WWYD? Red flag in home buying.

[Ornery]

We are looking at purchasing a home. It is well within our budget and we have a fairly large emergency fund. Perfect area, great schools, big backyard, lots of extra space, etc.

My concern is that while we were there tonight looking at it for the five millionth time, the neighbors drove up and my realtor knew them. The neighbors told my realtor that the previous owners gave the house up (it is a bank owned foreclosure) because they were upside down in the loan but also told the neighbors that the house had water seeping up into the basement and the foundation was cracked. We closely inspected the house, there is no sign of water damage anywhere in the basement (it is a daylight basement), no mold or mildew anywhere and there is no sign of any cracking. I don't think anyone has cleaned the house so I would think there would be obvious discoloration from water damage but I don't know how to tell.

If we put in an offer, we would have a full home inspection and a structural engineer in to look at it, but I'm not sure I even want to pursue this. My realtor seemed to think we should go ahead as does my DH and my parents (who are co-buying the house with us) but my red flag warnings are going off. I am going to order an insurance clue report but can't think of any other way to find out information on the house.

While we can survive paying for new furnaces, a/c, some plumbing, etc. if necessary, I obviously don't want to buy a house with flooding issues or a cracking foundation!

What do you think based on the info I've given? Do you have any thoughts on how to get better information about it? Thanks!

[Rosebud1]

Seems like you need some technical advice. While I don't have it (sorry!) a home inspector (who is licensed, certified, and NOT CONNECTED TO THE REALTOR IN ANY WAY) certainly would. My husband is looking into this field, and he has said according to his research there are some problems that a standard inspection will not necessarily catch. They are usually looking for obvious problems. They don't open up walls, they don't always climb up on the roof (it can be risky), and they don't always go under the house to inspect if there is not the space available. I think some people think inspections are more thorough then they really are. In some areas, inspections take only a couple hours to do.

My advice -- call a home inspector and ask if you can pick his brain for a bit. Maybe a 5 minute phone consult. Pay him for his (or her) time of course. Trust me, it will be worth it. Then ask, would this sort of problem be evident in a routine home inspection?

Foundation work is SOOOOO expensive to repair! I don't think you want to move along too much further in this process until you can breathe easier about this situation. This is a big investment, so I think caution is wise.

[AAK]

I would also suggest speaking with an inspector, but then also call someone who specializes in water damage/foundation repair. Ask them who they would recommend for an inspection (someone who would be on the look for this kind of problem).

Truly, though, I find it hard to believe the neighbors story. I have seen both mild and heavy water damage, and it is hard to miss.

I would put in an offer based on the contingency of a home inspection and perhaps additional inspection by someone who specializes in foundation repair/water damage. You get your deposit back if you back out because of the findings.

FWIW, my dad had a crack in his foundation that was easy to repair (labor intensive--lot of digging). It was along the wall. I imagine (but don't know) that if it was on the floor, it wouldn't be so simple.

Amy

[Theia]

I agree with the PP's suggestions about calling an inspector as well as a specialist....

I'm wondering why would the neighbor say something like that? Maybe the previous owner did tell the neighbor that, but I agree that is something that in many cases would be easily seen. In my old house the basement once flooded, but it was due to tree roots in the pipe under the house, it could be something like that (aside from the faulty foundation part of the story). So maybe the neighbor has other motives?

IDK, think on it and then follow your gut.

[leavemealone]

I would be concerned about the foundation, but I'd try to find an expert in foundations and ask them how to determine if there is damage that a standard inspection may miss.

I would also consider that the previous owners may have told their neighbors about the foundation problems to kind of make it look better that they were losing their house to foreclosure. Foreclosure is embarassing enough that maybe the previous owners were trying to make it look not as bad. I still wouldn't take the statement lightly and get it checked out.

[ChristyMarie]

I would make sure to get a really good inspection based on what the neighbors said. They could have the story wrong or it could have been fixed. In addition to a regular inspector I would call in a foundation/water person. When we bought our house we noticed water and damage around one of the furnaces - we had an HVAC guy meet us here with the inspector and it saved us a ton of cash - about $12K as both units needed to be replaced. All the inspector could say was that they needed to be serviced but didn't know why. Get someone who does that kind of work in there to inspect and go from there.

No need to walk away from the *perfect* house because of a repair issue. Just make sure it is addressed.

[seashells]

My take on this is not 100% thought out, maybe maybe worth consideration.

What the neighbors did was really odd. It's in their interest for that house to sell and be occupied. If you were friends with them, it would be one thing for them to tell you about any issues you might want to know. But they weren't your friends. And they didn't just say that in front of you to help you out - what, are they going to warn everyone who looks at the house? No way, unless maybe they were hoping to drive the price way down to buy it themselves, maybe. They also weren't being helpful to the realtor either - I guarantee you she wanted to stab them when they started talking about it in front of you.

So I don't know the motive around them sharing this info with you (unless my guess that they wanted to drive the price down and buy themselves happened to be right). The motive is important because it leads to the truthfulness of the information.

Unless they were just idiots and flapping at the mouth with absolutely no regard for anything but gossip, then you're back at square one.

[K1329]

I would not rely on a home inspector for this information. While they are trained in many aspects of home inspection, something serious like a foundation issue would require a specialist/expert. And well worth a few hundred dollars for piece of mind on the issue.

If you love the house, it's worth making an offer, with a period for inspection, and hiring an expert to determine if the foundation is sound.

I also agree with the pp who stated that the neighbor may have ulterior motives. Something doesn't add up there.

Good luck!

[zinemama]

The only red flags that you are reacting to are from neighbors who have no connection to the house that you know of and who you wouldn't be asking for advice in any case.

Get the home inspector and the structural engineer, as you would do in the course of things. There is really no reason to give these neighbors claims any credence.

[lucyem]

There are a whole bunch of reasons the neighbors said what they said.

FYI when my sister was selling a house the neighbors went out of their way to make incorrect comments about mold issues to perspective buyers. (in other words they told lies) She had to have her lawyer stop them.

I would certainly do my homework and have it checked out by someone who knows what they are looking for. Banks in general do nothing or as little as possible when selling a foreclosed home.

[Ornery]

All my fussing about whether or not we could figure this out was for nothing. I checked the CLUE report this morning and there has been extensive water damage claimed in January or February each year for the last four years. This confirms the neighbor's report. In addition, the previous home owner's loan officer told my realtor that the previous home owner couldn't get the house refinanced due to structural issues. So not much detective work required to find out these issues. We're running away from this as we really don't want to take on those type of problems.

Thanks again for helping me think this through and for the input!

[frontstreetmama]

I agree...

Originally Posted by seashells

My take on this is not 100% thought out, maybe maybe worth consideration.

What the neighbors did was really odd. It's in their interest for that house to sell and be occupied. If you were friends with them, it would be one thing for them to tell you about any issues you might want to know. But they weren't your friends. And they didn't just say that in front of you to help you out - what, are they going to warn everyone who looks at the house? No way, unless maybe they were hoping to drive the price way down to buy it themselves, maybe. They also weren't being helpful to the realtor either - I guarantee you she wanted to stab them when they started talking about it in front of you.

So I don't know the motive around them sharing this info with you (unless my guess that they wanted to drive the price down and buy themselves happened to be right). The motive is important because it leads to the truthfulness of the information.

Unless they were just idiots and flapping at the mouth with absolutely no regard for anything but gossip, then you're back at square one.

ALSO -- they may have thought they were being HELPFUL based on info the previous owners gave them... maybe their former neighbours didn't want them to know they had money problems and made it seem like it was different circumstances that cost them their family home!!

[CarrieMF]

I'm glad you found out that the neighbors were not lying. It's too bad though, they sound like they could have been good neighbors by letting you know there were major issues with the house.

Not all flooding will show damage, especially if it's caught early enough & taken care of.