How to Buy a House with Mold or Water Damage

Is there ever a situation where it makes sense to buy a house with mold or water damage?

Yes, there will be occasions where you will find a house that you like and then you find that the property has mold and probably is also suffering from water damage. But if you can get to buy the house for far cheaper than it would be sold otherwise, buying it might be a good idea. But what about the mold problem and water damage to the property?

Mold and water damage are problems that can be permanently solved. They should not be the reason for walking away from a decent property if the location is right and the price is fair. A home with mold or water damage can be a great investment because the seller will want to give a discount.

But to make sure you don’t regret the purchase, Markham Services talks about steps you should follow before concluding the transaction.

There are two major issues with buying a house with mold in it: mold’s effect on human health and the cost of fixing the problem.

The health impact of mold

Although mold is often linked to deadly diseases like cancer, the truth is there is no scientific basis for that claim. Mold is mostly harmful to people if their immune systems have already been weakened by other existing conditions.

The elderly and pregnant women may also experience difficulties if they come in contact with mold. But generally, if you and your family do not suffer from respiratory ailments, allergies, or asthma, you have nothing to fear.

This is not to say that prolonged exposure to mold will not harm people. The mold in the home should be removed immediately. If the mold is properly dealt with, there is no future risk to the home’s occupants.

Buying a house with water damage

Water can cause extensive damage to a house. And many times, the damage will extend well beyond the location of the original source of the problem. In addition to finding and correcting the source of the problem, the resulting damage must be dealt with.

These can include mold, weakened walls, defective insulation, wood rot, and even the presence of pests. To safely buy a house with water damage, you must be detailed in your approach. Here are the steps to follow:    

  1. The home inspection should have detected the presence of water damage or the seller may have disclosed it.
  2. Contact at least two contractors who have experience with water damage and have them assess the extent of the damage as well as identify the causes of the problem. This must include any mold and mildew problems.
  3. Get an independent appraisal of the home with the existing damage and deduct the cost of repairs from the home’s market value. Your bid should be lower than this price.
  4. Submit your bid, along with estimates for fixing the damage and its original cause. Negotiate with the seller.
  5. When you reach an agreement, request a copy of the sales contract and review the terms of the contract with your attorney to ensure all your contingencies are in place. Verify that the home qualifies for homeowner’s insurance.
  6. Apply for financing. Use a broker who will give you quotes from multiple lenders.
  7. Contact your insurance broker and get multiple quotes for homeowner’s insurance. It may not be possible to get comprehensive insurance until the water problems are solved. But the insurer will provide coverage against other losses.
  8. Close the deal after the mortgage is completed and begin repairs immediately.


The cost of mold removal    

  • Mold affects the value of a property, so get an independent appraisal to determine the home’s proper value
  • Only test for mold if it is not visible. Otherwise, go straight to assessing the cost of removing the mold
  • Determine the location and size of the contamination; this affects the cost of mold removal
  • Determine the cause of the mold growth; this ensures a permanent solution
  • Determine the cost of mold removal and fixing the original cause of the mold growth
  • Contact your insurance provider to discuss the risks and extent of coverage you can get
  • Talk to your real estate agent to arrive at a fair price for the property
  • Include all these costs and factors when you make your offer
  • Only go forward with the purchase when you have a sales contract that meets all your terms


In a property market where good deals are hard to come by, looking for properties that other buyers try to avoid can be a way to get the best deals. When you buy a house with mold or water damage, you give yourself an edge in the negotiations. This is because sellers know there are not many buyers who would be interested in the property, so they are motivated to negotiate. And this often means you can get a good deal.

However, if the cost of repairing the house is too high or there is no assurance that the problem will be permanently solved, walk away.