Introduction to the Risks and Pitfalls of Real Estate
In many respects, the most important part of evaluating a property is part of the process of selecting the home in the first place. Does the home have the right number of bedrooms and baths? Does it provide adequate access to work, shopping, schools and a good Saturday morning breakfast? Does it have room for the garden, the workshop, and the kids? Does it appeal to you esthetically?
Still, once you’ve found a home that you feel comfortable with, you need to take the next step and make sure that there are no hidden “features” that will turn your dream home into a personal or financial nightmare. In this section, I will attempt to outline some of the potential risks that home buyers in Colorado’s Front Range need to be aware of.
Property Condition. Inspections, building permits, termites and soils.
Health Hazards. Radon, lead, asbestos, mold and water quality.
Your Requirements. Does the home meet your needs?
Neighborhood & Community. Airports, mines, flood zones, and crime.
Legal Issues. Zoning, ownership, and covenants.
Vacant Land. Buying land or a lot to build on.
New Construction. Buying from a home builder.
Condos and Townhomes. Buying into a Home Owners Association.
First, this list of issues is not intended to be exhaustive — nor could it be. My goal here is to give buyers a sense of the types of issues that need to be considered and to outline some of the recurring issues we encounter in our area. The goal is not to suggest that this list can replace consultation with experts such as real estate agents, inspectors, city planners, or attorneys. The potential hazards are varied and complex enough that you need this kind of expertise.
Second, this is a context where my warnings about applying this information to markets outside Colorado’s Front Range market need to be taken very seriously. Termites are not a pervasive issue in this market –nor are earthquakes — but elsewhere they are. Rely on local experts or expect trouble!
Third, don’t fall into the trap of using this list, or similar lists, in the search for the perfect home. Homes are like people — and everything else in the real world. They all have their virtues and their limitations. So don’t try to find the perfect home, but do try to understand the strengths and weaknesses of the home you’re buying and make sure that you can either live with the problems that do exist or that you can eliminate them.
And, finally, don’t let this list deter you from buying that new home. If you work with good people and take reasonable precautions, your risks of getting burned are low.