You may want to purchase your dream home as soon as possible, but the last thing anyone wants to do is invest in a property that requires endless renovations or presents a health risk to you and your family.
GOBankingRates spoke to Mike Gregor, realtor at Cohen Agency SiM, about properties to steer clear of buying and the reasons why buyers should beware.
Foreclosed Properties With Unknown Histories
Buyers may be tempted to purchase a foreclosed property because it can sometimes come with a lower price.
However, Gregor said a foreclosed property with an unknown history presents buyers with several potential complications. Some of these may include hidden liens, unpaid taxes or unresolved legal issues, all of which are expensive to address after the purchase.
Homes With Structural Issues
Approach any properties with structural problems, like cracks in the foundation, sagging floors or severe water damage, with caution.
Gregor said repairs can be expensive and time-consuming, often exceeding the initial savings on the property’s purchase price.
Properties With Unusual Layouts
Think odd room shapes, inefficient floor plans, little natural light or other strange and unconventional forms. Not only can these homes be a challenge to live in on a day-to-day basis, but they can be equally as challenging to sell later on.
“The resale value may be compromised, and the unique design features may limit the property’s appeal to potential buyers in the future,” Gregor said.
Properties in High-Risk Natural Disaster Zones
Buyers may reconsider making offers on homes for sale in areas that are flood or hurricane prone or are in earthquake zones.
Gregor said it may be a requirement to purchase costly insurance coverage. There is also a significant amount of risk and damage that can outweigh the potential benefits of purchasing the property.
Properties in Declining Areas
Gregor does not recommend buying a property in an area experiencing economic decline or stagnation.
“These locations may suffer from declining property values, limited amenities and reduced demand, making it difficult to sell or generate rental income.”
Properties With Environmental Hazards
Is the home or property you want to buy close to a landfill, industrial plant or another contaminated area? If yes, these are considered hazardous sites. Gregor does not recommend buying a home or living near these sites as they can pose health risks and lead to potential legal liabilities.
Properties With Excessive Maintenance
Does the home you’re looking at need a lot of renovations or repairs? Is some of this ongoing maintenance you’ll need to take care of on a regular basis?
If yes, buyers may want to skip these properties as they can quickly drain your financial resources. The only buyer who should consider these properties, Gregor said, is one who has the expertise, resources and willingness to invest in significant upgrades.
TORONTO – One expert predicts Ottawa‘s changes to mortgage rules will help spur demand among potential homebuyers but says policies aimed at driving new supply are needed to address the “core issues” facing the market.
The federal government’s changes, set to come into force mid-December, include a higher price cap for insured mortgages to allow more people to qualify for a mortgage with less than a 20 per cent down payment.
The government will also expand its 30-year mortgage amortization to include first-time homebuyers buying any type of home, as well as anybody buying a newly built home.
CIBC Capital Markets deputy chief economist Benjamin Tal calls it a “significant” move likely to accelerate the recovery of the housing market, a process already underway as interest rates have begun to fall.
However, he says in a note that policymakers should aim to “prevent that from becoming too much of a good thing” through policies geared toward the supply side.
Tal says the main issue is the lack of supply available to respond to Canada’s rapidly increasing population, particularly in major cities.
This report by The Canadian Press was first published Sept. 17,2024.
OTTAWA – The Canadian Real Estate Association says the number of homes sold in August fell compared with a year ago as the market remained largely stuck in a holding pattern despite borrowing costs beginning to come down.
The association says the number of homes sold in August fell 2.1 per cent compared with the same month last year.
On a seasonally adjusted month-over-month basis, national home sales edged up 1.3 per cent from July.
CREA senior economist Shaun Cathcart says that with forecasts of lower interest rates throughout the rest of this year and into 2025, “it makes sense that prospective buyers might continue to hold off for improved affordability, especially since prices are still well behaved in most of the country.”
The national average sale price for August amounted to $649,100, a 0.1 per cent increase compared with a year earlier.
The number of newly listed properties was up 1.1 per cent month-over-month.
This report by The Canadian Press was first published Sept. 16, 2024.
MONTREAL – Two Quebec real estate brokers are facing fines and years-long suspensions for submitting bogus offers on homes to drive up prices during the COVID-19 pandemic.
Christine Girouard has been suspended for 14 years and her business partner, Jonathan Dauphinais-Fortin, has been suspended for nine years after Quebec’s authority of real estate brokerage found they used fake bids to get buyers to raise their offers.
Girouard is a well-known broker who previously starred on a Quebec reality show that follows top real estate agents in the province.
She is facing a fine of $50,000, while Dauphinais-Fortin has been fined $10,000.
The two brokers were suspended in May 2023 after La Presse published an article about their practices.
One buyer ended up paying $40,000 more than his initial offer in 2022 after Girouard and Dauphinais-Fortin concocted a second bid on the house he wanted to buy.
This report by The Canadian Press was first published Sept. 11, 2024.
