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7 Signs That You’re Buying a Money Pit

Wall Damage

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A house is not only your refuge from the world, it’s also an investment. The recent ups and downs in the housing market notwithstanding, in general your home is going to increase in value. This is especially true if you find ways to improve on the property while you’re there.

Unfortunately, some homes need a lot of improvement just to maintain livability, to say nothing of trying to increase the value. The infamous “money pit” can be a bit of a nightmare in which to live, and you can come away from the experience wishing you’d have just continued with apartment living.

Don’t be fooled by that new-house smell, either; many new homes that are less than 10 years old can still require a great deal of improvement.
Here are some ways you can tell whether the home you’re considering might wind up being a money pit:

  1. The foundation has problems. The most significant problems that will arise with a house come from instability in the foundation. While you can always call in a structural engineer to do an analysis, that’s probably not an expense you want to incur for every home you’re interested in. Instead, look at the yard. Are there trees nearby the home? If they’re large trees or if they’re trees that will eventually grow to be large, they can cause the foundation to crack and break.
  2. There is cracking in the walls and around the windows. Cracks in the drywall can also indicate problems with the home’s structure. In particular, you’re looking for cracks around the corners as well as around windows. These cracks are tell-tale signs of foundation problems.
  3. You can feel air around the windows. Speaking of windows, you’ll want to see just how airtight they seem to be. Feel around the edges of the windows to see if there’s a draft, or whether any air seems to be entering the home. Don’t be fooled by window treatments, either. Some window treatments can reduce the amount of air flowing into a home via the windows, of course, and so you’ll want to take some time to raise the blinds and pull back the curtains.
  4. There is water damage. More than just about anything else inside the house, water will cause major damage. It damages walls, floors, carpeting, and everything else. On top of that, water damage can be among the most costly types of problems to repair. Look for water damage in bathrooms and in the kitchen. Check the floors, and check the walls around the fixtures, as well. Watch for leaky fixtures, because that will give you a good idea as to exactly how much home maintenance has been a priority for the previous owners.
  5. The home has cosmetic problems. To be sure, minor cosmetic problems can be easy and inexpensive to fix. However, if you find that you’re entering every room saying “this room would be perfect if I only changed X” then you’ll want to give it a second thought. Interior design and remodeling projects can add up quickly.
  6. Some easy maintenance items have been left undone. For example, check the faucets. If the “Hot” faucet spits out cold water and vice versa, that’s a sign there could be more potential problems that have been unattended.
  7. The basement gives away telltale signs of neglect or of poor construction. The basement is probably the most important room in the home that you can inspect. You’re looking here to see that all of the wiring and plumbing passing through the home seem to have been done professionally. You’ll look for signs that there have been modifications or repairs to the heating and cooling system. Even inspecting the furnace filter can be a good idea, because it might give you some feel for how much time that expensive fixture has left.

Ultimately, none of these things individually should keep you from buying the home of your dreams. What you do need to realize, however, is that the amount of money you expect to put into improvements and repairs is probably woefully short. Double it –at a minimum – and you’ll probably be in the ballpark.

Finally, keep in mind that seller repairs aren’t always the best way to go. If there are problems with the home that you’d like to fix, consider lowering your offer. You’re in a much better position to make sure that the repairs or improvements are done right, and in a way that you want them to be done.

Nick Simpson is Social Media Coordinator at Blindsgalore, a leading provider of wood blinds and faux wood blinds. In addition to their wood blinds collection, Blindsgalore carries a number of additional lines, including elegant roman shades.

{ 6 comments… add one }
  • Evan May 22, 2012, 1:06 am

    hey this is interesting . Your tips are really good .. i will keep this in mind ..
    Evan recently posted…360 HDMI AV Cable ReviewMy Profile

  • Dominic June 1, 2012, 7:23 am

    Great post. Anyone involved in the construction and real estate industry should read it! Keep up the good work!

  • Sarah June 1, 2012, 11:25 am

    It’s so important to watch out for these things. So many times it’s the little things that people miss that turn out to be the biggest headaches down the lie. If your windows aren’t sealed properly that can cost you lots in the winters, not to mention replacing windows is a huge cost as well!

  • Jeff June 4, 2012, 2:02 pm

    In the Uk we have a survey carried out on a property before buying.There are different types of survey depending on your budget.It is always best to have this done before purchasing then at least you have an idea of what problems your new home will have.
    Jeff recently posted…Wood Burning StovesMy Profile

  • Steve June 11, 2012, 8:36 am

    Number 6 is huge, bevcause if they didn;t do the easy stuff there are two issues.
    1) The simple stuff neglected can lead to major problems down the road.
    2) If they didn;t do the simple stuff, you know they probably didn’t do the more advanced repairs, either.

    There are so many things that can cause major and expensive headaches in the future, most of which homeowners rartely do. For example, how many people regularilly maintain ther garage doors? Not many, I’ll bet.
    Steve recently posted…Selling Your Home – How to Get Top Dollar, FastMy Profile

  • David Lampe September 6, 2014, 11:40 am

    Great list. I recommend that all clients get a professional home inspection done to find problems like these before buying a home.
    David Lampe recently posted…Hilltop Real Estate in Demand as Flash Sales Heat upMy Profile

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