Buying a home: How to avoid a money pit

On the British TV series Help! My House Is Falling Down, developer Sarah Beeny helps families facing serious problems with their properties. We're talking things like woodworm, mould, rat infestations, shifting floors, sewage problems, flooding and erosion.

If you're in the market for a new home, you want to do everything in your power to steer clear of such dreadful circumstances. Fortunately, there are many ways to avoid sinking your money into a money pit.

"Check your emotions at the door right off the bat," says Bruce Hunter, owner of B.C.'s Hunter and Associates Inspections. "If you have an attitude that you're prepared to walk away, then you'll be in a much better position to make an objective assessment."

Don't be taken in by things like a garden full of beautiful plants — especially if you don't have time to look after them. Same goes for shiny stainless-steel appliances and laminate flooring: don't be wooed by the wow factor.

"A money pit is a home that has been allowed to deteriorate from a lack of maintenance then has had insufficient or even dishonest maintenance performed to hide the actual state of the house," says Tony Braid, owner of Victoria, B.C.'s All-Points Home Inspections. "A fixer-upper is different. In a fixer-upper you can usually see the problems. In a money pit, the rot is just under the new paint.

"Be aware that all houses need ongoing maintenance," he adds. "Ask questions, be slightly suspicious, trust your instincts, and hire an experienced home inspector. Do your due diligence."

Our experts share other tips to bypass a potentially problematic property:

Do your research
"A lot of times you can go to the city to get a history of the house, especially if a home is 50 years old or older," Hunter says. "Maybe there is a buried oil tank that's not on the disclosure statement."

If you're buying a condo, be sure to read over at least two years' worth of strata-council minutes and inquire specifically about the building envelope. If possible, talk to current owners or tenants.

Define the term "renovated" in real-estate listings
Don't be fooled by simple cosmetic work. Just because a home comes with a fresh coat of paint and some new stainless-steel appliances, doesn't mean it's structurally sound. You could get dinged for major repairs down the road.

"A home might have been updated, but often times perimeter drains haven't been changed, and that can cost tens of thousands of dollars," Hunter says. "Or maybe the electrical wiring hasn't been changed."

Follow your nose
"Be aware of any musty smells, especially in the basement," Hunter says. That can be a sure sign of mould, which mustn't be ignored. And while you're down there, take a peek behind storage units or big appliances for rodent traps.

Find out if the mortgage-helper suite is legal
An income suite is a popular way for homeowners to purchase a larger home, while maintaining a lower mortgage payment. But before you become a landlord, you need to be sure your rental unit is up to code.

"There are a lot of unauthorized suites, and you need to know what the ramifications of that are for you," Hunter says. "A lot of insurance companies are taking a dim view of some of these -- say a house was built as a single-family dwelling but now there are two or even three families living there."

Look beyond the house itself
"It's important to look at the property," Hunter says. "If there are fences falling down because they're rotten, it could cost $200 a section to replace and that could cost thousands of dollars. Find out who owns the fence and whose responsibility it is to replace or repair it."

Buy new
"New houses built by reputable builders almost always have a warranty," Braid says. "So over time, if the house ages inappropriately, the buyer will have some recourse."

Be especially careful about outside entertaining areas
Often, decks are built without permits and don't meet safety requirements, Hunter says. "The media has reported numerous decks that have collapsed in recent years with deaths resulting. Decks carry a huge legal liability and must be constructed to handle large groups of people and the activities that come with that during the summer months."

Ask your inspector what standards of practice he adheres to
Don't assume your inspector will cover things such as asbestos, mould, wood-destroying organisms, or environmental hazards, Hunter cautions. Ask for a copy of the standards of practice and find out what won't be included in the inspection. From there, you can seek expert advice from other professionals, such as general contractors or engineers.

Seek out an independent inspector
Although many inspectors get the bulk of their work from realtors, Hunter maintains that independent inspectors are not influenced by another party. "They report and document everything they observe without favour," he says.