Little Property Deal Killers: Six Easy-to-Miss Reasons to Walk Away from a Real Estate Deal

The property you’re considering looks good. The price is right. It’s just what you’ve been looking for, and you’re about to make an offer. But think twice, because you need to do a little due diligence to make sure the deal doesn’t contain any hidden pitfalls.

Here’s a list of easy-to-miss deal-killers. They represent very good reasons to walk out of a real estate deal and continue your search for other properties:

• Property Deal-killer #1:
  The local government makes it impossible to get work permits. The town will make you wait three months for a permit to put in a new sidewalk. And another six months for permits for new windows, a new front porch and a new furnace. All communities require permits, but some are unreasonable. So talk to neighbors and local contractors to get a bead on how tough it is, and how long it takes. You don’t want to spend months waiting on city hall while your project stalls.
   
• Property Deal-killer #2:
  The condo board or community organization has too many rules. Everybody likes to keep their community quiet and safe. Yet some associations have unreasonable rules. Maybe you can’t have your contractors park their trucks in the driveway, or you can’t put out “for sale” signs, or you can’t put a dumpster in the driveway. Or you can’t use power tools on weekends. Be sure to check out these guidelines before pinning your hopes on a property that you cannot improve at will.
   
• Property Deal-killer #3:
  Nobody tells you taxes are about to surge. No wonder the asking price is so low! People in the town are ditching properties before their taxes double, which will make it all but impossible to sell any property. So talk to local residents, read local papers and visit town hall to find out what’s planned.
   
• Property Deal-killer #4:
  A big public project is planned. This happened in my town in New Jersey a few years ago. A developer bought and renovated a house. But just when he put it on the market, the town knocked out a bridge on a major thoroughfare and began a 10-month project to replace it. That made his property impossible to show and sell. He lost nearly a year before he could dispose of it. So read the local papers and to find out what the local planning board is considering. Talk to local merchants too. They are always on top of any events that will hurt their businesses.
   
• Property Deal-killer #5:
  A big employer in the area is about to close down. This could cause the real estate market to fall out from under you, depressing property values and making it all but impossible to sell. So talk to local residents and read local papers to stay aware of local news.
   
• Property Deal-killer #6:
  The property is about to get tied up in court. Maybe the seller is getting sued, filing for bankrupty or just getting divorced - and the property you’re considering will get tied up in court for months. The seller probably will not tell you about problems like these, so have your attorney investigate and write language into the contract that allows you to get out of a contract if a property becomes tied up in court. Note: Procedures and laws vary from state to state, so be sure to seek local counsel.

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