The red flags (condition of the property) one should be looking out for on their first walk-through with realtor?

The attorney closes the deal and everybody walks with what they negotiated.  

For the most part, over time and through experience you will get to the point when you can walk into a home and estimate rehab costs pretty quickly.

You need to do a walk though of the property.

If you do an inspection and find up a chewed up molding, schedule a repair and she pays for it (not at the end during final walk out, but scheduled inspections).

Whats up BP, I'm in the process of having my contractor walk thru a property to provide me with a scope of work and quote.

I always look for ways to improve a house when I walk in.

The goal was two-fold: 1. find a good home with good schools near enough to the city center and hopefully walking distance to things to do. 2. find a home with an income suite (basement apartment, mother-in-law suite, etc.) 

I added drywall and turned an upstairs room (previously used as a sewing room) into a master suite by adding a walk-in closet.

On the surface, it sounds sketchy, but as others have said if the agent has the homeowner's permission then no fuss, no foul.Sometimes people just walk away and they don't care about the money.