Selling a House With a Leaky Basement: Do You Need to Fully Waterproof?

During a one-inch rain, 1,250 gallons of water will fall on a roof of a 2,000 square foot house. And as a homeowner with a perpetually leaky basement, you’re used to being at the mercy of the rain gods. Every time it storms or the snow thaws, you tip-toe down to the stairs for the verdict: Did the basement manage to stay dry?

You’re so used to seeing water down there by now that it hardly fazes you when you see water pooling in the same old spot. But as you look ahead to selling a home with a leaky basement, you wonder if buyers will be so cavalier.

Hiding water damage in your home can result in a lawsuit, so don’t trust the hearsay on your block from neighbors who probably also have wet basements on this matter. Consult our guide with advice from a Rochester, New York real estate agent who’s seen a lot of leaky basements and basement waterproofing specialists on your three main options:

1. Do nothing about the leak, but share everything you know.
2. Direct water away from the house to stop the leak.
3. Fully waterproof the basement and provide your receipts.

1. Do nothing about the leak, but share everything you know. 

This might sound like the easiest route — but there are drawbacks to it. Water damage or a known water leak is just about the last problem a buyer wants to inherit. Left untreated, water in a home can lead to a host of other issues, including structural damage, mold, and damaged possessions and furnishings. And academic studies show that past flooding events can drop a home’s value by 15% or more.

However, it’s one scenario to have a basement that flooded with a foot of water due to a big storm or hurricane, and another when the unfinished portion gets a little damp during certain times of year. In top-selling real estate agent Mark Siwiec’s Rochester, New York market, buyers expect any pre-war home to have some sort of moisture seeping in.

“Older structures are always going to have some degree of water infiltration,” explains Siwiec, who’s worked in real estate for 40 years. “Locally, we experience it for a few weeks in March or April, during the spring thaw when the ice is melting outside.”

So as a first step, get the opinion of a local real estate agent on the market sentiment toward leaky basements. Then, if you decide to take this route, be prepared to do the following:

Check up on your local real estate disclosures.

When everyone on your block has a leaky basement, you might be tempted to let that little detail slip under the radar when you sell your home. However, failing to disclose the matter could put you in legal trouble with a buyer down the line.

Your agent will provide you with the proper disclosure forms for your state. In many state disclosures, you’ll find a “Yes/No” checkbox asking about evidence of water in the basement in the property condition section. If you check “Yes,” you may need to provide more information below the response.

If it’s not under property conditions, it might be under a section for known damage, such as in Alaska’s disclosure form, or the section on basement and crawl spaces like Kansas.

Get “TMI” with it: Be specific.

As you can see, many states have explicit disclosure requirements around water intrusion and water damage. Other state rules will allow you to make a blanket “disclosure disclaimer” while some put the onus on buyers to check for problems with a “caveat emptor” approach. However, real estate experts advise erring on the side of disclosure, transparency, and honesty with any kind of “material fact” about a property that could impact its value, such as a water leak.

If you have a case of a rare but predictable (and manageable) leak, Siwiec says that sellers should go one step beyond the standard disclosure. In this type of scenario, if the leak is really no big deal, then tell buyers why. The more information a buyer has about the leak and when it occurs, the more at ease they will feel about purchasing your home.

“If you can explain to buyers that it’s a two week period of time, that it’s a rivet or trickle, I find that buyers really react to that. They love the specificity,” explains Siwiec. So, even if the state disclosure is a simple “Yes/No” checkbox, use the addendum found at the end of the form to expound or have your agent relay the information to the buyer’s agent.

Whatever you do, don’t lie.

It’s possible for a buyer to sue you over undisclosed water damage weeks or years after the sale occurs if they’re able to prove you were aware of the issue at the time of sale. If they can show breach of contract or misrepresentation, they may be able to come after you for costs to repair the water damage and coverage for their own attorney fees.

2. Direct water away from the home to stop the leak.

Siwiec recommends that sellers try rerouting runoff away from the home externally before exploring costly basement projects. Here are a few solutions to test:

Change the slope of the dirt.

According to SFGate Home Guides, a lawn should slope “2 to 3 inches for every 10 feet away from your house’s foundation.” Without this slope, standing water can collect and cause water intrusion. Thankfully there can be a simple solution for this leak culprit: “Sometimes, all that’s required is pitching the dirt away from the house, and boom, you’ve solved the issue,” explains Siwiec.

More formally known as regrading, this solution aims to prevent pooling in the wrong places by enhancing the slope away from your home in key places. To change the slope of your lawn, a professional landscaper will use a grader and fill dirt to gradually change the level of the yard, a service that costs $1,975 on average, according to HomeAdvisor. Due to the elements, the lawn and slope will naturally erode over time, so the newly graded lawn will require some upkeep.

Extend your downspouts.

If your basement leaks most often during a storm or after a winter thaw, check your downspouts. Your downspouts collect the water from the roof and are supposed to tunnel it away from the foundation. However, if your downspout deposits water at the base of your home, the runoff could seep into the basement, causing a leak.

To prevent this, you can try installing a downspout extension. An extension should run at least three feet away from the house, but up to 10 feet if the yard is flat. Extensions, like this affordable option from Amerimax, should easily slip over your existing spout and divert the flow of water from the base of the home out into the yard. You can even cover a low profile extension with mulch or decorative stones to make it blend with your landscaping.

Downspout extenders, though easy and cheap, might not fix the leak 100%. You may need to pair it with regrading or another water-diverting solution.

Put out rain barrels.

Another idea: Place a rain barrel under your downspout to collect and hold water for later use. The Natural Resources Defense Council recommends using a rain barrel not only to prevent house leaks, but also to collect and conserve rainwater for washing the car or watering the lawn in the future. You can get a basic 60-gallon rain barrel, like this one from Great American Rain Barrel available at Wayfair for under $100.

While these outdoor solutions can help you put a stop to basement leaks for a manageable cost, they don’t relieve you from your disclosure obligations as a seller. You’ll still want to let the buyer know about the history of the water leak, as well as any measures you took to address it.

3. Do a full-fledged waterproofing.

If you want to make your basement watertight and market a dry basement to buyers, you’ll need to explore a complete interior waterproofing project. “We always recommend a homeowner waterproof their entire basement, which means putting a full system around the entire perimeter of the home,” says Flynn Cochran SVP of Groundworks, which owns and helps operate over a dozen foundations and waterproofing businesses across the U.S. Here’s what Cochran’s process looks like, from start to finish:

Remove water-damaged materials.

Waterproofing begins with the removal of any materials that have held moisture from previous leaks. That includes carpeting, waterlogged drywall, and flooring. This initial step allows you to start the waterproofing process from a clean slate, and strips any residual moisture from the room.

Install a drain.

Depending on the size and severity of basement leakage, your waterproofing professional may recommend a French drain system, trenches in the yard, or an expeditor yard pipe system. These solutions range from $1,889 and $5,491 on average, and while each tackles the problem a little differently, they all involve digging a type of drainage ditch in the yard that guides moisture away from the foundation and basement of the home.

Put in an interior liner.

An interior liner to prevent water intrusion can take different forms.

• Concrete waterproofing involves a professional coating of the walls of your basement with a thick layer of concrete to prevent future water seepage. This method costs between $500 and $1,000 on average and because of its industrial finish, might be best for basement storage spaces.
• Alternatively, you can apply silicate sealers to the walls, which cost between $3-$9 per square foot when professionally installed. The benefit of a silicate sealer is when the compound is applied to the wall, it doesn’t compromise its look, according to HomeAdvisor. The walls will look the same, except they now repel water.

Install a sump pump.

Finally, there’s the sump pump installation. A sump pump mechanically redirects water from the basement away from the home using a pump whenever it detects water overflow. Located in the deepest part of your basement, the pump costs $1,217 on average to install.

Provide a warranty.

The benefit of a professional, full-fledged waterproofing job is the reassurance it can provide a buyer. “Our systems come with a 25-year warranty that is transferable to the new homeowner,” Cochran explains. When you disclose your experience with leaks in the basement, you can include the receipt of work from your waterproofing service, in addition to the warranty. A transferable warranty gives buyers peace of mind. If any issues do arise, they can take it up with a waterproofing company.

Factors to consider in your decision

What you decide to do with your leaky basement will depend on your market, the severity of the leak, and your budget for repairs. There’s no one right or wrong decision (with the exception of lying on your disclosure!), so here are a few questions to guide you:

Is your basement finished or unfinished?

If you went through the hassle of finishing your basement with drywall, trim, electrical wiring, and nice flooring, it’d be a waste to let a water leak go unaddressed. Spending extra for the interior waterproofing can make the area a truly livable space, even in the rainy season. A refinished basement, so long as it’s dry, can recoup 70% of your spend at resale.

How common are leaky basements in the area?

A leaky basement will be more understandable in areas where basements are more popular and where homes tend to be older. For example, 97% of homes built in the West South Central region of the U.S. don’t have basements at all. If you’ve got a leaky basement there, chances are it’ll be a tougher sell without a repair. Contrast that to New England, where 70% of homes have basements, and you’re looking at completely different buyer expectations. Same goes if you’re in an area with never-been-flooded new construction, vs. a row of pre-war homes like Siwiec sees in his Rochester market.

Quick sale or maximum value?

Unlike a quartz countertops or shiplap, a dry basement will never go out of style. It’ll cost you upfront, but drying out your basement helps broaden the appeal of the home. If you’ve got a regularly damp basement and need to waterproof it, you can expect about a 30% ROI, according to Angie’s List. So if the average waterproofing costs $4,500, a seller could expect a $5,850 return on investment. But, if your goal is to get the house on the market fast, the effort and value add of waterproofing might not make sense with your timeline.

What does a top local agent advise?

There are so many ways to approach a leaky basement, and the right agent can help guide you through the decision. They’ll know the basements in your market. They’ll know buyer expectations. And they’ll know whether you need to face the music with a full waterproofing or if a downspout extension will do the trick.

What NOT to do: Paint and keep quiet

If you slap up a few coats of paint on your basement walls just before selling, a buyer may suspect a quick fix and assume you didn’t address the root cause. A fresh coat of paint won’t hide water damage, and if it rains during a showing, the jig is up. Siwiec leaves sellers with this thought: “If there’s a patch-up job in the basement, they’ll think, ‘What else are they hiding?’”

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