"Red flags" for home buyers.

• Position: Signs of major defects

If you're in the market to buy a home, keep in mind that more than 40% of previously owned houses on the market will have at least one serious defect. That's a sobering fact for home buyers ready to make the most expensive investment of their lives, but one which shouldn't stand in the way of an intelligent consumer.

"Virtually every |used' home needs some repair or improvement," points out Kenneth Austin, chairman of HouseMaster, a national home inspection franchise company with headquarters in Bound Brook, N.J. "That's to be expected. But as a consumer, you want to make sure that you are aware of any major problems in a house you are considering purchasing, and what it will take to remedy the situation. If you decide to go ahead with the purchase, you'll know what has to be done and how much it will cost. And your real estate contract should provide for the repair or replacement of serious deficiencies by way of an |inspection contingency clause.'"

The 12 most serious "red flags" to be on the lookout for in resale homes are a cracked heat exchanger; failing air-conditioning compressor; environmental hazards such as radon, water contamination, asbestos, lead paint, and/or underground storage tank; wet basement; defective roofing and/or flashings; insect infestation such as termites or carpenter ants; mixed plumbing; aluminum wiring; horizontal foundation cracks; major house settlement...