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 that you should first call a structural engineer 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 more 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? 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 their 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. In order 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 soil becomes saturated due to heavy rain, sewer breaks, or plumbing leaks, it swells and expands, resulting in erosion or cracks due to the foundation being pushed upward.
• Inadequate drainage that causes erosion – Soggy soil can be the result of 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 just under $5,000. More specifically, the national average ranges from $2,161 to $7,780. 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, there are extreme cases that 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 costs 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 that could lead to structural issues. Cracks that are wider than one-eighth of an inch should be seen by a structural engineer.
• 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 of the shifting, this is usually repaired by installing piers, mudjacking, foam jacking, or reinforcing the walls.
• Bowing foundation walls: $4,000-$12,000, depending on how many and how bad the damage is. Bowing walls are caused by shifting soil, water damage, or sinking. Bowing walls 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: For $1,000-$3,000 per pier, contractors will excavate and install hydraulic piers to raise the foundation.

Sources: HomeAdvisor and Poly-Lift.

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 $528. The typical hourly rate is $100-$230. 
• Obtaining a building permit: The national average for building permits is $1,611, 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-$2,000 to take it down. 

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

Yes, there are plenty of buyers who 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’re able to afford to purchase your home.

A buyer might also be able to get a rehabilitation loan that allows for 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 amounts 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 and on the market — and on a myriad of other factors.

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, so you can command a higher price point.

Conversely, Jerin Harper, from Harper Certified Appraisals in Oregon, believes it is not necessary to fix foundation problems prior to 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 making a decision on whether or not to fix foundation issues, consider the pros and cons:

Pros:

• If you had your house stabilized or “piered,” it can be considered an asset when you’re selling it. 
• Repairing the foundation sets the stage for stand-out curb appeal. 
• A stable foundation can add value and help you sell at a higher price.

Cons:

• Making repairs before you sell could cost thousands of dollars that you might not have had to spend if a buyer didn’t ask for them.
• If the house needs significant foundation repair that you don’t take care of, you’re likely to turn away a large pool of buyers and attract a group of house flippers who want a deep discount on the price. 
• Foundation issues can reduce the sales price by 10% to 15%.

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 that 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 of the downsides is that you’ll likely get a lower offer. Although you’ll attract flippers and investors, you’ll likely reduce your pool of potential buyers.

An experienced real estate agent 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 sell the house quickly for the most money.

2. Sell direct 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’s network of investors will 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 a week. If you choose to accept it, you could close in as few as 10 days.

The bottom line — inspect, disclose, share, negotiate

Foundation problems are intimidating and can be 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 issues with other homes, so if yours is in otherwise good condition, it might not deter them.

Some things a top real estate agent may suggest include:

• Get the foundation inspected. The problem may not be as bad as you imagine; it’s good to know what you’re dealing with.
• Disclose known foundation issues to buyers in writing. In most states, this is required by law.
• Share the inspection report with the buyers. They’ll also want to know what they’re facing if they were to purchase your home, and you just saved them a step in the process. This removes a question in the buyer’s mind and reassures them of your transparency.
• If you have repair estimates, share those with the buyers too. This may also reassure them, or at least they’ll know what level of repair the home needs.
• Negotiate accordingly. Expect to lower the price to allow the buyer to account for the cost of fixing the foundation if you don’t do the work.

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.

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