Question: Should I Reach Out to the Previous Homeowner About Undisclosed Water Damage

[Kenzer Hodgson]

I recently bought my first duplex where the inspection report mentioned the possibility of prior water damage in the basement. Concerned, I asked my real estate agent if I should push for a price reduction. He assured me it was no big deal and that simply waterproofing the basement would solve the problem. He negotiated a $5k discount on the purchase price, and I moved forward with the deal.

Fast forward to now - after seeing water in the basement, I hired a professional to inspect it, and the news was not great. He found that the moisture levels in the walls are extremely high, indicating significant damage. He told me that without installing a sump pump system (at a cost of $12k), the foundation will continue to deteriorate, which could eventually lead to bowing basement walls—an issue that could cost upwards of $50k to fix.

The inspector asked if the previous homeowner disclosed any water damage. They didn’t and according to him, that gives me the right to pursue the previous owner legally. He also mentioned that, now that I have seen evidence of water intrusion, I will have to disclose this to future buyers if I don’t address the issue.

My question: Should I reach out to the previous homeowner? I feel like my agent really downplayed the situation. I am also disappointed because I found him on BiggerPockets and trusted him. This experience taught me to trust my instincts more and never skip due diligence, even in areas I am less familiar with like basements and water intrusion.

Any advice on how I should proceed would be greatly appreciated.

[Greg Scott]

I'd talk to more contractors on how to solve the problem. The easiest solution is typically keeping water away from the wall.  Improving grading or having downspouts drain into pipes that move the water away from the house often solve the majority of issues.  Fixing the inside of the house is usually the last resort.

Regarding disclosures, it wasn't like the sellers were able to pull one over on you. You found it during inspection and got a $5K discount. You KNEW about the problem, got compensation, and bought anyway. I'm no attorney, but I don't think you have a leg to stand on regarding disclosures.