Should I buy an otherwise great property with a leaky basement?

Question

So I'm looking at duplexes in the Buffalo area and I found one that hits all the boxes. Its vacant, its turn key, its in a pretty decent area, its competitively priced, and should rent pretty well.

However, its been on the market for a long time and I suspect that is because of the leaky basement. My agent inspected the place on a dry day and the basement was wet (not flooded, but definitely wet). They do have a sump pump in there, but it seems like the basement leaks when it rains and all the electrical is in the basement so....

Is it worth it to buy and fix the basement? How bad can it be?

Is this like a $10k fix or is this a black hole that will consume my life.

Matthew Irish-Jones · Answer

I don't like basement issues. They can be foundational, ground water, etc... and they can lead to bigger issues like mold, tenant complaints and more. They are also notoriously hard to diagnose and fix. Why buy this property when there are more opportunities available?

Hong Yang · Answer

@Bruce Woodruff yep I am convinced. It is not worth the headaches.

Colleen F. · Answer

@Hong Yang if you want to do it you will have to take on the cost of due diligence and it is unlikely the seller will agree to pay for the actual inspection as it is to their disadvantage to have you do it. If you back out state law may require them to disclose uncovered issues to future buyers. This could be helpful to your negotiation. If you do an inspection you can ask for a concession and/or if you don't like the cost and want to walk consider it a relatively inexpensive lesson. That said the locals above have insight on what a leaky basement means in Buffalo. Those stone foundations are common in parts of the east and if that is the case, they will seep water and never be completely dry.

Bruce Woodruff · Answer

Like @Matthew Irish-Jones said, basements can be a HUGE problem. They will at least be a moderate sized issue and could drag on as you suggested....you fix one thing and it still leaks, fix another and there's more.Even a 'basement expert' can give you a bid and fail to fix it permanently...Either get this property for $100k less than market (for example) or just move on.....

Hong Yang · Answer

Thanks @Peter York for the insightful comment. I'll ask if the foundation is stone or block or concrete. My agent did not like the property because of the leaky but he didn't specify what type of foundation.

Peter York · Answer

Hello @Hong Yang I am a real estate agent in the Buffalo area and primarily work with investors. I would say that the extent of the issue depends on a variety of factors but the number one factor is the type of foundation. In the Buffalo area, and especially in the City of Buffalo there are a lot of stone foundations and these are often damp or even wet when it rains and this is usually not a significant structural issue. If the foundation is block or concrete this could be a more serious issue. Your agent should be able to guide you or recommend an approach if you really want to go after this property but often times if the property has been on the market for a while and it is because of this issue it may give you negotiating power. Best of Luck! - Peter York

Melissa Hartvigsen · Answer

Hello @Hong Yang,I am a realtor, and I would never advise my client to buy a house (or duplex) with a leaky basement without doing further investigation. Without knowing the source of water, no one can ball park the cost for you. During your due diligence period for home inspections, you should have professionals come out and give you estimates and base your decision off of that. If the contractors who do this type of work in your area are not available during the existing inspection period, your should instruct your agent to negotiate with the seller to allow you more time for due diligence. Once you have estimates, your agent should help you either negotiate a lower price to offset the cost of the repairs; or have the seller complete the repairs (using a mutually agreed upon contractor) prior to closing, and allow you to re-inspect to make sure it has been done correctly.If the seller is unwilling to give the extra time for you to gather bids, then personally I would walk away.Melissa

Bruce Woodruff · Answer

You kinda said it all right there...why bother with this one? Just find another.....you may pay more, but spend less on the fix and less future headaches and money outgo....

Hong Yang · Answer

Definitely I'll go see the place in person before the offer. Its just easier to schedule video call viewings instead of driving 2 hours to see a house that is probably not that great.

Hong Yang · Answer

Good point. It is not the only property for sale.