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4 Reasons To Walk Away From A Property Deal
There are many reasons why someone would prefer walking away from a deal. There are many factors to consider while buying property, and if you fail to keep the main factors and objectives under consideration, then you are most probably going to end up in a bad deal. And instead of making passive rental income from your investment, may lose your money in a property that has no good resale value and can become a major headache for you in future.
There are many ways to judge the deal before finally doing it. Before committing to a deal, you should already be somewhat knowledgeable on the particular property, its location, the legal sides involved, history of tax clearance, condition of building, and many other aspects concerning it. You may be buying it for yourself or for reselling it to some other, maybe for an office, or for a home, or maybe for running a business on it. It is therefore paramount that there should be a number of factors related to those ideas which you must be concerned about.
The place or location
If you found out that the location of the property is disputed, does not have a good history for being either an office or a home, then, you should think before closing the deal. A prime location is one, from where you will be able to access schools, hospitals, malls, markets, restaurants etc. But if the property is not situated in one such location, then who ever will dwell there won’t get these facilities. Moreover if you try to sell it, you won’t get buyers for the same reason.
The argument is that such a house can still appreciate in value which gives the investor an opportunity to cash out with home equity borrowings. Then use those funds to reinvest in more real estate, building an empire. But frankly speaking, if this is in fact a strategy you are considering to implement, it makes even more sense to buy real estate in mature locations where the availability of amenities are aplenty.
Check out for the legal papers, and see if all taxes for the land and the property has been cleared by the earlier owners, and that the land or building is not under any legal notice because of such a history. If you see such a problem, then you should walk out of the deal, because in case you do the deal, you will be needed to fill up for so many fines and penalties for the actions of the earlier owners, that you will have a trail of huge expenditure ahead.
The correct jargon used for such circumstances occurring has something to do with liens. Liens can popup all other the place. And in many cases, attached itself to a home while the owners continue their daily routines totally unaware of it’s existence. It is only when a genuine buyer comes up and conducts proper diligence checks do these little speed bumps pop up.
Other than these problems, there may be some other problems like any legal dispute, or act of crime, that may have taken place over the property or the premises. When you take over ownership of the property, you take over it’s problems as well. Better to immediately walk off the deal when knowing such a colourful history.
You won’t know whether a house is the subject of a legal tussle between various parties until you do a proper check from the relevant agencies. This is when a dependable agent or capable attorney will be able to alleviate your uneasiness and advice you on the facts before proceeding to go ahead with a deal or to walk away.
Property cost and condition
This can be one of the strongest reasons to move off a deal. If you find that you are quoted excessively for the properly, then ask for a reduction of price. In case the owner refuses, judge the chances of the price getting more hiked in future enabling you to profit from the expensive deal. If there are no potential for such chances, move on. If the owner asks for an outrageously low a price, do not get tempted to close immediately. Find out why he is trying to get rid of the property at such a low price, as there may be some material information that is being hidden from potential buyers. Investigate the condition of the property. If your intention is to rent out a house as it is without spending more money on renovations, a house in poor condition is definitely a good reason not to acquire it.
Flippers might have already budgeted a certain amount of cash for remodeling before reselling. But if conditions are much worst than what you have expected upon inspection, you have to work out whether you can still make a healthy profit out of flipping it. Keep your targeted profitability in mind before committed to any deals.