Today’s show is about the top inspection defects that could make buyers think twice before sealing the deal.
Reuben and Tessa discuss various foundation problems which can be caused by failed water management systems. This led them to talk about soil conditions in the Minneapolis area. They tackle their inspection experiences with hidden fire or smoke damage, electrical wiring, stucco siding, roof or shingle problems, and sewer issues.
Bill shares that these defects can be inspected, found, and fixed.
Send your questions to firstname.lastname@example.org.
The following is a transcription from an audio recording. Although the transcription is largely accurate, in some cases it may be slightly incomplete or contain minor inaccuracies due to inaudible passages or transcription errors.
Bill Oelrich: Welcome everyone, you’re listening to Structure Talk, a Structure Tech presentation. My name is Bill Oelrich, alongside Tessa Murry and Reuben Saltzman. As always, your three legged stool coming to you from the Northland, talking all things houses, home inspections and anything else that’s rattling around in our heads. Well, welcome to today’s episode where we’re going to discuss the top five biggest finds that a home inspection will reveal. Big bombs, let’s just call it that. ‘Cause these in theory could blow up a deal. And Reuben, Tessa, you’re gonna lay it all out, right?
Reuben Saltzman: Oh yeah, I definitely have my top five. And what’s special about today’s show though, is that Tessa has her top five and Bill, you’ve got your top five. Right?
BO: Absolutely not.
RS: What? What?
BO: No, because I have an opinion about everything you guys are going to say.
RS: Well, and I have an opinion about all I’m gonna say too, but…
BO: I don’t have a top five. I do have a one with a bullet that I would probably walk away from.
BO: And then I have opinions on most of the rest of it.
RS: All right, and with these, I want us, Tess, let’s just make sure that we’re not being super generic because I see so many of these lists of like, oh the top 10 things that your home inspector may reveal. And it’s like the top 10 categories of things that we look at. It’s like number one, electrical problems, number two, plumbing problems. And it’s so generic, it’s just worthless. And I wanna be specific, like pick a certain comment that we might use in our inspection software and say like, “These are the top five comments that might go in a report.” Let’s drill down to that level of specificity. How does that sound?
Tessa Murry: I like it. I like it. Yeah, you know, just thinking about some of the past inspections I’ve done and thinking about it in terms of the most significant discoveries from my experience of things that I found that just devastated, you know, buyer’s understanding of the house, and I can’t say that it’s prevented them from moving forward with the deal, but it definitely freaked them out and made them think twice, I think before buying the house.
RS: Okay, good, we’re on the same page then.
TM: Okay, good. Let’s do it.
BO: Alright, so let’s start with your first one that you’re going to say, this might not be number one on your list, but what’s your first very specific bomb that gets thrown into the real estate transaction.
TM: Okay, well, like you just said, I don’t have a number one, two, three rank. They’re all the same playing field, same level here, in terms of devastation factor, but the first one that I was thinking about was wood foundations in houses, and I know we’ve talked about them on past podcasts. They’re not all that common in our area and you don’t run into them frequently, but when you do, a lot of times, if you know the right places to look and you can dig a little bit deeper, you’ll usually find some evidence of water intrusion in the basement. And when you do on a wood foundation, that’s a big problem. Obviously, it is… You know, the foundation is what holds up the house, and when it starts getting wet and rotting, then you have major structural foundation issues and it’s usually not a cheap, easy thing to fix. And sometimes these wood foundations, they’re not obvious. You can get around the entire exterior of the house…
TM: Inspecting the whole thing, and then the last few steps that you’re taking on the outside, you realize, wait, that’s… I’m not seeing… I haven’t seen any concrete block, I haven’t seen any poured foundation material, and I’m seeing this plywood covering, like what’s going on here?
TM: And so I think one of the first wood foundation houses I had, I almost… I almost missed it because of that.
RS: I always wonder if I’ve ever missed one myself, some of the times when you find it out, it’s so late in the game and you’re like, wait a minute.
TM: Yes. Yeah, and your mind blows. And you’re just like, Oh my God. So yeah, wood foundations. And a lot of times too, they’re completely finished on the inside, like you said, Reuben, like you can’t determine it from the inside and you have to know what you’re looking for when you’re on the outside.
TM: So they can be tricky.
BO: Oddly enough, you selected the one thing that would cause me to walk away from a house. Not because I think they’re awful and they’re terrible and they’re nasty. I’ve just owned enough one-off things in my life that I’ve had to try to turn around and get rid of, and when it comes to that, it’s always a harder negotiation. I’ve done this with vehicles, I’ve done it with boats, I’ve done it with a couple of different things. And I’ve just decided I don’t want these kinds of weird one-off things.
RS: Well, thanks, Bill. I was this close to finalizing our partnership with the American Wood Council for this podcast, but I can throw that out the window now.
BO: But I will say this, I mean the material that is used in a wood foundation can be wet all the time and it shouldn’t be a problem. It’s meant to be in contact with moisture and… So it really shouldn’t be a problem. I just don’t want it, I don’t wanna deal with it.
RS: However, I sat through a seminar by this guy, it’s the best seminar I’ve ever been to, it was an eight-hour seminar on permanent wood foundations. And the guy teaching this said that if you’ve got water and a wood foundation, you can see that from the inside, you have a completely failed water management system. There are so many layers, and every one of these steps is to make sure that no water ever touches that thing. So many things in place to make sure that it does not get wet. And once it does get wet and you can see that water on the inside, every one of those layers has failed and you’ve gotten a serious concern. So I just don’t want people to get the idea that you got a wet wood foundation, it’s okay. It’s not, it’s not, it should never be wet?
BO: All right, fair enough.
TM: Oh, gosh and how many times have we seen all of those layers fail?
RS: So many, so many, it’s…
RS: It, feels like the majority of permanent wood foundations. Yeah. People know that there’s all these different layers, so they get really relaxed about it, and they don’t put gutters on, and they have bad grading and yeah. All this other stuff.
BO: Okay. Reuben, what’s one of your top five.
RS: I wanna change mine now because that’s much better than what I had. I agree with, Tess, but what I had written down was some specific problems with concrete block foundations. And really I’m thinking about long horizontal cracks, where you’ve got big movement of the foundation walls, where you’ve got cracks.
RS: You know, half inch, inch thick cracks. And you’ve got obvious signs of the wall starting to collapse or bow in. That’s a big concern. It doesn’t happen a lot. It’s infrequent, but usually you can, you can guess where it’s gonna be happening just by walking around the outside of the house. And it’s exactly what we just talked about. It’s poor water management. It’s soil pressures against the foundation walls, having no gutters and the ground slope back towards the house. All that water pools, freezes, and then it pushes the foundation walls in. That’s a scary one. People freak out about those issues.
TM: That would be one of the things I wouldn’t wanna deal with if I was buying a house. It is fixable, but I mean, you’re talking about rebuilding portions of a foundation. No, thanks.
BO: Oh, not necessarily. You might remove some dirt and put some, you know, some bracing in there. Maybe try to push it back or something like that and then regrade. And, but what do you see…
RS: Yeah, there’s a lot of ways to deal with it. You can use big plates that go out in the yard and and helical piers and you can use these reinforcing beams. There’s lots of ways to address it, but it freaks the heck out of people anyway.
BO: Well, yeah, but where do you always see it? On these mid fifties Ramblers that are 60, 70 feet long it seems like, and they’ve got these gigantic basements, and there’s nothing to brace back that wall in the middle.
BO: My little 28 by 30 foundation here in the city is not gonna have a bowed wall because there’s probably not enough pressure on it. It’s not long enough, really, anywhere. There’s a corner bracket at multiple points. Plus I have a center concrete wall that goes down, right? They say, it just depends… The wide open spaces leave room for these kinds of things to happen. So.
RS: That’s right.
TM: Water and soil conditions have a huge, you know, part to play too. And we, living in the Twin cities, we know of certain areas too, that houses tend to have issues with foundations because of the water table and soil pressures and all that stuff too.
BO: There’s one specific suburb that is, is very nice in the Twin cities, that has some pretty poor soil and it’s got a lot of Ramblers.
TM: Call it out.
BO: I mean, there’s pockets of Edina that have lots of Ramblers in them and not all the soil in Edina is all that great. When a lot of those houses were being built, those big Ramblers, they weren’t touching up against all the marginal land. That happens to be sort of a pocket of not the greatest soil in it. Right?
TM: That is my first time hearing about Edina Ramblers being a problem.
BO: I didn’t say they’re a problem. I just said there’s some pretty heavy soil in Edina. We, that’s, would we all agree? That’s a fair statement.
RS: I’m not qualified to comment.
TM: Me neither.
BO: I’ve seen a lot of sump pumps running a lot in Edina, haven’t you?
RS: I suppose I have.
TM: Yeah. I was thinking of, you know, Minneapolis along Minnehaha and of lakes. I mean…
RS: It’s so bad.
TM: Really bad around there. It doesn’t matter what size your foundation is. You can have a 20 by 20 foundation and it’ll be bowing or shifting or there’ll be some major cracks happening.
RS: Well, and not only that, there’s another area. We just discussed this on our internal structure, tech communication platform, about an area in Robbinsdale where it was really similar. It reminded me of that area in Minneapolis.
RS: Along the Minnehaha. Where I’m not gonna talk about the exact location, but I believe we had an engineer at the city say they would never buy a house in this particular area.
RS: It scared the heck outta me.
BO: Well, Highland, like Highland Park too and along the river has some places where they have these hydraulic sump pumps that run like nonstop. And I don’t know if it’s because there’s a lot of springs over here. It’s kind of my neck of the woods. ‘Cause there’s a lot of Ramblers in my neighborhood too. What’s next for you?
TM: Well, Reuben, you kind of stole mine, I guess. I had written down structural damage, and that I’m being way too generic there. And since you’ve already covered like foundation problems, I will hit on another, another thing I’ve seen that can be structural damage that really freaks people out: Fire damage. So there was one house I was inspecting. It was in, I think it was in Minneapolis. And it was an older house, like 1920s or something. And it had been, it had been flipped. It looked beautiful on the outside. It was nice on the inside, all new paint, new flooring, new kitchen, everything looked great. And then got up to the attic, opened up the hatch, got in the attic and everything was just black. Charred. The rafters looked like charcoal. I could poke my all through it. It was just dusty. And I thought, oh my gosh, how… Like, I should not have walked on this roof. You know? Yeah. I’m really lucky I didn’t break a rafter or something. That was pretty shocking. And it would take a lot of, you know, structural work and carpentry and framing to make that safe again. I don’t know what happened on that one. I wish I could tell our listeners, you know, whether the buyers moved forward with it or not. But fire damage seems like a… Hidden, hidden fire damage is a big, scary, unknown for a lot of people.
RS: Yeah. And you know, I have personally never inspected a house where I saw signs of a previous fire and I was really concerned about structural damage. What I’ve seen, I mean, dozens, maybe a hundred, probably dozens of times is where there’s signs of a previous fire. It’s mostly smoke damage. I mean, you’ve got black in the attic, but very little charring, but it was enough where they sprayed everything white, mostly to conceal the odor to just kind of…
TM: Encapsulate it.
RS: Conceal that smoke damage, encapsulate it, or I’ve seen it in basements too. I’ve seen both of those. And we definitely don’t miss it. You talk about it, you explain what this is to your clients, and most people kinda go, “Okay, alright, got it. I wish I would have known that ahead of time.” But I think most of the time the deals will go through. But I remember there was one situation where I had some clients, the basement was sprayed white, and later on a contractor told him, it’s only sprayed white because you had a fire here. And they freaked out and they were ready to move out because…
TM: Oh wow.
BO: In the basement?
RS: Yeah. Because they thought that they were gonna be breathing something bad and I don’t remember what else. And I went over there and we picked up the wood, we did everything, there’s absolutely no signs of a previous fire. They just painted it white, that’s all it was. But they were ready to move out of that house. So it does freak people out, there’s no doubt about it.
BO: Okay. Reuben, your second, very specific concern with the house.
RS: All right. Second one, this would be stucco siding failures. And we’re talking about stucco put on probably in the ’90s or 2000s, and it’s experienced water intrusion, and everything behind the stucco is a rotted mushy mess, that would be number two. And I’m being really specific because we’ve seen a ton of them. This is not just some one-off thing where it happens occasionally, there’s a lot of those houses.
BO: Yeah. I probably won’t buy that house either. I just won’t buy the stucco houses from the ’90s and…
RS: Watch it, watch it.
BO: Yeah. Hey, if they don’t have a problem today, they’re gonna have a problem at some point…
TM: Anyone that’s listening to this podcast and doesn’t know, Reuben lives in a house that’s… Is it ’90s or early 2000s, that’s stucco?
RS: Early 2000s, stucco on the front.
BO: Yeah. But it’s just the front facade, when you tear off that OSB, it’ll be nothing to replace.
TM: And you had it tested, you had intrusive moisture testing done, which is something we… I know, I could, I would say, Bill, I don’t have as strong as feelings as you do about never buying a house that’s stucco, that’s a newer build, but if I bought one, I would definitely test it, do intrusive moisture tests beforehand.
RS: Yeah. That’s exactly my feeling. I’ve never said I wouldn’t buy a stucco house. I just wouldn’t buy it without having it tested, that’s all.
BO: And so you’re gonna continue to test over time to make sure that things aren’t changing?
RS: And I have. Yes.
BO: Okay. Good for you.
TM: How often do you do that?
RS: I’d say as often as we do a video shoot at my house to demonstrate the process.
RS: No. But seriously, if nothing has changed… The house was built in 2002, it’s 20 years old now, it’s never experienced water intrusion, nothing has changed. All the caulking has been maintained. I really don’t see any reason to test every year, maybe once every five years. Seriously, I really have no concerns about it.
BO: Tessa, number three.
TM: Alright. Reuben, I bet you have this one on your list too, it’s one of those electrical things. Aluminum branch-circuit wiring.
RS: Boom. Yup, I have the exact same thing written down, Tessa.
TM: Yeah. I think that is the one thing we’ve talked about so far of all these defects that I have seen the most deals fall through on, where people just are like, “Okay, I’m not moving forward with the purchase of this house.” Once they understand what it is and the risk involved with buying a house with that and the cost of potentially fixing that issue. For anyone that’s not listening, aluminum branch-circuit wiring, we’re talking about aluminum wiring that goes to lights and receptacles, outlet, that’s aluminum, and we find that in houses from the mid ’60s to the mid ’70s. I’ve even seen I think as late as like mid to late ’70s in some houses. And aluminum has a much higher kind of expansion contraction rate than copper, and so at all those points were the wire stops and starts, junction boxes and whatever at switches and outlets, then that wire will expand and contract when it heats up and cools down, and then you get a loose connection which can lead to arcing and sparks and fires. And so this type of wiring is a lot more prone to fires and to safety issues with it, so Reuben, you’ve got a great blog about aluminum branch-circuit wiring. Anyone that’s listening to this and wants know more, check out Reuben’s blog on it, but this one seems to be the number one deal killer that I’ve seen.
BO: Remind me again why the larger wires are just fine to be aluminum, but yet the smaller branch-circuits, the 14/2s, the 12/2s seem to be a problem?
RS: Well, it’s not the fact that it’s a larger wire, but you minimize the number of connections. It’s typically gonna connect to a circuit breaker that’s rated for aluminum conductors, and then it’s gonna go directly to the appliance, then it’s gonna make one more physical connection right at, say, a receptacle. Let’s say if we got an oven. It’s gonna go right to the oven’s receptacle, and then the receptacle might be rated for aluminum conductors and the alloys in those newer aluminums are far less expansive. So it’s all these different things put together where you have far fewer points of potential failure.
BO: In fairness to aluminum, and I probably won’t want this either, but I’m not sure I would completely walk away from the perfect house in the perfect location because it had aluminum branch-circuit wiring, there’s fixes. You can add pigtails in the junction boxes and so on and so forth. It’s just is there enough room inside these junction boxes that have all this stuff stuffed in there. And then connect, make all these connections with copper or whatever. I get it, it’s a big deal, but sometimes, as they say, in real estate, location, location, location.
TM: Yeah, I was gonna say, there was a guy who moved forward with the purchase of a house that had aluminum branch-circuit wiring, ’cause he was an electrician doing this inspection. And he’s like, “Oh, all right, I’m gonna rewire this house.” And he did it, but I think…
TM: Yeah, I personally wouldn’t wanna deal with that. I wouldn’t wanna hire an electrician to rewire my house and spend tens of thousands of dollars doing that. How much do you think that would cost, if you just completely rewire a standard, like 2000-square-foot house these days?
BO: Tessa, it depends, come on.
TM: Give me a ballpark.
TM: Okay. Thank you.
BO: I have no idea.
TM: That sounds okay to me.
BO: ‘Cause for me, if I guess at this, I’m just like, “Pick a number out of the air.” And it’s likely to be right as I am.
RS: I need no variables whatsoever, Bill. It’s $22,000 on the nose.
BO: All right, all right. Okay. Getting over to you, what’s your third big bombshell?
RS: Oh yeah, that was Tessa’s. I was thinking that was mine. Okay, this would be a roof problem, a roof that needs replacement. Nobody knows about it, they’re thinking everything’s great, and the roof is toast. That one always freaks people out too.
TM: That’s the least scary thing in my mind, I didn’t put that on my list, because a roof needing to be replaced and having issues is very common and it’s a routine…
BO: We’re just talking shingles now, right?
TM: Yeah, it’s a routine maintenance thing that every roof is gonna have to be replaced at some point. So in my mind, that’s… Yeah, people freak out about it, but it wouldn’t deter me as a buyer.
BO: I’m not worried about a roof. And here’s why, it’s one of these things I get people expect it to be good and working, right? But as you just said, Tessa, in the course of your ownership, unless you’re gonna be there for just a couple of three years or something, you’re probably gonna be replacing a roof.
TM: But going down a little bit of a tangent. One thing that would deter me is buying… I would not wanna buy a house with a flat roof here in Minnesota. I wouldn’t wanna deal with that, that would deter me. I wouldn’t wanna have to deal with the maintaining a flat roof and rubber membranes and leaks and no attic space to properly air seal or insulate and just… I mean, physics, to go against physics in general. I can’t get behind it, at least not in our climate. If I was living in Arizona or something, that might be fine, but not…
BO: I would be much more inclined to object to gable-litis than I would a flat roof.
TM: Gable-litis can cause problems, too. Sometimes gutters can’t fix them.
BO: Tessa, we’re back to you, number four.
TM: Well, gosh, we’ve covered most of my stuff. I think the last one that I have is wet basements. Wet basements or basements that may not be currently wet at the time of the inspection, but there are telltale signs of water intrusion with rotted tack strips and mold issues that have been tried to be hidden. I think that’s… I’ve seen people really freak out about that.
RS: Agreed, I thought about putting that one on my list. Like concealed moisture in finished areas. Nobody wants to deal with that, yeah.
BO: Okay, Reuben, what’s bringing up the rear on your list? Knowing that aluminum branch wiring was on there, and now you’re done after this.
RS: Yeah, this is my last one. You guys can probably guess what this one is too. I wouldn’t be surprised if Tessa had this for her last one, and it’s big sewer issues.
TM: Oh gosh. How did I not have that on my list? I wanna add that to my… I’m adding it to my list… Thanks. Yeah.
RS: Yeah, yeah, we’re both trying to steal each other’s stuff here, for sure, but that’s a big one. And stuff that people usually don’t know about and it can be really expensive. Not always, but usually sewer digs can be very expensive.
TM: It can put you in a really crappy situation, too.
TM: And back ups, sewer back ups, nobody wants to deal with a sewer back up in your basement either, or in your house.
BO: Well, if the line’s broken, it’s just running to God knows where.
TM: Well, I mean, yeah, that’s true. Not all the time do you have a backup evident when you’ve got sewer issues.
BO: The backups are probably more likely because of roots.
TM: True, yeah.
BO: Yeah, so much of this can be fixed, it’s just a matter of finding out that the issue is there. Stucco is obviously in your face from the moment you pull up. You know the year of the house, you know if it’s got stucco, so that’s like, “Okay, I gotta cross that off.” Wood foundations are something you’re gonna find, and then you’re gonna have to have that conversation with somebody. I feel like that’s a variable that you can’t negotiate. And then everything else to me can be discussed, everything else can be discussed. So what we end up doing then is finding out what’s there and let’s have a conversation with it, with the agent, with everybody before you own it, because the last thing you wanna do is actually own something that you didn’t know about.
RS: Yeah, surprises are no fun.
BO: Well, they’re no fun and people just they want blood at that point. “I’m taking money out of my pocket, I want you to take money out of your pocket, you should have known this,” or something of that nature. It always seems funny though that they never seem to be mad at the sellers, they’re only mad at whoever didn’t find it. And fair enough, they hired us to find things, I get it.
TM: I’ll say with the wave that have foregone the home inspection in the last few years because of the crazy market, people might be mad at sellers now instead of inspectors, if they didn’t get a home inspection, that’s scary territory.
BO: Yeah, well, I think we should bring this episode to a close. I hate to have been so cavalier of my only having a couple real deal breakers, but you guys are so much more detailed about it. So I’m stuck on location, location, location. Good real estate is hard to come by, so when you get a chance to buy it, you wanna jump on it.
TM: Money can fix anything, right? But you can’t… Money cannot… I guess you could move a house, you could argue that you could move a house. But yeah, when you buy a house the location does not change typically.
BO: Right. We had to overpay for ours so many years ago. And at the time it felt really stressful, but looking back, you’re like, “Well, that was a no-brainer.” And you should have seen the warts that came with this piece of property. Holy cow, it was ugly from tip to toe, from inside to out. But over time, it becomes your home, and you start fixing things and you start making it your own. And so what, it becomes part of the process, and that’s what makes a house a home, not just a house. All right, enough said.
TM: Words of wisdom spoken by a builder.
BO: Nobody wants to hear me go anymore.
BO: No, hey, listen, I know everybody’s like, “Real estate, real estate, real estate, buy real estate and flip it and make money and go get a bigger one.” And I’m a hold person in real estate, buy and hold, but that’s just me. And different strokes for different folks. All right, enough said. I’m gonna put a wrap on this episode. You’ve been listening to Structure Talk, a Structure Tech presentation. My name is Bill Oelrich alongside Tessa Murry and Reuben Saltzman. As always, thank you for listening. Please send your questions. We are always happy to hear from our audience. Thanks for listening.