Homebuyers: 7 Red Flags to Search for When Touring a Basement

Devon Thorsby
U.S.News & World Report

When you compile your list of must-haves in a home and compare it with what's on the market, a finished basement is almost always a big plus. You get additional square footage for living, entertaining and storage without having to put up the effort and money to finish the space yourself.

But before you fall in love with that finished-basement abode, approach the space with a critical eye. The basement, after all, houses most of your home's key functioning systems, from plumbing to electrical and gas. A poorly constructed or maintained space might lead not only to costly repairs, but also cause damage elsewhere in your home.

Consider the consequences of taking on a troubled basement. If the finished below-grade space lacks permits or proper waterproofing or contains amateur craftsmanship, you could face municipal fines or risk sickness-causing mold and future fire hazards.

When it comes time to negotiate with a seller on purchase conditions, consider these basement red flags a bargaining chip to ensure you're getting a well-maintained home. "I would make sure it got resolved before they actually purchase the home," says David Schrock owner and founder of Basement Spaces Inc. in Aurora, Illinois.

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When you tour the finished basement of any home on the market, keep an eye out for signs of problems beneath the surface, and don't let these seven potential issues be swept aside during the negotiation process.

Water outside. Your evaluation begins even before you step inside the home. Look for telltale signs of problems -- or the potential for problems -- by searching for indicators that water buildup around the foundation is likely.

"The outside of the home is just as important as the inside. Check grades [for] clear gutters [and] downspout extensions," says Jack H. Milne Jr., president of Tri-County Inspection Company, based in southern Pennsylvania and central and southern New Jersey.

If the house is set lower than the surrounding ground, the gutters are clogged or downspouts lead water runoff directly into the ground at the foundation, there's a good chance the basement will have moisture problems, mold or even regular flooding.

Musty smell. Once you're in the basement, your nose is one of the best tools for finding a moisture problem. "When you open that basement door and your nostrils start flaring, chances are you have a wet basement," Milne says.

A recently finished basement can hide mold, moisture and cracks where water can easily seep in behind drywall and new flooring, but that problem will rear its ugly head in just a matter of time. If the basement smells musty or feels particularly humid, there's likely unaddressed moisture.

Keep an eye out for an abundance of air fresheners or electric deodorizers, which could be used to mask a musty smell. While a dehumidifier is common in basements and could be all a basement needs to address a mild moisture issue, if you're seeing air fresheners in every outlet, "there's typically an issue," Milne says.

If you don't detect moisture from the smell or feel, it's still possible that unaddressed moisture issues can be revealed in a professional inspection. But be sure to discuss any concerns about the basement with the home inspector first to ensure he or she is looking out for potential problems.

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Wet carpet. If the outside conditions and musty smell don't give it away, consider a wet carpet to be the brightest red flag possible for a finished basement.

"If water's coming out on your carpeting, then it's also behind the wall and not evaporating as easily, and it also provides food for mold ... like the back of drywall, which is paper," says Nick Gromicko, founder of the International Association of Certified Home Inspectors.

Malfunctioning light switch. Overhead lights in a finished basement are typically connected to a switch plate at the top of the stairs, with at least one more located elsewhere in the basement.

When a two-way switch doesn't work properly, one switch has to remain in the same position in order for the other one to successfully turn lights on and off. Gromicko says this is an indicator the electrical work was done by an amateur.

"That's probably a dead giveaway," he adds, noting improper electrical wiring can be a serious fire hazard and likely isn't permitted.

Unfinished stairs. Another telltale sign of shoddy basement craftsmanship can be found with a quick check under the stairs. Often, there's a closet under the basement stairs. Open up the closet and see whether the outline of each step is visible, rather than finished drywall covering the stairs.

"One of the first things I do is go look under the stairs. ... If the stairs are not finished on that underneath side, then more than likely, that basement was done without a permit," Schrock says.

Anything unsightly behind the scenes. Once you've checked in the closet under the stairs, Milne recommends searching in every other nook and cranny of the basement. A finished basement will likely be unfinished in the furnace room and inside other closets, giving you insight into the original basement structure's condition.

"Don't be afraid to open doors," Milne says. Look for evidence of fireproofing, mold and questionable wiring or plumbing work.

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No permits. Just like any previous renovations or additions done on a home you're thinking about purchasing, always inquire about permits and certification to prove the work was done properly.

Lack of permits on any part of the home that underwent significant construction is a major liability to the owner, regardless of who did the original work. If you willingly purchase a home with an unpermitted basement, you will be liable for the fines and cost of having work redone and approved by the proper authorities.

"The good thing about the permit is that it takes the liability off of me the contractor and you the homeowner and puts it on the city," Schrock says. Be sure all work on a basement is permitted prior to closing on the home to avoid a big bill or potential safety hazard.

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