The best investment on Earth is earth.
There are many forms of investment, but real estate investing keeps turning gold as a property gets old. People will never stop needing land to live or to enhance their livelihoods, making this form of investment just so alluring.
That’s why when you see a residential property up for sale with enough bedrooms, a pretty exterior, marbled floors, or priced half of what you initially budgeted for—it might feel like an obvious sign from the universe to write an offer ASAP.
But wait, you need to hold your horses. If things seem too good to be true, they are. Like other investments, real estate comes with risks. And if you are not careful, you may not notice these real estate red flags.
Keep reading to discover the tell-tale signs that there might be something wrong with your dream property—and how you can avoid falling prey to them.
8 Real Estate Red Flags to Watch Out For
1. There are no pictures
Pics, or it didn’t happen.
Let’s say you bumped into this Carousel or Google ad about a pristine 4-bedroom property with a spacious garden and balcony. The caption says it has four bathrooms and a maid’s quarters. But where are the pictures?
You contacted the agent and asked for more photos, but they can’t provide any. Common instinct will tell you they are hiding something. Think about it, would you take a selfie with the less attractive side of your face when trying to impress someone? Probably not—and the same goes for real estate agents.
2. The property specialist avoids questions about the property
An agent must be completely transparent about ALL the residential unit’s history and other details. As a potential buyer, you’d naturally want to know as much information as possible.
If they’re avoiding your questions by diverting your attention to other things, that’s a sign they’re trying to hide some issues. Perhaps there are expensive problems you must address once you purchase the property.
Read: 6 Crucial Questions to Ask When Buying a Condo in Cebu
Plus, it just speaks of wrong sales agent practice. Would you want to make a deal with someone who isn’t completely honest with you?
3. The property is located in a “bad” area
Look around the area. If you see that other properties are not selling, that’s one red flag. Then check if businesses are thriving. Do they look sad? Another red flag.
Are there schools? Malls? Wet markets? Hospitals? If most of your answer is no, you are looking at a “bad” neighborhood. These neighborhoods may have increased crime rates, are prone to natural disasters, or are just very unproductive.
Read: 6 Reasons Why Location is Critically Important in Buying A Condo
4. The property sells slower than others
Chances are, you aren’t the first one interested in this property. If the property is already listed for over 400 days in the market with a 30% markdown from its original price, you’ll need to dig deeper because something is fishy about that.
In some areas, the listing period may take longer than 400 days, so it’s best to research or ask your property specialist about the average listing period.
5. You encounter subtle “cover-ups” during the open house
You might be impressed with the property specialist’s efforts to make the open house a pleasurable experience for you. They might play music as you look around the residential unit, light some scented candles, or perhaps see air fresheners hanging around. Plus, the walls are freshly painted too!
While it seems like a cordial gesture, it’s best to look beyond these veneers. Look at the walls closely and try knocking if the wood sounds creaky or hollow. Feel the surface of the fresh paint. If you can, take bleach with you and politely ask to pour a couple of drops on the wall. If the surface lightens, you’re likely looking at the deliberately hidden mold.
Fragrance may also mask some scents on the property. The same goes for music. Ask the property specialist to let go of the pretties the next time you visit.
6. You notice foundation cracks here and there
It’s pretty normal to notice minor foundation cracks. But when a crack is over half an inch, start questioning things. You might be dealing with a weak foundation that may be expensive to fix. The next time you visit, take a foundation contractor with you to get a more definitive opinion on the state of the property’s foundation.
Read: 6 Typical Mistakes Made by First-time Homebuyers
7. Yellow or brown water stains
A property must protect you from rain, not rot your property from the outside in. Be on the lookout for water stains or yellowish to brownish stains on ceilings and windows. Seeing these may indicate a problem with your roof or the plumbing, which can signify a major structural flaw in the property.
8. Termite dust
Most people will easily recognize the brown, powdery thing on the floor, while others might overlook this detail. If you see one, it could mean live termites are present on the hollow walls or roof.
Some realtors might sweep these tiny shreds of evidence away. You can still tell mites’ existence by knocking on wood and observing if it has a hollow sound.
Only Talk to Accredited Property Specialists
If you haven’t yet noticed, all of the above red flags have one thing in common: they are more likely to come up if you’ve been talking to a real estate broker who is not accredited.
That’s why the first step to making sure you avoid these red flags is to only talk to sellers who are accredited by the Professional Regulation Commission (PRC), whether they’re in-house property specialists or real estate brokers. You’ll have a better chance of actually obtaining your dream home if you’re working with someone who’s credible and has your best interests in mind.
Don’t Leave Any Stone Unturned
Once you seal the deal, there’s no more turning back. The property’s assets are your assets, but their problems are your problems too. Buying cheap properties may sound like an ideal way to make bank, but if you’re not careful enough, these properties might break that.
Remember: trust is an essential factor you must consider when investing in a real estate property. If you spot any red flag that causes you to raise doubts, don’t ignore it. That can save you from a bad financial decision.
Likewise, choosing real estate developers who have a proven track record can increase your chance of success in real estate investing.
If you’re looking for a real estate investment with lots of potential in the Queen City of the South, look no further than Mandani Bay. Poised to become Asia’s next urban landmark, Mandani Bay offers luxurious condos for sale in Cebu ideal for investors who put a premium on luxurious living and a modern lifestyle.