Short answer
Ask what happened, when, how often, where the water came from, what was removed, who repaired it, whether insurance was involved and what prevents recurrence. A dry basement during one showing does not answer flood history, drainage, sewer backup, mould, insurability or future repair cost.
The buyer concern behind the question
Fresh finishes make the basement attractive, but the buyer later learns that a major flood occurred and the insurer limits or refuses part of the desired coverage.
A practical Ontario example
Illustration only: The seller reports one sewer backup. The buyer obtains the claim and repair details available, checks the backwater valve and sump setup, has the relevant areas inspected, confirms insurance terms before waiver and budgets for exclusions or upgrades.
Questions to ask before becoming firm
- Was it surface water, groundwater, plumbing or sewer backup?
- How many events occurred and on what dates?
- What materials were removed, dried, tested and replaced?
- Are invoices, permits, claims or specialist reports available?
- Will the buyer’s insurer provide the coverage and limits needed?
Practical routes to compare
- Make insurance availability and specialist review part of the condition strategy.
- Request evidence of the cause and completed remediation.
- Price remaining uncertainty into the offer and emergency reserve.
What each professional can and cannot decide
The Realtor investigates and communicates property facts within the real-estate mandate and advises on offer strategy. The inspector or specialist assesses condition within a defined scope. The lawyer interprets disclosure duties, title, contract language, evidence and remedies. The insurer decides coverage. The appraiser reports value and marketability for the assignment. Rajiv tests qualification, lender property acceptance and closing consequences. RECO regulates Ontario real-estate professionals; it does not set lender underwriting policy. FSRA regulates mortgage-brokering conduct and certain financial sectors; it does not approve the mortgage or create one universal lender policy.
Mortgage and closing consequences
Changed property facts can affect usable rental income, appraisal, insurance, marketability, repair conditions and the amount a lender will advance. Start with a suitable A lender when the borrower and property meet policy. An alternative lender may take a broader view at a higher rate and fee, but still needs acceptable property and evidence. An institutional MIC or private lender may provide a flexible short-term route, including interest-only, amortized, open, partly open or maturity-matched structures in some cases. That route is not an automatic rescue: equity, total cost, legal advice and a credible exit back to suitable A or B financing must be tested.
Verified public guidance
RECO warns that an SPIS depends on seller knowledge and that an inspection cannot find everything. Prior water events can require separate inspection, insurance, municipal and legal inquiries.
Read the primary source. Source checked 2026-09-03. The regulator explains professional obligations and consumer considerations; the lawyer determines legal advice and each lender and insurer applies its own policy.
Pressure-test this answer
The answer may change if the seller did not know the fact, the concern was visible, the buyer received warning signs, the wording was only marketing opinion, records contradict the statement, the defect was concealed, or the agreement allocates the risk differently. A representation can also be important without creating the remedy a buyer expects. Ask what is known, what is assumed, what evidence is missing and which professional is qualified to decide it. Before waiver, compare the cost of investigation with the buyer’s worst reasonable post-closing exposure. After a firm agreement, let the lawyer direct the response.
Evidence and documents to keep
- Listing, photographs, virtual tour and feature sheets
- Offer, schedules, amendments and condition deadlines
- Seller information statements and written questions and answers
- Inspection, specialist, municipal, permit and insurance records
- Rental or service contracts, invoices and warranties
- Emails, texts, appraisal or lender requirements and lawyer correspondence
Related AskRajiv guidance
Continue with mould water foundation home inspection specialist, home insurance before waiving financing condition.
Get the property facts aligned with the mortgage
Use Rajiv’s direct mortgage strategy form. Include the property concern, purchase price, closing date, current conditions and documents already available.
Source and review
Reviewed by Rajiv Verma, Mortgage Broker on 2026-09-03. Educational information only; not legal, real-estate, inspection, engineering, environmental, insurance, appraisal or mortgage approval advice.