Spotting Red Flags in Real Estate Deals

Josh Perez • November 19, 2024

When it comes to real estate investing, due diligence is critical. As a seasoned investor, I’ve learned to identify key red flags that can save time, effort, and money. Here are two significant warning signs I’ve come across frequently in the property buying process.

"When there's some large variances or omissions, it's just a sign that there's probably more red flags to come."

When it comes to real estate investing, due diligence is critical. As a seasoned investor, I’ve learned to identify key red flags that can save time, effort, and money. Here are two significant warning signs I’ve come across frequently in the property buying process.


1. Large Discrepancies in Financial Data

One of the biggest red flags is encountering significant variances when verifying the financial data provided by sellers or their agents. For example, if utility bills, insurance costs, or rental income figures are way off from what was originally presented, it raises concerns.

Sure, small clerical errors or minor discrepancies are understandable, but when the gaps are substantial, it signals potential misrepresentation. Sophisticated buyers and investors will always dive into the details. When numbers don’t add up, it often suggests there may be even more issues lurking beneath the surface. If I see large variances or omissions, it’s usually a sign to walk away.


2. Pushy Sellers or Unrealistic Timelines

Another red flag is when sellers or their agents rush the process and fail to provide adequate time for due diligence. Buying a property is a significant investment, and it’s only fair to expect reasonable time to review key documents and operational data.

If sellers are overly pushy or uncooperative about sharing necessary information, it often signals that they may be hiding something. Whether it’s inflated financials or misrepresented property conditions, this behavior is a major warning sign that should not be ignored.


Key Takeaway

Transparency and accuracy are essential in real estate transactions. If something feels off—whether it’s glaring discrepancies in numbers or a lack of cooperation—it’s better to proceed with caution or move on altogether. As an investor, protecting your capital and making informed decisions should always come first.

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Deposit vs. Down Payment: Key Differences for Homebuyers

By Josh Perez • February 18, 2026
When you’re buying a home, two terms often cause confusion: deposit and down payment . While they’re related, they serve very different purposes in the homebuying process. Here’s what you need to know. What Is a Deposit? A deposit is the money you provide when you make an offer on a property. Think of it as a show of good faith that proves you’re serious about purchasing. How it works : Typically, you provide a certified cheque or bank draft that your real estate brokerage holds in trust. If your offer is accepted, the deposit remains in trust until the deal moves forward. If negotiations fall through, the deposit is refunded. Connection to your down payment : Once the sale is finalized, your deposit becomes part of your total down payment. Why it matters : The amount is negotiable, but a larger deposit can make your offer more attractive in a competitive market. Keep in mind, however, that if you back out after conditions are removed, you risk losing your deposit. What Is a Down Payment? Your down payment is the amount you contribute toward the purchase price of your home when securing a mortgage. Minimum requirement : In Canada, the minimum down payment is 5% of the home’s purchase price. Anything less than 20% requires mortgage default insurance. Sources : Down payments can come from your savings, the sale of another property, RRSP withdrawals (through the Home Buyers’ Plan), a gift from family, or even borrowed funds. Example: How They Work Together Imagine you’re buying a $400,000 home with a 10% down payment ($40,000). When you make your offer, you provide a $10,000 deposit . Once conditions are met, that deposit is transferred to your lawyer’s trust account. At closing, you add the remaining $30,000 to complete your full down payment. The lender provides the rest—$360,000—through your mortgage. The Bottom Line Your deposit shows commitment and secures your offer, while your down payment is what makes the mortgage possible. Together, they work hand in hand to get you into your new home. 📞 If you’d like clarity on deposits, down payments, or any other part of the mortgage process, let’s connect. I’d be happy to walk you through it step by step.
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Is a 5% Down Payment a Mistake? Here’s the Unpopular Truth.

By Josh Perez • February 15, 2026
Discover why a 5% down payment isn’t always irresponsible. Learn when a low down payment is a smart financial move for Ontario homebuyers and when it’s a risk.