5 Signs the House You Want to Buy Is a Money Pit


For any home buyer, making the largest purchase of your life can seem like a minefield. The financial commitment of a down payment and 30-year mortgage is stressful enough. When you factor in a thousand unknowns about unexpected costs and maintenance surprises, it's amazing that any of us are brave enough to sign on the dotted line and pick up the keys. Of course, hiring a quality home inspector is an absolute must for uncovering a house's hidden issues. But if you want to be sure your dream home isn't a nightmare in disguise, a little personal detective work can help too. (See also: Home Details I Overlooked the First Time)

1. Problems in the Basement

Forget the kitchen; the basement is the real heart of a home.

If you live an area where homes are built to include basements, make sure it's a focus of your pre-buy inspection. This part of a house can provide valuable clues on the quality of construction; condition of the HVAC, plumbing, and electrical systems; and how well previous owners have maintained the building. Avoid sagging floor joists or unstable supports, ancient heating and AC systems, leaking water heaters, and electrical panels with loose wires.

2. Water Warnings

Basements are also a great place to begin scouting for potential water issues. Check for cracked or buckling walls that are just waiting for a good rainstorm before they spring a leak. Pay special attention to damp smells or stains on the floors or lower portion of the walls that indicate recurring issues with standing water.

But don't stop in the basement — check all bathroom and kitchen fixtures to get an idea of how well toilets, showers, and sinks have been taken care of. Look for mold and mildew buildup, corroded or leaky pipes, and fittings that haven't been properly caulked and sealed. Check the ceilings and walls on the home's lower floors for any discoloration, peeling paint, or bubbling wallpaper. Each could signal old leaks from an upper-floor bathroom or kitchen.

Finally, take a close look at the home's windows. Are the exterior window seals smooth and intact or cracked and crumbling? Stained or loose window trim can be a clue to long-term water intrusion, which can damage the framing, electrical wiring, and eventually lead to mold growth.

3. Damaged Windows

As long as you're inspecting the windows, open each one. Stuck, damaged, or warped window frames can mean a budget-busting window replacement bill. Also, remember that old single-paned windows can be one of many energy-drainers in your home. If you live in climates where the weather is seasonally extreme, consider the long-term cost of old windows versus the expense of an upgrade.

4. Mold

Mold — the four-letter word that strikes fear in the heart of every homeowner. Unaddressed moisture issues can lead to mold problems and for home buyers, the signs can be hard to spot. Be aware of unusual smells that don't seem to have any specific source and look for the telltale moisture problems that typically go hand-in-hand with mold growth.

Visually, check for even the smallest spots of mold growth. And remember, mold comes in many forms — some appear white and wispy, while other types form in tight clusters of black, brown, or green dots. The tiny patches you're able to see could be signaling huge colonies of mold just out of sight (and that can mean serious mold remediation costs). For more information on moisture and mold in your home, check out this comprehensive guide from the EPA.

5. Foundation Issues

Make sure the home you're considering rests on a solid footing. Although most buyers can't do a complete structural inspection themselves, they can look for small signs that indicate bigger issues.

Again, head to the basement or crawl space and if neither exists, examine the foundation from the outside. Look for cracked foundation walls, buckling, or gaps of any sort that might indicate larger issues. On the main floors, look for cracks in the drywall, especially in corners and around doorways and windows. Each could belie a hidden structural problem that's causing a shift in the framing. More proactively, check the lot for trees that are set too close to the home. The winding root systems of maturing trees can damage foundations over time. This foundation review by HouseLogic is a great resource for learning more about potential problems and related repair costs.

Two More Money Pit Dodgers

Let me wrap things up with two more pieces of tactical advice for dodging money pits.

Visit After Bad Weather

First, if you've found a home you're interested in, consider doing a walk-through or scheduling a professional inspection immediately following bad weather. Although your Realtor may not be a fan of this idea, it's a helpful strategy for spotting leaks, drainage problems, or general weather-proofing issues.

If Buying a Condo, Review the Minutes

Second, if you're in the market for a condo or townhome, never make a purchase without first carefully reviewing the last three months' worth of the HOA's meeting minutes. Though major issues must legally be disclosed before the sale, undiscovered building-wide problems usually first appear in the HOA's meeting minutes.

While it's expected that home-buying will be stressful on some level, it can also be an exciting time. Investing in your future, building equity, and making memories are all wonderful parts of ownership. With a little know-how and a lot of due diligence, you can help make sure the house you buy is a home worthy of your time, labor, and money.

Did you avoid buying a money pit? What tipped you off?

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Guest's picture

Why not hiring an architect and renovate?

Lars Peterson's picture

Here's one I wish we'd done before we bought our first (and current) home: hire a plumber to do a video inspection of the lateral (or main) sewer line.

Our house was built in 1924 when terra cotta sewer lines pipes (yeah, clay) were the norm. Our lateral collapsed beneath the backyard deck where we couldn't see the sinkhole that had formed over the collapse. After a couple of heavy rains and a couple visits from a plumber to snake the line, we had an inspection done, and lo and behold.

I did some of the work myself to cut the cost, but it still wasn't cheap.

What a mess.

Guest's picture
Jason Schramm

I wish I did this. I bought a house a year ago that I thought was great. Turns out we get water in the basement from a cracked foundation wall and everything else is a mess. I really hate the people I bought from. Not nice people. Oh and the new windows they touted? Only on the first floor.

Guest's picture

Excellent. But so many first home buyers don't realize how expensive these problems can be. Denial?

I'll never forget one buyer who asked the sellers to pump a foot of water out of the basement so their home inspector could check out the house. I don't need no home inspector to tell me a foot of water in the basement is a big problem.

Guest's picture

Here's my survey horror story, which kind of has a happy ending....with three lessons that I want every home buyer to follow.
I purchased my second home quite quickly after only viewing it twice, a 1940s semi the you see on treelined pictures in magazines, a picturesque middle class home which I paid 104,000 for. It looked fab, with a few improvements needed such as new kitchen I was confident I would be able to make the home even better than my 1990s build.
With it looking so good I opted to not get a survey completed and opted for a valuation thinking I knew better, this came back as it was valued at 110,000...so all good I thought
WOW what a HUGE mistake (this is my first lesson - ALWAYS ALWAYS ALWAYS GET A SURVEY) one that I will regret for the rest of my life and spiraled me into what can only be described as a manic depressive and panic stricken episode.
On moving in I learned that the seller had flipped the property and boy did he do a good job of hiding that properties many hidden secrets, (2ND Lesson : NEVER BUY A FLIP)
The first day of moving in I looked up at my newly purchased properties roof and compared it with next doors, that's when I noticed..they were very different; totally different tiles; I was later informed they were Asbestos and the roof was close to the end of its life; later I went into the loft and noticed fibre wool stuffed into various parts of the roof, only to reveal daylight when I removed this wool, holes in the roof, everywhere. The areas where water had found its way into the property from these holes had rotten the timbers which crumbled to dust when I rubbed my hand over them in places. I eventually calmed down enough to close the hatch but not before noticing that the seller had also cut timbers in the roof floor risking the properties structure.
Next problem I found was when I got my alarm fitted; where I was informed that although the fuse board was new, the property had been wired on old regulations and was not earthed or bonded and had a mixture of old and new wiring mashed together and in some areas was dangerous, including the bathroom where 100w unearthed chrome halogens has been fitted above a shower, which itself was only wired by 6mm wire, the house had been rewired by someone not competent, likely the previous owner.
Next up more leaks, flat roof at rear of property had a a big swell in the middle of it and stain marks appeared on roof in several places where it had not been flashed correctly, following a leak to a bay window flat roof that had water pouring into the property.
Glazing - all completely shot and units required changing, most doors stuck and some windows were difficult to open and close because. Due to heat from sun, the units seals were also decayed causing lots of draughts, I remember the october temperature drop where I felt extremely cold in that front bedroom.
Mould growth and humidity- this one was the final straw, we had a big downpour of rain and I noticed the humidity of the property was rediculous, you could feel the damp in the air, getting a humidity tester the property ranged from 75-85% humidity and suffered from the worse condensation on windows you have ever seen, then I spotted it, black mould in one of the corners; turns out the property had been sealed with plasterboard on timber frame blocking all air vents up, the humidity was caused by surface water draining into our foundations and the sitting on all the rubble etc and then slowly rising up through the property, and also the fact that the back boiler was not vented so that too was pumping water vapour into the home.
This is just a few of the major things I noticed while living there, the other stuff was minor issues that would have been easily fixed but I remember things like the taps turning all the way around when I went to fill up the bath then trying to get to them to tighten them only to find the bath panel had been completely tiled and skirting boarded in. It really was like Tom Hanks in the Moneypit.
Eventually I called into a house builders and part exchanged the property for a new build with me actually getting an extra 1000 pounds from the deal plus new carpets, solar panels, kitchen upgrades etc and a really nice plot which felt like a god send. The "money pit" later sold for 78,000 and had lots of the work I identified completed. So that was my "not getting a survey" story - looking back, I probably could have fixed it all up with time but the fact I was finding new problems on a daily basis was just too much for me. I'd get my head around a plan to get things sorted, organise a tradesman to come round for a quote and he would say, you do know that this is a problem too, and the bank would only give us 11,000 to fix it up. It was like the universe was just saying GET OUT of this house, sometimes you just got to cut your losses and realise its not worth the stress.