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Experts Warn Homebuyers of Red Flags Beyond Climbing Interest Rates

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Over the past two years, housing across the country has been a frenzy, with sellers often taking tens of thousands, and sometimes hundreds of thousands, of dollars above the asking price.Buyers often abandon test And, desperate to secure that coveted single-family home, picked up a portion of the seller’s expenses.

Although the landscape is now changing because it is higher, degree of interestthe bidding war is still ongoing in many parts of the country. housing prices No sharp decline yet. With inventories still lower than usual, many buyers are coveting a piece of the American Dream.

But some experts caution would-be homeowners about jumping right into the homebuying pool without doing their homework first.

“Listing prices are still high, and combined with rising mortgage rates, people will overpay for their homes,” said Andre Stewart, CEO of InvestFar. real estate It is a marketplace and database company, he told the Epoch Times. “It’s important that they review their budgets and make sure they’re not scratching their heads.”

In today’s market, the average homebuyer can expect to pay up to 25% more than they did a year ago.

“If you’re buying a home to live in for a very long time, that’s fine, but most people live in it for five to 10 years and then resell it,” says Stewart. “You want to make sure you make a profit on that sale.”

Stewart, author of “The Real Estate Investing Diet,” advises potential buyers about other often-ignored “red flags” of home buying.

“During the pandemic, many people were buying invisible properties and skipping inspections,” he said. “Even in brand new housing developments, getting a home inspection is very important.”

A six-bedroom, three-bathroom single-family home in Tampa, Florida is listed for $600,000. (Courtesy of InvestFar, Los Angeles, CA)

With new construction costs skyrocketing, Stewart warns that some new developments may not be completed as expected.

“There have been situations where people have bought a house thinking a garage door would arrive after they moved in, but it never ended,” he said. So homeowners have a complete punch list of items that need to be completed before the property closes.”

Even luxury homes can have hidden problems such as mold, he added.

Mark Aakjar, owner of Mark’s Inspections, has been servicing the New York metropolitan area for the past 14 years.

“Mold is now the same as asbestos 15 years ago,” he told the Epoch Times. “Mold can grow anywhere. It’s a matter of type and quantity. Some people have no reaction, while others suffer from allergies and severe respiratory problems.”

Aakjar noted that mold may not always be visible.

“If you inspect a Manhattan apartment on the top floor of a 30-story building, you may not actually see any evidence of mold, but an air test will show that it is present. We have to start looking for it,” he said.

As for new construction, he cited other common problems such as small boilers and air conditioning units, inadequate insulation, poor quality windows and cracked foundations.

As a real estate finance expert, Michael Gifford warns potential homeowners to exercise caution before making what is likely to be the biggest purchase of their lives. He is the CEO and co-founder of his Splitero. Splitero offers the option of accessing home his equity without incurring debt or additional monthly payments. The San Diego-based company offers cash to homeowners in exchange for a share of their home.

“I know there’s still an urgency for people to want to jump into the market, but they have to make sure they’re in the right position for the future,” he told the Epoch Times. “And if they decide to move on, they always want to have their home inspected so they can understand exactly what they’re buying.”

Epoch Times photo
A house in New York where the rain gutters are out of place. (Courtesy of Mark’s Inspections, New York)

Gifford says that potential homeowners, especially first-time homebuyers, should ask themselves about their home’s electrical, plumbing, heating, and air-conditioning systems, as well as the age of the roof, the condition of the basement, wells, and septic tanks. pointed out that it is necessary to educate tank, and the foundation of the house.

Roofing and mold repair can be expensive, but Aakjar notes that windows are often an overlooked high-value item.

“Builders sometimes install rubber gaskets instead of metal gaskets, but over time the windows can always look foggy,” he said. “Windows are ornaments, but when he has 25 windows that need replacing, it’s going to cost a lot of money.”

Potential homeowners should also be aware of curled, damaged, or missing roof shingles, and mold and moss growth. Gutters, trees, oil tanks, and outlet placement are potential hazards. , and basements often hide hidden problems.

“The hardest part is predicting how often or whether the basement gets water,” he said. Almost every basement in the Northeast is damp, so many homes will need a dehumidifier.”

Aakjar strongly encourages home buyers to participate in the inspection.

“Buying a home is a big purchase, and walking them through the house and asking questions will help them understand more,” he said.

Stewart believes the housing market could be in dire straits in January and February 2023 based on the current red flags in the global economy.

“The fourth quarter is historically low due to the holiday season, so it’s hard to predict what will happen next year,” he said.

Regarding home prices and interest rates, Gifford said it could be more difficult for sellers to buy better homes or homes of similar value for about the same amount. Meanwhile, rising costs associated with higher mortgage rates may have discouraged buyers, he said.

“It always comes down to supply and demand,” he said. “It’s really hard to predict how things will change in the new year and where it will leave buyers and sellers.”

Mary Prenon

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Mary T. Prenon covers real estate and business. Over her 25 years, she has been a writer and reporter for various print and broadcast media in New York.

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