Selling a House with Foundation Issues? Here’s How

What to do if you suspect foundation issues

If you find signs of foundation issues, here’s what you should do:

1. Get a professional opinion from a structural engineer

Jared Davis, a top real estate agent who works with 80% more single-family homes than the average agent in Richmond, Virginia, advises calling a structural engineer first to take a closer look. “A structural engineer will look at the lot, drainage, soil, moisture, and other things. Calling a foundation repair company [first] is not the best option.”

A professional inspection can help distinguish genuine foundation concerns from “false signs” such as nail pops, seam breaks, hairline cracks in concrete, cracks in floor grout or tiles, and normal brick expansion joints. These issues are typically due to wear and tear, a home’s age, or poor craftsmanship and do not necessarily indicate foundation issues. Davis estimates that “about 90% of cracks and settling are not structural.”

Bruce Barker, president of the American Society of Home Inspectors Inc., concurs: “Cracks are the most obvious sign of foundation issues, but they can be difficult to interpret.” He says additional investigation is necessary. Where are the cracks? What size are they? How wide and how long are they? What is the foundation material? Is the slab structural? Is there evidence of water movement?

2. Decide whether to fix or sell a house with foundation issues as is

As the seller, you must decide whether to fix foundation issues or sell as-is. Keep in mind that the foundation problem you see is usually the result of another issue, such as soil shifting or moisture, and you may need to address those issues to make any foundation fixes successful.

3. Hire a professional to repair any issues you decide to fix

Once you’ve had a professional inspection, if you need to repair any foundation issues, call a qualified foundation repair contractor.

The Foundation Repair Network, a foundation repair educational resource center for property owners, cautions that foundation work is not a do-it-yourself project. The site recommends getting quotes from at least three licensed contractors whose foundation repair methods have been evaluated by International Code Council Evaluation Services (ICC-ES), a nonprofit organization that reviews building products, materials, and systems for code compliance.

“Don’t make your final decision based on advertising and cheap prices,” the network warns on its website. “If it sounds too good to be true, it probably is.”

Common causes of foundation issues

Most foundation issues are caused by soil and water, although some may result from poor construction. To fix a foundation problem for good, you may need to address its cause. The most common causes are:

• Dry, shrinking soil: As soil dries and shrinks in hot weather or due to thirsty nearby tree roots sucking the moisture out of it, it can cause the foundation to shift.
• Soggy, swelling soil: If the soil becomes saturated due to heavy rain, sewer breaks, or plumbing leaks, it swells and expands, resulting in erosion or cracks as the foundation is pushed upward.
• Inadequate drainage that causes erosion: Soggy soil can result from inadequate drainage, which can lead to soil erosion. That, in turn, destabilizes the foundation, causing buckling of walls and uneven settling. The source can be clogged gutters and downspouts, low areas near the foundation, or land sloping toward the house, all of which can create pooling.
• Poor construction: If the soil wasn’t properly prepared and compacted, or if your home is built on more than one type of soil, it can cause differential settlement.

How much does home foundation repair cost?

Whatever the cause of foundation issues, you can expect to pay an average repair bill of under $5,100. More specifically, the national average ranges from $2,200 to $7,948. Of course, that depends on the type of problem that needs fixing and factors like where you live and the type of material your foundation is made of.

Of course, as with any home damage, extreme cases require much higher repair costs. For this post, we’ve gathered estimates for the more common foundation issues a homeowner might face. A breakdown of the expenses for specific repairs could look like this:

• Repair of minor cracks: $250-$800. Cracks should be addressed by injecting epoxy or polyurethane foam to prevent moisture ingress, which could lead to structural issues. A structural engineer should see cracks wider than one-eighth of an inch.
• House settling or sinking: $600-$3,000. If your home has settled significantly, contractors can raise it back up and shore it up with foundation piers for $1,000 to $3,000 per unit or by slabjacking or mudjacking — a process that involves pumping a concrete mix under the foundation to raise it up. This typically costs between $600 and $1,600.
• House shifting: $700-$25,000. Depending on the severity, this problem is usually repaired by installing piers, mudjacking, foam jacking, or reinforcing the walls.
• Bowing foundation walls: $4,000-$12,000, depending on the number and severity of the damage. Bowing walls are caused by shifting soil, water damage, or sinking. They can be fixed by applying carbon fiber strips with epoxy or reinforcing the walls with anchor plates and steel rods. For severe bowing, piers may need to be installed.
• Underpinning the basement: $1,000-$3,000 per pier. Contractors will excavate and install hydraulic piers to raise the foundation.

Additional costs could include:

• Obtaining a soil report: Soil testing generally costs between $700 and $1,800, but a pH level test with information about pesticide residue, heavy metals, and industrial chemicals can run $1,200. A more detailed report for all contaminants and shifting soil factors can run as high as $5,000.
• Hiring a structural engineer: The cost for a residential structural engineer averages $552. The typical hourly rate is $100-$230. 
• Obtaining a building permit: The national average for building permits is $1,658, but costs vary regionally and depend on the type of permit you need.
• Dealing with hidden obstacles: If tree roots cause your home’s foundation to heave, the tree may have to go. Depending on its size and accessibility, it can cost anywhere from $200 to $2,000 to take it down.

Are there buyers who will consider a house with foundation issues?

Yes, plenty of buyers will still consider purchasing a home with foundation problems, though you will likely end up selling at a lower price to account for the problem.

House flippers are always looking for a bargain. Since they intend to renovate the home anyway, they may not be concerned about your foundation issues as long as the price is right.

Some buyers may use foundation issues as a bargaining tool to get a lower price, which may be the only way they can afford to purchase your home.

A buyer might also be able to get a rehabilitation loan that allows the repair to be done after the sale. The lender will finance the house for the anticipated appraisal amount after the work has been completed, and the difference in the amount is used to perform the repair.

A top agent will have experience selling homes with foundation problems and can guide you accordingly.

Should you make repairs before selling a house with foundation issues?

The short answer is … maybe. It depends on the severity of the issue, market conditions, and impact on property value, among other things.

Edmond (Buddy) Eslava, an appraiser with the Appraisal Consultant Group in the Mobile, Alabama area, says it’s “significantly wiser” to have them fixed before you sell to command a higher price point.

Conversely, Jerin Harper, from Harper Certified Appraisals in Oregon, believes it is unnecessary to fix foundation problems before listing unless it comes at a reasonable cost. If a seller is considering fixing foundation issues, she says, “It is wise for a seller to educate themselves on any foundation issues and to get at least three bids from licensed contractors.”

Pros and cons of fixing foundation issues before selling

When deciding on whether or not to fix foundation issues, consider the pros and cons:

Selling a house with foundation issues: disclosure requirements

In most states, if you are selling a house with foundation issues and you’re aware of them, you’re legally bound to disclose them. If you don’t fix foundation issues, Davis says, they are “100% a disclosure issue” and can be a reason for a price adjustment.

Even if you aren’t aware of any problems, when the buyer orders a home inspection, the inspector will look for indications of foundation issues. Inspectors have to “tell what they saw,” Barker adds. “That’s why the homeowner should care.” Inspectors are required to report their findings, although he says they do not draw conclusions as to causes. “We just point out defects; the homeowner can call in an engineer or contractor.”

The buyer will get a report from a structural engineer if the home inspection turns up anything. At that point, the buyer can buy it, walk away from the deal, or negotiate a lower price.

What can I expect if I decide to sell my home as is?

If you think the challenges of fixing the foundation outweigh the benefits, selling a house with foundation issues is not inconceivable. Two viable options are:

1. Selling as-is

This means you won’t do any repairs and make no guarantees that anything is in working condition. A seller can even specify certain items “as is” rather than the entire house. Be advised that you will still be held accountable for complying with state and federal disclosure regulations.

One downside to this approach is you’ll likely get a lower offer. Although you’ll attract flippers and investors, you’ll likely reduce your pool of potential buyers.

A seasoned real estate professional can help you decide if this is the route you should go. Getting an experienced agent who can set expectations and priorities and keep the deal together is key, Davis believes.

If you decide to sell as-is or directly to a cash investor, the right agent can walk you through the process and help you sell the house quickly for the most money.

2. Sell directly to a cash investor

Selling to an investor requires little to no prep work, and you’ll avoid the complications and delays often associated with financed purchases. 

Investors can include flippers looking for properties to renovate and resell, buy-and-hold investors who want to rent out properties, and iBuyers.

With HomeLight’s Simple Sale platform, you don’t need to worry about repairs — or open houses or agent commissions. HomeLight has one of the biggest networks of investors who buy houses in almost any condition. Simply answer a few questions about your home, how much work it needs, and your selling timeline, and get a cash offer in as little as 24 hours. If you choose to accept it, you could close in as few as 10 days.

What else should home sellers know about foundation issues?

Lots of questions arise when a home has foundation issues. Here are some of the more common ones:

• Does insurance cover foundation repair? It depends on what your policy covers, but flooding, earthquake damage, and settling are usually not covered by insurance.
• How long does foundation repair take? Foundation repair typically takes 2 to 3 days, but the exact time frame depends on the severity and location of the damage, as well as the size of your home. In general, Davis says foundation repairs can be done quickly. “I’ve never had a delay in closing [due to foundation repair].”
• What is the most common mistake sellers make related to foundation damage? One big mistake is trying to cover it up instead of fixing it, according to Davis. He has seen sellers use caulk, paint, and temporary piers to hide or inexpensively fix foundation issues. Beware: this could leave you legally liable.

The bottom line — inspect, disclose, share, negotiate

Foundation problems are intimidating and costly, but they aren’t necessarily deal killers. Keep in mind that if you live in an established neighborhood with older homes, you’re probably not the only one dealing with foundation issues, Davis points out. Buyers looking in your area will likely encounter similar problems with other homes, so if yours is in otherwise good condition, it might not deter them.

If you’re selling a house with foundation issues, a top agent can give you firm footing each step of the way. HomeLight can help you find the most effective, experienced agents in your area today.

Header Image Source: (Erik Mclean / Unsplash)