Seven Red Flags to Look for When Buying a Home

  • August 29, 2023
  •   •  
  • 5 min. read time
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It’s easy to get caught up in the fun of house hunting, but you also need to keep your eyes open for warning signs that the home you’re considering might not be a safe, sound, dependable dwelling. 

Thankfully, you can easily spot major red flags. You just have to know what to look for, have the right people on your side (hello, structural engineer, home inspector, real estate agents, and your trusted licensed pest inspector!), and go into your purchase with your eyes wide open.

So let’s peel back the curtain—and possibly some paint to see what’s behind it—and start identifying the biggest homebuyer red flags.

1. Foundation Problems

It goes without saying that the home’s foundation is one of the most important structures—and structural issues can be expensive. The biggest sign to watch for, experts say, is cracking. While smaller hairline cracks in the basement are indicative of cement settling, larger cracks are a red flag. They may signal structural problems that compromise the integrity of the home.

One way to spot cracks: Unfinished basements are a starting point. Here you’ll get a clearer picture of the home’s foundation.If the home doesn’t have a basement, door frames can also provide some clues. If the door doesn’t close and open squarely with its frame, take a closer look. Unfit doors can point to larger structural issues.

If you’re still in doubt, consider investing in a structural engineer to inspect the foundation.

2. Pest Problems

No one wants to deal with a pest problem. But some pests can do more than send shivers down your spine. Wood-destroying insects like termites can cause serious damage to the home—and the bill for fixing it could be four figures.

One way to spot pests: A termite inspection from a licensed pest inspector is the best way to ensure that there are no creepy crawlies. Some states don’t require a professional inspection before buying a home, but your lender might. Either way, it’s a good idea to get one.

If the initial report raises any suspicions about possible pests, think about doing a more thorough pest inspection. If anything comes up, you have the discretion to ask the seller to cover the costs.

3. Freshly Painted Walls

It’s not uncommon for a home seller to make sure their home looks its best. This may include fresh paint. But a patch of paint—inside or outside the home—is one of the notorious homebuyer red flags. This patch of paint can signal an attempt to cover up damage, potentially costing you big bucks to fix.

How to spot patches of paint: Do your own inspection during the walk-through or open house before buying a home. Take a step back and look at walls from a distance. If you notice some inconsistency to the paint, there might be something hiding behind it.

Next, take a flashlight and get closer to see if there is damage to the wall underneath, obvious patches, or water staining. Be sure to alert your real estate agent if you see anything. They will pass the information to the seller’s agent or note it for the home inspector. Be sure to take a look at both interior and exterior paint in all areas of the home.

4. Questionable Repairs

DIY projects can be fun, but sometimes an owner’s attempt to repair something can go wrong. The savvy shopper will look at an amateur project and see a red flag. Remember that property flippers sometimes put a premium on speed but may lack the experience needed to make certain repairs.

One way to spot bad workmanship: If something looks rushed or incomplete, chances are it is. Some of the more common “quick fixes” can be found in the home’s plumbing, carpentry, and electrical work. Keep an eye out for leaky faucets, toilets (listen for sounds as well), missing trim work, and uneven flooring. Looking at outlet covers, corners of countertops, and air vent covers can give you a clue as to other workmanship issues.

5. What’s That Smell?

When looking at a home, it’s not just a foul smell that’s a warning sign. Pleasant smells can be warning signs, too. It goes without saying that a bad odor can indicate an issue with the home, but a pleasant smell can be an attempt to cover up unfavorable odors—and bigger issues.

How to sniff out an issue: Look for clues of compensation. Did the seller put a deodorizer in every room? Are all the windows open despite the cold weather?

Although these don’t always point to an issue, they could be homebuyer red flags. So be sure to inquire about all smells, both good and bad.

6. Mold Problems

I’m sure we don’t have to tell you that mold is one of the bigger homebuyer red flags. Not only can it indicate issues with the home, such as a leak, but mold can pose a health risk to you and your family. As you might imagine, fixing mold-related issues is also expensive.

One way to spot mold: Mold can be tricky to find, though water stains can provide a lead. The most common areas for mold are basements, attics, windows, and ceilings—as well as obvious wet areas, such as a bathroom or under a sink. There are also mold tests that can make a definitive determination on the presence of molds. In the end, a professional inspection is your best defense against mold.

7. There Goes the Neighborhood

The first six red flags dealt with the home itself, but you also want to put the neighborhood under a magnifying glass. Survey the area’s condition and look for an excess of for-sale signs, foreclosures, or abandoned lots. These can be indicators of stagnant growth and under-performance—things you definitely don’t want. 

Other things to look for: Visit your prospective neighborhood at different times of the day (and night) to get a full snapshot of what it’s like. During these visits, take note of vehicle and foot traffic and other potential issues like noise. You can also search online databases for crime frequency and sex offenders, as well as learn about schools and amenities.

While some of these factors may not be an immediate hit to your wallet, they can have long-term effects on the equity on your home. And they will certainly weigh on your peace of mind. 

What to Do with What You Find

If you find problems while house hunting, it’s up to you whether you proceed with the sale, try to negotiate with the seller, or walk away. 

As you weigh those options, here are a few things to keep in mind:

As-is sales

Buying a home “as-is” is exactly how it sounds: You’re taking it as it stands, warts and all. The seller isn’t offering any warranties or guarantees regarding the home’s current condition, which puts the responsibility on you to get the home inspected and find any defects.

Even if you do find defects, the seller will not be covering their costs—you’ll simply have the knowledge that the defects exist. Buying a home as-is carries a higher level of risk, but these homes typically come with a lower price tag, so weigh the pros and cons. 

Visible issues

No home is perfect, even a newly constructed one. But there’s a difference between your everyday problems and, say, encountering a horrible smell or seeing visible water stains during the open house.

You’ll want to document the issues with photos or a video, and then contact a professional who can help assess them. You can also request permission from the seller to conduct mold or water damage tests for a more accurate understanding of the situation. It’s important to fully understand the scope of a problem before making any decision.

Problems on the inspection report

Your home inspector will find things. However, you need to understand the problem, how it can be solved, how much that might cost, and how long it may take. Be sure to ask your inspector follow-up questions, as well as their personal opinion on whether this is one of the major homebuyer red flags or something minor that can be addressed later. 

The Importance of Due Diligence

It’s no fun to think about inspecting paint or worrying about hairline cracks. But these little tasks—whether done by you or delegated to a professional—can save you time, money and, perhaps most importantly, your peace of mind! You want to know that, at the end of the day, your family lives in the best home you can provide.

Remember that some of these homebuyer red flags are bigger than others. Water stains may be inconvenient and expensive, but structural or electrical issues could pose a real danger. Knowing what warning signs to spot, when to call in the experts, and when to move on in the house-hunting process can not only save your wallet, but it might even save lives. 

Want more information about homebuying and financing? We’re here to help!