Real estate expert reveals five red flags that indicate the home you’re viewing could be a wallet-draining purchase.
Settlement cracks, damp and musty smells, water stains, and outdated electrics are all signs a home is a bad investment
Expert explains home issues that can be fixed and how buying a home with a few problems could net you a great deal.
Buying our own home is one of the biggest investments anyone makes in their lifetime. However, not all homes are exactly what they seem on the surface.
“There are several red flags you should be on the lookout for that a home is a money pit,” says Doug Van Soest, co-founder of SoCal Home Buyers, a professional real estate investment company.
Five key red flags buyers should watch out for when viewing potential homes.
Settlement cracks
Settlement cracks are long fissures that can appear in both the walls and ceilings of a house. They result from a house settling into its foundation, a process every new building goes through in the first few months after completion, where the foundation sinks a little bit into the ground.
“A little bit of sinkage is normal and will have been accounted for in the plans, but too much is a problem,” says Van Soest.
While some cracks are simply cosmetic issues, others can pose serious concerns about the building’s stability. Cracks on load-bearing beams or any crack wider than one-eighth of an inch should be inspected by a structural engineer.
Damp and musty smells
Another significant red flag is the presence of damp or musty odors. These smells are often the first indicator of underlying mold or mildew growth, both of which will harm the health of whoever lives in the home if not treated.
“Although an inspector will be able to discover the severity of the moisture problem, you should think twice before proceeding with a purchase when damp and musty smells are present,” says Van Soest. “Mold removal can be complex and costly, so you’ll have to decide if you love the house enough to invest in expensive repairs.”
Water stained ceilings
The appearance of water stains on ceilings often signals previous or ongoing leaks, which could stem from plumbing issues or problems with the roof. Some stains may have been left over from issues that have already been resolved, but others hint that more extensive repairs will be necessary in the near future.
“Water damage can lead to a cascade of complications, including structural damage and mold growth,” says Doug. “Addressing the cause of the stains may be as simple as tightening a valve or replacing a washer, or it could be as costly as replacing the house’s entire roof. That’s why you need to know the exact cause of the stains before you move forward with your decision to buy.”
Outdated electrical systems
Aging wiring may not meet current safety codes and can pose serious fire hazards. Old fuse boxes, frayed wires, or an inadequate number of outlets could signal that the entire home’s electrical system needs to be overhauled. Needless to say, the cost of such an overhaul is exorbitant.
“Older homes also often can’t support modern appliances and technology, which could lead to frequent circuit overloads or power outages,” says Van Soest. “You could hire a qualified electrician to evaluate the system and provide you with a potential renovation cost, but it’s usually safer to steer clear.”
Poor drainage around the foundation
If water is pooling near the foundation of a house or there are visible signs of erosion, it may indicate poor drainage. The water that isn’t effectively drained away can often leak through the foundations, compromising the house’s structural integrity and creating an environment ripe for mold growth.
“Drainage concerns are a huge red flag as they’re costly, ongoing issues that are hard to fix,” says Van Soest.
While you do need to be cautious when buying a home, not all issues should deter you. Many problems can be addressed relatively easily, and it will be worth it if you can buy in a fantastic location or secure a good deal. For instance, cosmetic issues like outdated paint or worn carpets are easy to remedy, and these updates will transform a space more than you might imagine.
“Structural concerns such as minor settlement cracks or an older roof can also be fixable without breaking the bank. If you’re willing to take on the hassle, it’s entirely possible you’ll be able to negotiate a lower price with the sellers to account for the repairs you’ll need to carry out. A seller might be so glad to have someone interested in taking on their problem home that you score a great deal,” says Van Soest.
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