8 Home Inspection Red Flags: Which Ones Are Deal Breakers?
Homebuying can have a lot in common with modern dating: There are apps (like ours!) with swiping involved, and there are red flags. Just like you might swipe right on a person who outwardly looks pretty darn cute and able to meet your needs, you might move forward with touring a home, putting in an offer, and scheduling an inspection—only to find out about red flags like foundation issues or mold.
Most average homebuyers have a limit when it comes to how much repair they're willing to take on.
For Raleigh-based Realtor Shea Adair, there’s really no such thing as a deal breaker. “Any issue can be taken care of and corrected,” he says, noting his own firsthand experience with unlevel flooring. Still, most average homebuyers have a limit when it comes to how much repair they’re willing to take on.
“In general, the real deal breaker is the magnitude of the damage,” says Dallas-based home remodeling expert Don Brunson of Brunson Construction. “If only one room has mold, for example, it can be easily repaired for a reasonable cost. However, if the home has $10,000 worth of mold damage, that would be a huge deal breaker for the average homebuyer, and we would recommend they keep looking.”
With the help of contractors, home inspectors, and real estate agents, we’re taking a closer look at potential deal breakers to help you decide if you should work it out or run for the hills.
1. Buying a Condemned House
Let’s start with the exception rather than the rule: Unlike all the other scenarios on this list, buying a condemned house isn’t so black and white because you can reasonably expect to discover and address issues like mold, termite damage, asbestos, foundation issues, and more, Brunson says. To decide if it’s a deal breaker, you’ll have to consider the total investment compared to the average home value in the neighborhood, he says, as well as consider how long you’re planning to stay.
“If you buy a condemned house for $50,000, invest $100,000, put it on the market for $225,000, and the average house in that area is around $150,000, your investment is going to sit on the market for a while, and you're going to lose money in the long-run. If you're going to live in the home after the renovations, when it comes time to sell, you may have trouble selling the house. It just might be too expensive compared to the surrounding homes,” he says.
Brunson also states:
“After all of the renovations and repairs, your home may be appraised a lot less than what was invested into the home, leaving you upside-down when you go to sell the home later on. However, if you plan on living in the home for a long period of time, you might be more willing to take on the costs of the renovations without being concerned about the market value of your home afterwards. I highly recommend homebuyers first consult with one or more qualified repair companies and get estimates on the costs of the repairs, then take that information and consider the long-term impact of buying the home and fixing the issues."
Deal Breaker? Maybe! “If a homebuyer isn't absolutely comfortable with the potential downsides of making such an investment, they should continue looking for a home that requires less fixing up and fits their price range,” Brunson says.
2. Buying a House With Mold
Black spots on the ceiling are enough to strike fear in the hearts of any potential homebuyer. But is this fear legitimate? Most likely, yes.
According to Andrew James, owner of Indianapolis Restoration Pros, a company that deals with water damage restoration and mold remediation:
“Mold isn't something you want to see when buying a house and often points to further issues with the home that may not be too noticeable, like hidden water leaks or problems in the pipe system. In my own opinion, I would consider it a deal-breaker, unless you're willing to pay a mold restoration specialist to come and give you a quote on how much it could costs. Mold is something that should be removed immediately, so if you're seeing mold during a house sale then chances are that it's been there for a while and has spread to other parts of the home.”
Still, there’s a chance it might not be do-or-die. “One thing to point out regarding mold is that just about every house contains it,” James says. “There are several different types of mold—some can be dangerous, but other types of mold are completely harmless to humans. If we're talking about the bad type of mold, then it can easily be removed by a mold restoration specialist if it hasn't spread too much,” he says. However, this isn't cheap, and the cost to fix it is often in the thousands depending on how bad it is.
Deal Breaker? Most likely.
3. Buying a House With Uneven Floors
“If the property has uneven floors, it's definitely not a deal breaker,” says Jacksonville broker Chris McDermott. “The first thing to determine is if the property is above grade or on a concrete slab. I would advise the buyer to get a foundation inspection and determine the extent of the damage.” McDermott notes the results might be pricey—up to $25,000 or even more.
“However, this repair could be completed by the seller and paid at closing. The first-time homebuyer could still obtain financing from a traditional lender and make the deal work,” he says.
Deal Breaker? Not usually.
4. Buying a House With Foundation Issues
While uneven floors might not be a deal breaker, deeper foundation issues are another story due to their costly nature, whether you’re a potential homebuyer or a would-be seller, says Chuck Naish, founder of City Residential Repair in Ottawa.
According to Naish:
“Home foundation problems can, without a doubt, be a homebuying deal breaker. If necessary repairs have been put off for some time already, the cost to repair such damages can be fairly expensive. However, most, if not all, foundation issues are fixable. So if you want to sell your house, I strongly suggest you call your local foundation repair expert and get them to inspect your property. Do so as early as possible, as the longer you wait, the more costly the repair most likely will be—and the less likely you'll be able to sell your home.”
Deal Breaker? You can fix most foundation issues—but it’ll be expensive. So in many cases, yes.
5. Buying a House With Radon
Sounds freaky, but did you know most houses have radon? Freakier still, it’s not a dealbreaker, says Florida plumber Ryan Thompson.
“It’s a common issue, and it can be easily fixed,” Thompson says. Radon is a colorless, odorless natural gas that comes from the breakdown of uranium, an element naturally found in soil.
For homebuyers, Thompson advises:
“Before you decide whether you're going to buy a house with high radon levels, you should first find out if the homeowner has done anything about it. Most of the time, you can reduce the radon levels in your home by installing a radon mitigation system. This immediately reduces your radon levels in one or two days. If the homeowner has done this, then it’s one cost you won't have to worry about. If the homeowner hasn't, you can expect to pay anywhere between $1,000 to $1,500 for someone to install it.”
Deal Breaker? Nope!
6. Buying a House With Lead Paint
Lead paint was banned in 1978, and any homes built prior to that may contain lead paint inside or out that could be discovered during inspection. You’ll be required to remove any lead paint in order to close on a property. Moreover, in April 2010, the U.S. Environmental Protection Agency implemented the Lead Renovation, Repair and Painting Rule, also known as the RRP. This rule requires that firms performing renovation, repair, and painting projects that disturb lead-based paint must be certified by EPA to follow lead-safe work practices.
Buying a home with lead-based paint is not a deal breaker.
Translation? If your home inspector finds lead paint in the windows, you can’t do a simple DIY fix. You’ll have to hire an EPA-certified professional.
“Buying a home with lead-based paint is not a deal breaker but may make moving in or renovating a bit more challenging,” McDermott says, in part because when work is being completed, all occupants must be out of the home.
“The most important aspect as a seller is to ensure that the buyer signs a lead-based paint addendum to protect themselves legally,” Adair adds.
Deal Breaker? No, but it’s not a simple fix.
7. Buying a House With Asbestos
Unlike lead, asbestos hasn’t been banned. Still, we’re not saying it’s good—this fibrous, formerly popular insulation material has been linked to cancers like mesothelioma and lung cancer when exposure occurs in high amounts.
If you find asbestos on home inspection, it isn’t a deal breaker, especially as asbestos can still be found in materials today (albeit in small and trace amounts). You’ll just need to get it removed or enclosed. According to The Asbestos Institute, the average cost of asbestos removal in 2019 was just under $1,900.
Deal Breaker? No, but get it removed or enclosed ASAP.
8. Buying a House With Termites
Can these tiny bugs really create a deal-breaker scenario? Unfortunately, the answer could be yes.
“The extent of the damage is key here,” McDermott says. “I would advise my buyer to obtain a very thorough home inspection, a wood destroying organism report, and have multiple contractors bid to repair the property. If major structural issues are discovered, it may be best for the buyer to walk away.”
Deal Breaker? If the damage is extensive, yes.
Preventing Future Deal Breakers
The best offense is a good defense, says Wichita, Kansas-based remodeler Andrew Hecox of Air Capital Roofing.
“As a homeowner it’s always good to be proactive with home repairs to save you money on the big repairs down the road. I would recommend every 5 years have the major components of your home inspected by a contractor who specializes in that service—have a roofer come out to look at your roof; call an HVAC specialist to look at your heating and air unit; hire a foundation specialist to go over your foundation. Just being on top of these things and being proactive to just get an annual report can give you peace of mind—and save you thousands years down the road."