7 Red Flags for Home Buyers

Before you bid on a home, check for potentially dicey, and pricey, problems.

In most states, home sellers must disclose any defect they know about that could affect how

desirable -- and marketable -- their home is before they sign a purchase contract. Even in

the six states that lack a "mandatory seller's property condition disclosure" (Alabama,

Arkansas, Kansas, Vermont, West Virginia and Wyoming), the state's licensing agency may

require real estate agents to tell buyers what they know. In all states, real estate agents

who belong to the National Association of Realtors are obligated by their code of ethics to

disclose any defects they know about.

But you may have fallen in love with a house, and spent hours preparing a purchase contract,

before the disclosures are made. You should always make your purchase contract contingent on

a professional home inspection ($300 to $350). Home inspectors could miss hidden problems,

however, such as a basement that floods during a downpour.

This list of red flags, recommended by Kathleen Kuhn, president of HouseMaster, a nationally

franchised home-inspection company, and Bill Richardson, president of the American Society

of Home Inspectors, can help you identify potentially pricey problems. You can use your

observations to winnow your choices or to factor in condition when you negotiate price with

the seller.

Poor water pressure. Aside from issues of comfort and convenience, low water flow may

indicate plumbing problems, such as corroded pipes that will need to be replaced down the

road. Tearing out old plumbing and replacing it with copper pipes can run $2,000 to $15,000

or more in a typical 1,500-square-foot home. A less costly alternative is cross-linked

polyethylene (PEX) piping, which unlike rigid copper piping, is flexible and easier to

install (approved for potable use in all U.S. model plumbing and mechanical codes, but may

not be approved in local building codes).

Among tests you can do: Run water in a bathroom sink and check for weak flow. Flush the

toilet while the water is running. Does the faucet flow drop off during the flush? In the

bathroom located farthest from the water heater, turn on the hot water. Is there an unduly

long delay before the water turns hot?

Ceiling stains. Something's leaking. If the stain appears beneath a bathroom, odds are the

shower is leaking. It may merely need recaulking or regrouting, but it could also require

ripping out tile and replacing the shower pan, a much more costly process (about $1,500).

Most roof leaks result from neglected flashing that seals "valleys" in the roof or around a

chimney or vents (cost to repair: $200 to $500). But roof leaks may also mean it's time to

replace shingles -- at $100 to $350 per 100 square feet for asphalt shingles and $210 to

$1,000 for wood shingles.

Troublesome doors. Are the doors hard to close? Do they swing open by themselves or fail to

open fully? If you have one bad door, it may simply have been installed incorrectly. But

more than one may indicate a serious structural issue, such as a foundation that has settled

or framing that is deteriorating. Fixing this problem can require structural and

geotechnical engineering reports and thousands of dollars in repairs.

Overloaded electrical outlets or lots of extension cords. Today's electrical demands may

exceed the capacity of homes built as little as a decade ago, says Kuhn. You'll spend $75 to

$250 to have an electrician add a 120-volt outlet to an existing circuit. Or, if the

electrical system is very outdated, it may require a new electric panel. A new, 100-amp

panel will cost $1,500 to $2,500.

Exterior features that slope toward the home. A porch, patio, driveway or grading that

slopes toward the home all but guarantees water in the basement. And that may lead to

structural decay, mold and insect infestation. In the basement, a musty smell may indicate

previous flooding or ongoing moisture problems. Check the walls for stains, dark or light,

which are tell-tale signs that water has penetrated the walls.

Solving the problem may be as simple and cheap as adding gutter extensions or regrading soil

away from the home, or it could require thousands of dollars to excavate and build drains.

Some homes may require exterior drains (one at the bottom of a sloped driveway, for example)

as well as buried drains.

Odors. Cigarette smoke and pet odors can be hard to get rid of. And if a home smells too

clean -- heavy with the scent of cleaning products (especially bleach) or plug-in

deodorizers -- the seller may be trying to cover up an odor, such as mold or urine. If so,

you need to inquire further, says Richardson, of the American Society of Home Inspectors.

Synthetic stucco siding. This must be installed precisely or else moisture will be trapped

behind it, resulting in mold and decay. In the worst case, the siding will have to be

replaced. For a medium-sized house (1,250 square feet of exterior surface area), replacing

vinyl siding can cost $2,500 to $8,750, while wood or fiber cement siding can cost $5,600 to

$10,000 or more. Especially in humid climates, you may want to pay for a special inspection.

HouseMaster charges $600 and up, depending on how much of the material has been used and the

size of the house.

If you find out before you close your purchase that the seller deliberately misrepresented

or failed to fully disclose the home's condition, you may have the right to rescind the

contract under state law. If it's a done deal, you'll probably have to sue the seller to

recoup your damages. In some states you can also seek repayment of your legal costs. Consult

with a lawyer who specializes in real estate fraud. If you have reason to believe that the

seller's agent was negligent, you can take it up with the local Board of Realtors

(www.nar.com, click on "local and state associations") and the state's licensing agency (to

find yours, visit the Web site of the Association of Real Estate License Law Officials).