Check for downspouts on the uphill side of the house, or drainage from the yard that collects against the house. Funneling water away from the house via a French drain may be necessary to correct the problem.

Since you are planning on redoing the basement/family room you should read up on waterproofing products. Spend a little more on prevention, or watch your improvements be for naught. Inspectors are not all good at the job, and old houses often have damage that can't be seen. I don't know what sort of crack is in your floor, but it may be necessary to hire a professional to fix it. Unless you stand to lose significant earnest money by backing out, you should bring up these issues now. Read up on the fiduciary responsibilities of realtors for both the seller and the buyer.

http://www.thefoundationexpert.com/cause...

http://www.bestmaterials.com/waterproofi...

http://www.buzzle.com/articles/drainage-...

http://www.ehow.com/info_7832399_role-re...

What did your home inspector say? If you didn't get a home inspection, you might be screwed. ALWAYS have a good home inspector check out any potential property.

Hi,

I'm buying a split foyer built in 76. It is on a hill and has decent water drainage. There are hairline step cracks in the block in the garage. My concern tho is the basement/family room. It has wood panneling (which will be removed) and green shag carpet (again, removing).. The panneling appears to have water damage towards the bottom. I also feel a crack on the slab floor. (Through the carpet). The crack "seems" to be about 1/2" wide!. I am closing on this house in a week. Am I screwed?... Only half the house is maybe 4' below grade... Thanks