First Time Buyer Friday #11 – When To Walk Away
In my continuing series, First-Time-Buyer Fridays, I answer a common question from a first-time buyer. If you have a question to submit, first-time-buyer or experienced investor, put one in the comments below, or fire me an e-mail at Tim@TimAyres.ca.
Q. I made an offer to purchase a house and my inspector found a few problems. How do I know when to walk away?
A. Unfortunately, not all houses are created equal, and you may find that after finally getting an offer accepted on your first home, that the inspection report turns up some issues you missed on your initial viewing of the property. This is normal – it’s the inspector’s job to pick apart the various systems of the home and point out to you everything you’re taking on when you buy the house. The big question is – what is acceptable and what’s too much?
When I bought my home, it was only 11 years old. Everything that I needed to change was merely cosmetic, and if worse came to worse, I could always wait (and suffer through the pastel pink walls and mint-green carpet). But if you’re buying an older home, things like knob-and-tube wiring, a faulty roof, or a cracked or leaking foundation might be a reality and turn your dream home into a nightmare – and this is why an inspection is the best $400 you can spend when you’re shopping for a home.
You should be prepared to replace a few things and make a few changes once you move in, but you’ll probably want a good idea as to how much money this is going to cost. For example, if your inspection report finds that the roof is failing and you’ll soon need to replace it, it’s not hard to get a roofing contractor over for a quick drive-by estimate. It’s another thing altogether if your inspector suspects there may be substandard wiring, cracks in the foundation, or failing stucco or other exterior cladding. These repairs are often much more costly – and sometimes cover up other problems not visible to your inspector. It’s not necessarily the cost of the repairs that is the greatest cause for concern.It’s what you don’t know that can cost the most. If you aren’t comfortable with this, it might be a signal that it’s time to be glad you had an inspection, walk away, and move on to another property.
Your REALTOR® has probably seen lots of similar houses in his or her career and can certainly help counsel you, but you should always get reliable repair estimates from reputable contractors – they are the ones you’ll be writing a cheque to for repairs. The decision to walk away or not has to be your own; you need to be comfortable with any repairs or upgrades that may be necessary when you take ownership of the house.
A smart buyer will also consider if the house will be difficult to sell in a few years’ time if these issues are not looked after when he or she owns the house. The roof might not be leaking now, but the last thing you want is to take a hit on the price of your home because a subsequent buyer doesn’t want to fix the problems you inherited from the previous owner!
As with dating, there are plenty of fish in the sea when it comes to buying houses, and your REALTOR® will help you find the right house. And, also like dating, you’ll probably find that you love that house even more than you did the one you let get away.
I’d love to answer your questions about buying or selling a house. Give me a call at 250-885-0512, e-mail me at Tim@TimAyres.ca or fill in my contact form. Connect with me on Twitter at Twitter.com/TimAyres.
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