If buying a new home is your next big money move, make sure you’re not settling for something that’s going to cost you much more than you planned. Buying a house in need of repair can mean ample savings in the short term but a potential big investment in the long term.
If you don’t know how much it’s going to cost to fund all of those renovations, you might be diving right into a money pit. Ideally, your budget for repairs and renovations should have 10 percent to 20 percent tacked on for unforeseen problems, according to a HouseLogic article. Run into the below problems, though, and your budget could easily go over. Here are six signs you're moving into a home that's more budget-buster than fixer-upper.
1. Water Stains
“Water stains, those unsightly brown circles on the ceiling or the trickling brown lines on your walls, are a huge red flag to interested homebuyers,” said Janice Hoffman, founder and CEO of Signs of Success Realty Group in Belmont, Mass. She encourages home sellers to pay attention to these flaws, which can indicate a major roof leak.
According to Fixr’s Cost Guide, the price of replacing a 10-by-10 area of a roof can run anywhere from $500 to $1,750, depending on where you live and what the project involves. If you have a larger or older home, your total repair and maintenance costs could be even higher.
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2. Water in the Basement
If tornadoes, hurricanes and torrential rains are frequent occurrences in the area, make sure the basement and home are protected from the elements.
“Just know that if your home has a basement and there's been flooding before, the chances of recurring flooding issues are high unless you hire a professional to come out and 'waterproof' the basement, which can be extremely costly,” said Stephanie Sullivan of Dream Town Realty.
Any puddles or small pools of water in the basement are signs it might not have proper sealants or a fully functional interior water drainage system. According to the latest HomeAdvisor cost profiles, you’ll be looking at spending an average of $4,001 to waterproof a basement. But, your bill could reach $10,000 or more, depending on the amount of work that needs to be done.
3. Musty Smells
If that musty or musky smell trails beyond the attic or basement, you might be dealing with mold problems in the home, and that's something homeowners insurance doesn't cover. The chances of mold toxicity can be much higher in older homes.
“Mold is another sign that you might want to run away," said Sullivan. Mold problems are not always easy to detect and might require a professional inspection.
Rose Ann Gould Soloway, a clinical toxicologist at the National Capital Poison Center, pointed out how actively growing mold in an indoor setting damages the structure of the home and can trigger allergies. Mold spores can grow even in the absence of obvious water leaks.
You'll want to check for signs of mold around air conditioners, windows and cellar floors. If you find mold, expect to pay between $1,247 and $3,604 for mold remediation, according to HomeAdvisor.
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4. Cracks in Drywall or Floors
Small cracks in the drywall or flooring are usually nothing to worry about. But when you notice larger crevices and visible cracks in these areas, it could be a sign of damage to the foundation.
A cracked foundation can drastically reduce a home's value and cause severe structural issues, according to the National Foundation Repair Association. A few warning signs of a shifting foundation include doors and windows that are hard to close, cracks around doors and windows and sloped floors — such as in bathrooms and kitchens.
When it comes to cost, you could be paying more than $11,000 when the repair work involves hydraulic piers, according to HomeAdvisor.
5. Signs of Pest Infestation
Termite activity might not be easy to detect during certain seasons, since swarms often appear after a long winter or during other seasonal changes. According to PestWorld, some of the signs of an infestation include piles of discarded wings, mud tubes near the home’s foundation and cracked or bubbling paint in certain areas of the home. Cracking or bubbling paint can also be a red flag that there are water leaks in the home, according to the experts at Great Western Restoration.
If the damage from termites or other pests is significant, you could be looking at spending money on structural repairs or replacing entire walls and other parts of the home. While a termite inspection typically costs only $65 to $100, according to CostHelper, the repairs and renovations you might need to make to counteract the effects of past infestations could set you back thousands. According to HomeAdvisor, termite treatment services will run you $228 to $866, on average.
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6. Major Interior Design Flaws
If you aren’t completely happy with the pillars in the hallway or the location of a wall, you might be thinking you can fix the issue with DIY home renovation. It is a fixer-upper, after all.
Interior design projects might not look like they would be extremely costly or challenging, but it’s still a case of buyer beware. In a podcast about flipping houses, Michael Woodward, a house flipper in Nashville, Tenn., said he’s always prepared to hire contractors to do the repair work on a property because, even though he has the skills to do renovations, it’s not worth the time and stress. Instead, he budgets for contractors who can do the work while he focuses on other tasks.
Still, hiring contractors isn't cheap. According to HomeAdvisor, performing home repairs and renovations can cost anywhere from $4,077 to $16,808, on average. And hiring "experts" doesn't always ensure a job well-done.
Construction and design mistakes are all too common in the fixer-upper world, and the financial burden of correcting them often falls on the homeowner rather than the handyman. According to BusinessAdvisor, the best way to safeguard against design flaws — such as removing a load-bearing wall or installing a skylight in a flat roof — is to start a project with clear and thorough plans in place. Additionally, you can include language in a contract requiring workers to install all materials based on manufacturer guidelines.