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10 Warning Signs Before Buying A House: Be A Thorough Inspector

Updated: 10/26/2022 by Financial Samurai 67 Comments

Before buying a house, you should look out for various warning signs. As someone who has purchase multiple homes since 2003, let me share 10 main warning signs to look for.

With real estate demand still strong post-pandemic, every buyer must be a thorough home inspector. The last thing you want to do is bid an enormous amount of money for a home and then have to come up with large unexpected costs.

After inspecting hundreds of houses and buying and selling multiple properties over the years, let me share with you some sneaky things sellers deploy to make a house look better than it really is.

The more tips you know before buying a house, the better. A house is likely going to be your biggest financial asset. And if you’re going to take out debt, then all the more reason to beware of as many warning signs as possible.

Warning Signs Before Buying A House

Selling a property is stressful. Anything can happen during the ratification process, especially if you accept a no-financing contingency and no-inspection contingency offer.

Your goal as the seller is to make your property look as good as possible in as cost efficient manner as possible. Therefore, the cheapest and easiest things to do are paint, change light fixtures, clean, and redo the floors. As a buyer, you need to look beyond the cosmetics to see what’s really going on.

Here are the 10 warning signs before buying a house. They are not the end all be all. If you like the house, just be aware and negotiate the price accordingly. When it comes to property, there’s a saying that money is made on the purchase, not on the sale. In other words, negotiating is key.

Everything is generally fixable when it comes to a home. But you need to have a good understanding of how much things cost to fix. These warning signs can easily be discovered by you. You can then hire a professional home inspector to look through the issues as well.

Here are some warnings to look for before buying a house.

1) Exterior cracks and tilts.

The inside can smell fresh from that wonderful floor varnish and paint, but the exterior could cost you a fortune if you don’t pay attention.

Here’s an example of a Victorian house in San Francisco that was purchased for $1.45 million. It looks OK, right? But when the owner went to get a permit to remove some decayed siding and a rotted door, he found more serious foundation issues.

warning signs before buying a house - foundation issues

Below is what the house looks like a year later. What went from fixing up some siding ended up being a complete demolition of the entire structure! Why? Because very often when you start rehabbing a property, the deeper you dig, the more problems arise. Once you’re in there, you figure you might as well replace more and more stuff until you might decide to demolish the entire structure.

If you didn’t initially budget to spend six figures destroying the house as a buyer, your financial situation will be seriously compromised. On the other hand, if you did have plans to sneak a demolition in to save on permit fees to build a massive structure for a flip, then maybe you’ll be just fine. Just make sure to have a wad of cash to pay off the building department employee who has to approve your new structure!

Bring a leveler, preferably with a laser pointer. Make sure the cracks aren’t much more than 1/4 inch wide. If they are, you should get a structural engineer to inspect. A lot of sellers will attempt to mud over and paint the cracks, so look out for a paint or surface mismatch as well.

demolished house - warning signs before buying a house

2) Ownership history – high turnover is a red flag.

Just like when you see a resume which shows a new job every year, a home with high turnover is also a serious warning sign. I consider high turnover as any home with an average ownership length of three years or less per owner. For perspective, the average length of ownership for a home in America today is about nine years. You can easily check homeownership turnover online.

It’s really hard to truly know what it’s like to live in a home until after you’ve taken possession. My biggest fear about buying my old SF rental property was that it was on a busy street next to the busiest street in all of San Francisco. My then girlfriend and I camped out for hours during the day and evening before making the purchase.

Yet even then, once we took ownership, we discovered we had underestimated the constant honking, rattling manhole cover, and tremors from the traffic. I ended up spending $10,000 for sound deadening windows. They were installed behind the original windows which I also replaced with dual panes for another $10,000.

Having multiple owners in a short period of time is one of the biggest warning signs before buying a house. It should really make you wonder why the previous owners didn’t hold the property for longer.

3) Look for water damage concealed by paint. 

If you conceal water damaged areas with paint, you trap the moisture in the walls that will likely lead to mold. Black mold is unhealthy to breathe. Look carefully at the underside of drawers and sinks in the kitchen. Look at the base of the tubs and toilets. One of the biggest culprits is the sheetrock underneath window sills. If you see soft or warped sheetrock, you know there are leaks.

During my 10 years of ownership, twice I hired a handyman to cut out the sheetrock, replace with new sheetrock, mud, sand, and then paint. In preparation for my sale, I also did some of my own patching and sanding work as well. Nevertheless, I still had to disclose the leaks in my disclosure package so they couldn’t use the lack of information to back out.

Black mold, dry rot, and patchy walls are a warning sign the house has a leak. The longer the leak, the more water damage there will be in the interior of the house.

Black mold damage is bad for you - warning signs before buying a house

4) Uneven or bouncy floors.

No home is truly level. However, some homes are more level than others due to settling. Bring a marble to an open house and place the marble around different areas of the floor of each room. The older the house, the likely the more uneven the floors. Sometimes a house will aggressively settle, creating a hump in the middle.

Deflections may be costly to fix because you’ve got to rip out the existing floor, correct the support columns, find a matching floor, and finish it to match the original flooring. And if there are very uneven floors, foundation work might also be needed.

It is natural to have uneven floors for older homes that have settled over time. In fact, an older home where the foundation has settled may be safer than a new home where the earth has not yet had a chance to shift. If the previous homeowner has obviously done foundation work, like install a concrete I-beam and a steal beam for support, you are likely good.

Either way, you need to make sure during the ownership history, the owner has done something to bolster up the foundation. Concrete I-beams and steal-beams are always good. So is earthquake proofing the home.

Floor Deflection is Serious - warning signs before buying a house

5) Beware of room fresheners. 

Some stinky people wear deodorant or perfume. Therefore, some stinky houses are often sprayed or decorated with scented candles or potpourri. Your mission is to find out whether there is an insidious odor emanating somewhere in the house. It could be a leaky pipe, mold, sewage, cat and dog pee, etc.

6) Beware when music is playing in each room.

The agent/seller is trying to mask the noisiness outside. I know, because this is exactly what I did when I had potential buyers come over. I turned on the central fan to create some white noise and played some music in the master bedroom. Insist that all music and AC be turned off so you can determine the noise level yourself.

7) Areas the seller won’t let you see.

If a seller won’t allow access to the crawlspace or a room in the property until you are under contract, they probably have something to hide. The listing agent should let you see and inspect everything. Otherwise, this is a big warning sign to be aware of.

8) Sellers providing incentives to waive inspection.

There is no reason to waive inspection unless there is something big to hide. Always have an inspection contingency. It is your leverage to get out of a deal or negotiate your price lower.

That said, in a strong housing market, putting in a home inspection contingency may make your offer uncompetitive. Therefore, if you do waive the home inspection contingency, make sure you thoroughly inspect the house during each visit before putting in an offer.

Water proofing leaking light well - Warning Signs Before Buying A House
Water proofing a leaking light well before I sold with Flexall sealant

9) No permits for work done.

Doing a lot of remodeling without permits is one of the largest warning signs before buying a house. If the seller hasn’t used any permits, what other shortcuts could the seller be doing without telling you?

You should always ask to see the Report of Residential Building Record aka 3R Report. The 3R report is like the report card for your property. If the seller says they added a new deck, the new deck should be in the 3R report. If it’s not, then there is a chance the deck was not built up to code. You don’t want to mess with safety.

You should have your inspector thoroughly inspect everything that was done without a permit. There are some things that really don’t need a permit, such as remodeling a bathroom or changing windows. But for major structural and electrical work, a permit is very much preferred.

The biggest reasons why homeowners don’t get a permit are due to cost, time, and ongoing higher property taxes. Personally, I won’t buy a home that did anything major without permits. Major items include building a deck high off the ground, kitchen and bathroom remodels, and electrical re-wiring.

10) Spray painted hedges.

Who the heck would spray paint their hedges? It looks so fake. Yet here I was, minding my own business on an afternoon stroll when I saw a realtor do just that. They also bought new grass for their once dead front lawn. Smart on the natural grass, but not so smart on the spray.

Curb appeal is very important. Landscaping ads value to a house, so does a great deck. But they must be done right. If they are taking this shortcut, what other shortcuts could they be taking?

spray painted hedges - could be a red flag
Spray painted hedges is a red flag!

Be Super Vigilant With Your Home Inspection

Now that you know the warning signs before buying a house, you can now buy with more confidence.

Each time you visit a property you want to buy, put your inspector’s hat on. Test the electricity and water. Inspect the foundation. Look at the electrical box and see if it is properly labeled. Bring a marble and a needle to inspect the floors and sheetrock. Look at the ceilings to see if there is any new paint spots. Don’t forget to bring a notepad too.

A good disclosure package will highlight all the problems of the property. But it’s up to you to verify the problems are what they say they are, and not something worse. Having a home inspection contingency gives you an out. You should make it your mission to find even more problems and use them as leverage when negotiating.

After coming up with a detailed list that needs fixing, you’ve also got to come up with a detailed remodeling budget. This is when you can negotiate on price before ratification or after ratification.

Write a price concession letter if you find too many things wrong with the home. Also write a real estate love letter as well to create a connection with the seller. I’ve written both types of letters to the sellers for my past three homes. As a result, I’ve saved hundreds of thousands of dollars in the process.

If you keep detailed records of your finds and present them to the seller, the seller should be amenable to some type of compromise. The last thing the seller wants is for the deal to fall out of escrow.

Also consider your short and long term housing needs. Your forever home may be a great fit now. However, those needs will likely change down the road.

My Previous House Had Deferred Maintenance Issues

Part of the reason why I sold my old rental house was because I didn’t want to spend more money fixing it up. The house was on a busy street, so no matter how nice I made it, I knew manny potential buyers would balk at the location.

My kitchen and a couple of bathrooms hadn’t been remodeled in 25 years. My HVAC unit was 20 years old. Further, my roof had a couple of weak points, which after 12 years, needed some professional maintenance beyond me getting up there and spraying everywhere with a roof patch. I didn’t want to spend $200,000 – $300,000 updating the house, especially because it was a rental.

Although home prices should continue to do well over the long run, I’m happy I sold to reduce my homeownership headaches. The sale proceeds have all been re-invested in completely passive investments.

Inspect A Home Thoroughly

Always take your time to properly inspect a home before buying. Find a professional inspector or someone who is at least knowledgeable about the home construction and remodeling industry. You should be able to go back multiple times to inspect the home, take pictures, and take videos.

Finally, carefully read all the disclosure documents. The seller and the selling agent are required by law to disclose everything about the house that is possibly known. If you want to understand more a particular disclosure statement, simply ask.

Take your time in carefully evaluating a property. A real estate purchase will be one of the largest purchases you will make in your life. If there are other warning signs before buying a house we should know about, I’d love to hear them.

Real Estate Investing Recommendation

If you’re looking to invest in real estate, take a look at Fundrise, one of the leading real estate crowdfunding platforms today. They operate several private real estate funds that allows you to diversify into various types of commercial and residential real estate opportunities across the country. It’s free to sign up and explore.

For individual commercial real estate opportunities, take a look at CrowdStreet. CrowdStreet primarily focuses in real estate investment opportunities in 18-hour cities, those cities with lower valuations and faster growth due to demographic shifts.

With work from home now commonplace, it is likely more people will escape expensive and densely populated areas like NYC to lower cost areas of the country. CrowdStreet is also free to sign up and explore.

I’ve personally invested $810,000 in real estate crowdfunding to diversify my real estate holdings and earning income 100% passively. Real estate accounts for about $150,000 of my estimated $310,000 in passive income. So far, I’ve received over $624,000 in real estate crowdfunding distributions and passive income since 2016.

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Filed Under: Real Estate

Author Bio: I started Financial Samurai in 2009 to help people achieve financial freedom sooner. Financial Samurai is now one of the largest independently run personal finance sites with about one million visitors a month.

I spent 13 years working at Goldman Sachs and Credit Suisse. In 1999, I earned my BA from William & Mary and in 2006, I received my MBA from UC Berkeley.

In 2012, I left banking after negotiating a severance package worth over five years of living expenses. Today, I enjoy being a stay-at-home dad to two young children, playing tennis, and writing.

Order a hardcopy of my new WSJ bestselling book, Buy This, Not That: How To Spend Your Way To Wealth And Freedom. Not only will you build more wealth by reading my book, you’ll also make better choices when faced with some of life’s biggest decisions.

Current Recommendations:

1) Check out Fundrise, my favorite real estate investing platform. I’ve personally invested $810,000 in private real estate to take advantage of lower valuations and higher cap rates in the Sunbelt. Roughly $160,000 of my annual passive income comes from real estate. And passive income is the key to being free.

2) If you have debt and/or children, life insurance is a must. PolicyGenius is the easiest way to find affordable life insurance in minutes. My wife was able to double her life insurance coverage for less with PolicyGenius. I also just got a new affordable 20-year term policy with them.

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Comments

  1. Lady says

    August 16, 2021 at 1:07 am

    I’ve been planning to sell my residential home; that’s why I’m having it inspected already, so I will be able to fix any problems right away. I never knew that uneven floors indicate that the foundation of the house must be repaired already. Since my floors are not in great shape, I guess it’ll be best to hire a foundation repair service.

    Reply
  2. my full name says

    May 24, 2021 at 4:41 am

    Great job! How do you check thickness of walls ?

    Reply
    • Financial Samurai says

      August 16, 2021 at 7:50 am

      Go to where the door is and measure front the side.

      Reply
  3. Frampton says

    March 22, 2021 at 8:43 pm

    My sister would like to buy a single-family house, and that is why she would like to hire a real estate agent. Well, you made a pretty good point that it would be best to have the property inspected first. It’s a good thing that you clarified here the importance of checking the home for any foundation issues.

    Reply
  4. rachel frampton says

    February 11, 2021 at 11:23 pm

    My husband and I would like to buy a residential house this year, which is why we would like to buy home insurance too since this may protect us, just in case damage occurs. This article is excellent when it comes to explaining that we must check whether the prospective property has a high turnover. We’ll also keep n mind to scrutinize its exterior for any damage.

    Reply
  5. Linda says

    August 9, 2020 at 9:10 pm

    I’ve been wanting to buy a newly constructed house, which has three-car garages and an outdoor fireplace. I agree with you that home inspection is mandatory because this will help me determine if the prospective property has decayed siding or a rotten door. You’re also right about the importance of checking whether the sheetrock is still in good condition.

    Reply
  6. Adam Golightly says

    July 30, 2020 at 1:26 pm

    My aunt has been thinking about buying a new home so that she can move and live in a better neighborhood and it can be a lot safer. She would really like to get some help from a professional so that she can find a house that fits her needs but is still within her budget. I’ll be sure to tell her about how taking notice of how often the home changes owners can be really important and indicate if they are any problems or the street is loud.

    Reply
  7. Alice Carroll says

    May 14, 2020 at 11:32 pm

    Thanks for the tip that I should diversify the kinds of properties that I’m buying for real estate investment. I’m thinking about buying my second house next year and I think it would be great if I can find one that I can use as a rental home for some passive income. Perhaps I should look into buying vacation homes for my next purchase since my father told me that those tend to appreciate in value at an increased rate.

    Reply
  8. Rebecca Gardner says

    April 7, 2020 at 9:14 am

    Thanks for mentioning that sellers may try to turn on noise or a fan to mask how noisy the house is. My husband and I want to start looking at three-bedroom homes for sale because our two daughters have been asking about getting their own rooms for months now. I’m glad I read your article and learned some helpful warning flags to keep in mind as we find an agent and start looking at residential homes for sale!

    Reply
  9. Tamaki Auckland says

    April 7, 2020 at 3:40 am

    While buying new property you need to look numerous things which are important however you need to plan at what budget you can buy new house and then for extra things which makes you home as perfect place to live in.

    Reply
  10. Greta James says

    January 27, 2020 at 7:31 pm

    Thank you so much for your advice to look for moisture that could be trapped in the walls. FOr the last few days, my sister has been telling me how much she wants to find her dream home and buy it. I wonder if she should look for surveying companies that can make sure the building is sound before she buys it.

    Reply
    • Greata says

      February 6, 2021 at 4:33 am

      Yes, it would be best to inspect the home throughly before moving in

      Reply
  11. Derek McDoogle says

    January 10, 2020 at 9:35 am

    I like how you suggest to always inspecting a house’s exterior because it can have severe damages on the foundations. My brother told me that he is ready to start looking for a house to buy. I will share this article with him so that he can be careful with the house that he chooses.

    Reply
  12. Ellie Davis says

    November 18, 2019 at 11:07 am

    It’s interesting to know that one of the things that you consider when buying a house is to find any unpleasant odors that are a sign of mold, sewage, or a leaky pipe. My husband is thinking about buying a house for my mother, and we are looking for advice to find the right house for her. I will let her know about your recommendations to help us find the best house for my mother.

    Reply
  13. michael says

    October 17, 2019 at 7:08 am

    very informative and helpful ,just a question i just moved in a house only to discover the drain is blocked ,im not even a month in this house drain problem it looks like was hidden.

    as its only two weeks after occupation can you help please

    Reply
    • Financial Samurai says

      October 17, 2019 at 9:01 am

      It never hurts to ask!

      Reply
  14. Lici says

    October 4, 2019 at 10:04 am

    Wow I am very impressed with this article and want to thank you for all the details you have listed. i truly believe that you just saved me from making a huge mistake in buying the wrong house. Looking at homeowners history as well as the permits and structural issues along with permit problems causing violations ion the property then having to deal with all of that would be a nightmare. I’m glad I ran into this info! Thank You so very much:-)

    Reply
    • Financial Samurai says

      October 4, 2019 at 10:34 am

      You’re welcome! Everybody has to do as much research as possible on one of the largest, if not largest purchases of their lives!

      Reply
  15. Kate Hansen says

    September 16, 2019 at 2:40 pm

    I never thought about looking at the ownership history when buying a home. My daughter and her husband are wanting to buy a home for the very first time and that want to make sure that they buy the perfect ones for them. I’ll make sure to pass this information along to them as they search for homes.

    Reply
  16. Derek McDoogle says

    August 26, 2019 at 9:31 am

    One of my best friends got married and he wants to buy his wife a house. I like how you said that some sellers provide an incentive to waive the inspection. I will advise my friend to make sure to have an inspection before buying the house.

    Reply
  17. Dylan Peterson says

    August 13, 2019 at 8:34 am

    It’s good to know that you should make sure that any house that you look into buying doesn’t have any cracks or foundation issues. My wife and I live in a sketchy neighborhood, and we’d like to move to a nicer one. We’ll be sure to keep this information in mind so that we can find a quality house to live in.

    Reply
  18. Joquim says

    July 10, 2019 at 7:11 am

    Interesting tips! As someone who has never owned a home, these tips are very helpful. I will definitely keep these tips in mind whenever I’m finally in a position to purchase a home!

    Reply
  19. Priyanka Patel says

    July 9, 2019 at 3:12 am

    Hello Sam, I have never come across such resourceful article on the things to look out before buying a property. People mostly talk about price and loans but home inspection is also an important aspect. Thanks for sharing these amazing tips!!

    Reply
    • Slynnnns says

      July 27, 2019 at 3:39 am

      Just watch some Holmes on Homes tv episodes. They will scare you silly.

      Mike Holmes has tv shows centered around fixing homes that are not up to code or where inspectors or purchasers missed costly flaws prior to purchase (like drainage and structural issues). Watching too much could actually make you too scared to buy any house since few are well built and he often show the ideal, above code way to water proof, etc. It’s set in Canada but his books about what to look for are helpful regardless.

      The spray painted bushes is new to me! :) I’ve smelled a moldy house before and couldn’t figure out how you’d think you could get away with leaving it like that after flipping it. Clearly a problem was painted over at best.

      Reply
  20. Stefan Bradley says

    July 5, 2019 at 8:24 am

    Thanks for mentioning that you should only buy a house if the seller allows you to see the entire thing before you are under contract. My wife and I are looking for a new house that is close to work and we wanted to know what to watch out for when looking for potential houses. We will make sure that we see the entirety of a house before making any purchases to ensure that we get what we are paying for.

    Reply
  21. Steven Apell says

    June 25, 2019 at 7:18 am

    I recently moved from abroad to the USA. Its interesting reading these things. American homes use a lot of porous material to build …. wood , sheet rock etc. In my country we use bricks and concrete and tile floors instead of carpeting. So all these problems of a water damage and mold are not a bother. We have had same water heater for 35 years no problem. Makes me wonder if American homes like cars are not built to last ?

    Reply
  22. Thomas Jameson says

    June 18, 2019 at 10:42 am

    It’s good to know that you should search for water damage concealed by paint when you’re searching for a new home. My wife and I are in the market for a new place to live, and we want to make sure that there aren’t any hidden problems lurking in the home we choose. We’ll be keeping an eye out for water damage as we continue our search.

    Reply
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