Top 15 Red Flags to Look for When Buying a New Home

Buying a new home, especially if it’s your first, can be among the most exciting and fulfilling experiences of your life—but it can also be among the most challenging. There are a thousand and one decisions to make and questions to answer. Is my credit strong enough to secure a loan? What’s the best mortgage rate I can get, and who’s the best lender? Where do I want to live, and are there good schools and shopping centers close by?

You don’t want to wind up in a house you can’t afford, or one that’s falling apart, and that means that making mistakes just isn’t an option. Before you even begin looking at homes, you need to create a checklist of potential red flags, things you need to be aware of about the house before you sign on the dotted line.

Here are 15 of the things that are red flags, and that you need to look out for:

Lots of “for sale” signs down the street: if a lot of people are moving out of the neighborhood, there’s probably a reason—and you need to find out what it is. Maybe there’s been a rash of home burglaries or vandalism. Possibly the town you’re moving to is dying, with businesses boarding up and leaving. Before you agree to buy a home, take the time to talk with a few of your would-be neighbors to find out what’s going on.
Signs of poor maintenance: usually, home sellers will try to hide the signs that they haven’t maintained their house well, possibly for years. That means you need to look in places they don’t expect you to. Check under rugs for signs hardwood flooring hasn’t been maintained. Look at the gutters to see they’re secure and clean. Make sure the toilets flush properly.
Damaged foundation: the first thing to look for is the grading of the yard. If the yard slopes downward in the direction of the house, that could be a problem, because water runs downhill, and the foundation could have damage. Check out the foundation, itself, looking for cracks and bulges.
Basement flooding: if you’ve ever lived in a house in which the basement regularly floods after a heavy rain, you know what a headache it can be, and how expensive it can be to repair. Check out the basement carefully, looking for any signs of recent flooding.
Brown spots on the ceiling: if there are signs of water damage on the ceilings, it means something is leaking. If it’s an upper floor room, it probably means the roof leaks. If it’s a room on the 1st floor, it could mean leaking pipes.
New paint on the walls or the ceiling: in and of itself, this isn’t necessarily a red flag—most sellers will spruce up their home with a fresh paint job to make a good impression. However, if there’s fresh paint and you also see sagging ceilings or walls, or notice strange smells, that new paint could be covering up mold, mildew or leaks.
Bad odors: as the old adage goes, follow you nose. If you smell bad odors outside, it could mean a septic system problem, or that the house is in close proximity to a business that produces those bad smells. If it’s inside, it could signal plumbing problems.
Bad wiring: being overly polite isn’t an option when you’re about to shell out a lot of money for a new home. Don’t be shy about testing all the switches and outlets throughout the home to make sure they're functioning properly. If they’re not, it could be a sign of wiring problems.
Rooms the seller won’t let you in: there’s no reason for locked doors or rooms that are “off limits” when you’re buying a home. After all, you’re not buying part of the home—you’re buying the whole home. If a seller tells you someone is asleep in one of those rooms, or that they’ve put the dogs there for your tour, arrange a time to come back later, but don’t agree to buy until you’ve seen every room in the house.
Walls that were recently removed: sometimes people remove walls to create an open floor plan, but if they did the job themselves, they could have inadvertently taken out a load-bearing wall, and that could shift weight to other parts of the house and cause damage down the road. If sellers act suspiciously when you ask about an open floor plan, have a structural engineer check it out.
Pest infestations: you don’t want a house infested with termites, roaches, mice or other household pests. Keep an eye out for the pests, but also for attempts to eradicate them, like mousetraps, pest strips, or multiple cans of pesticide under the kitchen sink.
The well tends to go dry: if the house gets its water from a well, you need to make sure that well won’t go dry every time there are droughts or protracted periods without rain. Run the faucets to see if there are any current problems—when wells are about to go dry, the water tends to be cloudy or even brown. Ask the sellers if the well has ever gone dry, and, if it has, how often, and when the most recent event was.
The house will need a new roof before long: always find out how old the roof is. Slate and tile roofs will usually last 50 years, while asphalt shingle roofs last only 20. If it’s a shingled roof and it hasn’t been replaced in 25 years, odds are you’ll need to pay to replace it soon after you move in.
The furnace is old or unreliable: most home furnaces last between 16 and 20 years. If a furnace is older than that, or getting close to that age, you can still buy the home, but be prepared to replace it before long. Buying and installing a new furnace will generally run you about $5,000.
The driveway is in bad shape: according to Angie’s List, the average cost to replace a concrete driveway is between $3,500 and $7,000 (or between $3 and $10 per square foot), but the price can go above $10,000 for large driveways. Make sure the driveway is in good shape and won’t need to be replaced any time soon.

Conclusion

Rule number 1 when buying a new home is to be proactive. Before you tour the home, be prepared with a list of good questions to ask the realtor and the seller, and don’t be afraid to ask them. Rule number 2 is to find out if they’re being transparent in answering those questions. The best way to do that is to hire a home inspector. Usually, the city where the home is located will inspect for structural, mechanical and electrical issues, but they could miss other items. Hiring a home inspector will typically run you from $350 to $450, but that’s cheap considering how much you might end up spending to get your new home into shape after you buy it.