Water damage 101: what homebuyers need to know

Homes & real estate
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Water damage 101: what homebuyers need to know

Homes & real estate

If you’re thinking about buying a house that has water damage, remember this: water is known as the universal solvent because it can dissolve more substances than any other liquid. Wood, stone, sheetrock, your savings account…

This isn’t to say you shouldn’t buy a water-damaged house. They offer the potential for some real savings. But if you’re considering it, definitely do all of your homework ahead of time and consult with real estate experts.

After all, you don’t want to put in all the work to qualify for the best home mortgages just to end up with a (soggy) money pit.

Let’s go over what you need to be aware of:

Inspect for Damage, Mold, and Rot

Be aware that these are three different areas of concern that will likely require at least two, if not three, different home inspector specialists.

They’ll be able to assess such things as:

  • The source of the water damage. (It matters if the water came from a leaky roof, a flooded street, or a burst sewer pipe.)
  • How much of the home was damaged and for how long?
  • Was the damage fixed or merely cleaned up after?
  • Are the restoration reports, if any, accurate?
  • Whether mold and dry rot are present and to what degree?

Mold and Dry Rot

These are very difficult to detect—and in the case of mold, literally toxic to breathe—and so will require specialist inspectors to potentially look under and behind pretty much everything. The wallpaper, the carpet, and actual flooring.

Don’t skimp here. If left undiscovered, either or both of these have the potential to turn a house into a mandatory tear-down.

Consult with a Contractor

After you’ve determined the type(s) and extent of the damage, you’ll need to know how much it will cost to repair the home and make it safe to live in.

Repair costs are the number one determinant of whether you should opt for a water damaged home.Be sure to consult with at least two or three contractors experienced in repairing water-damaged homes. You’ll want to provide them all of the reports from the owner and your own inspection team.

Tell them you’ll need estimates for repairing both the cause of the damage and the home itself as well as dealing with mold and dry rot.


Insurance is a potential deal-breaker here because if your policy costs an astronomical amount or offers little real coverage, passing on the home may be the smarter investment in your future.

You’ll want to purchase the most comprehensive policy available. Ideally, one that will still cover you if any problems from the previous water damage appear in later years.

And even if your newly repaired home isn’t in a designated flood area (but especially if it is), flood insurance may be a smart move. As you’ve no doubt come to know by this point, even a small amount of water can do a tremendous amount of costly damage.

Submit Your Bid

Here again, you’ll want to consult with an experienced real estate agent.

Your offer should take into account the market value (which your agent can provide) of the home minus the expected costs of repair.

Of course, there’s nothing to keep the owner from rejecting your bid, so depending on how much you really want the home, you may still need to negotiate to find a price acceptable to both sides.

If the owner accepts your bid, begin your repair and restoration work as soon as possible. Time is not your friend.


Water-damaged homes represent a high-risk, high-reward opportunity. However, with the proper involvement of experienced professionals, you may end up with just the home you were hoping for, or even more home than you otherwise would have been able to afford.