for you. What is a red flag
to one buyer can be a great opportunity for someone ready willing and able to
deal with the problem.
Mary Anne Walser is a
licensed attorney and full-time REALTOR, serving buyers and sellers in all
areas of Metro Atlanta. Her knowledge of residential real estate and her legal
expertise allow her to offer great value to her clients. Mary Anne serves on
the Committee that drafts and reviews the contracts utilized by all REALTORS in
the State of Georgia. In addition, she is a member of the Atlanta Board of
Realtors, the Georgia Association of Realtors, the State Bar of Georgia and the
Georgia Association of Women Lawyers. Contact Mary Anne at 404-277-3527, or
via email: maryannesellshomes@gmail.com.
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