Is foundation issue as intimidating as I’m assuming?

16 Replies

Hey y’all, just had a inspection done today on a house I’m under contract with. House is a 2005 located in central Texas. One of the reports was foundation. He wasn’t able to pin point the severity but suggested to get a engineer out and inspect the foundation to pin point the issue, if it’s severe. My question is; is it rare for the seller to fix something as big as a foundation issue before closing? That’s what I’d prefer instead of seller dropping sales price and then me having to pay out pocket and also just deal with the hassle. Keep in mind, this house is not a flip or a huge investment property. Was going to buy for myself and settle down. So any experiences y’all have had good or bad I’d like to hear. Or maybe another way around it

@Skyler Harris nothing is a bid deal as long as you have the money to spend on it!  You would need to give us more info on the type of foundation you are dealing with. Is this a slab? Basement? Etc. 

@John Warren yes it’s a concrete slab. And yes this is true money fixes a lot of issues. The reason I don’t wanna pay for it is cause I plan on buying another property within the next year. That would just throw a wrench in that plan. So I’m really curious if it’s unheard of that the seller would fix what’s needed if it’s as severe as that

@Skyler Harris Is the foundation issue noted in the listing? Are you still in the inspection period? If so you may be able to negotiate pricing or a seller concession of some sort. On your first property (or when you're going through an issue for the first time) many problems that are "Boogeymen" like mold, foundational issues etc seem insurmountable but often times when you get through them you find out that they arent as bad as you thought. Just stay true to your investment criteria and make sure that the numbers work when trying to remedy these issues and you should be ok 

@Account Closed   Maybe Mike will pop on ..   foundations are pretty common issues i have found in Texas and other parts of the deep south.

i

ssue is how extensive do you need to cut water sewer lines.. patch cracks in the walls then repaint etc.

some areas are simply worse than others.. and some builders got away with minimum foundation thickness that will be a constant problem..  

you can or should throw it back on the seller to correct.. unless your getting a smoking deal or the market is so hot that they will sell it themselves. I know when i did some flips there.. NOT one person would take a house sub too fixing it they all wanted it fixed and inspected etc.. now these were retail sales to homeowners.. but it appears thats what your doing as well.

@Skyler Harris you can get a free estimate from a reputable foundation repair company, which should include a lifetime warranty. You can ask the seller to repair it, but if it is a minor crack, they probably won't. In that case, I would just keep looking for another house. If it is a major foundation problem, I would just pass unless it is the deal of a lifetime. You will have to disclose the problem when you sell the house in the future, which can scare away buyers.

@Jay Hinrichs there’s no cracks in the wall yet. The inspector is just basing the concern off all the doors on one side of the house closing by themselves and there’s a bit of a slope on the floor. Also a crack that runs through the whole garage floor. Obviously I’m taking his word for it cause he knows more than me.

Suggest you invest inspection with a foundation contractor give you practical aspects of foundation.  Never take a chance on something like structure earth stability.  If the property has slab it is even tougher as you do not have X-rayed eyes.

What you described above is serious. It can not be patched up as it will crack in a more serious way.   My advice is walk away. I am a licensed prof engr. and can approve drawings.

@Skyler Harris

Another professional engineer here in the mix, although admittedly I haven't practiced pure structural (picked up a few projects and clients over the last 2 years).  But, we've done quite a bit of rehabs and tackled some structural projects.  Nothing specifically like what you've described (I'm trying to process what a good course of action might be and will think out loud).  This probably goes without saying but I'm not practicing engineering in communicating here - just helping you brainstorm, perhaps.....

So firstly, I had a candid conversation with another residential structural engineer here and he indicated that most of his work is on the buyer side, and he felt he often provided more value on that side of the transaction.  If you really like the house, you might think about paying the money for that engineer after feeling out the seller's openness to remedy.  The engineers' opinion initially should speak to the severity of the issue.

I'd break down an engineering engagement into 2 parts:

First would be an initial visit and rendering an opinion on the severity and possible approaches in design to remedy.

2nd would be the actual design and cost opinion(s) to remedy.

If you're pretty serious about the house, I think if you pay the $250-500 that I think you'd likely need to do the first, that would be a GREAT investment more than likely from what you're describing.  If nothing else you would have improved your negotiation position substantially.  The 2nd step I'm not sure if you'd want to do before purchasing...  And of course as Sam mentioned you can walk.  Play up the uncertainty and be ready to walk, too.

HOWEVER - what you do have working for you as the seller is that say you do hire an engineer and they render an opinion that the item is serious AND Costly... And that's new information to the seller, you can improve your negotiation position because they are then required to disclose to future buyers is my understanding.

On to the technical and again I'm brainstorming out loud here....

I have ZERO experience with mud jacking as a permanent solution to slab heaving issues - however I would wonder about the feasibility of this as a 'roll the dice' kind of solution (good money vs value trade off) ...if you buy.

One possible solution may be to jack the house and repour which I don't know much about how the bottom plates/wood structural would be tied into the slab - but jacking the house and re pouring sections or all of slab would be an incredibly costly endeavor.  However, (and this is only if it's possible) that may improve your negotiation position to close on the house.

I know you mentioned that you want the seller to handle.  What I would do and recommend is that you use the 2nd scenario to improve your negotiation position, get a massive concession from the seller (hopefully) and then take a more resourceful and nuanced approach with a mudjacking type of solution if it is feasible, etc.  You'll learn something along the way and be happy you did it after.

The other variable here is the financing situation.  Sometimes issues like this can make banks very nervous...  Can you weigh in on how that part is going?

@Sam Shueh

@Skyler Harris . I'm presuming this is your first purchase - If So, Opt Out Of Contract and move on - there is always another property that will come on the market. 

if the property is located in the Austin Metro area, I'm aware of several Foundation Companies that do FREE Inspections - that will give you an honest assessment of the situation. Obviously their motivation is getting the business, if you decide to proceed. 

Suggest you update your profile with at least a general idea of your location.

@Skyler Harris

Foundation issues can range from the standard movement over time to   The property is a tear down. I would:

-Request an extension to the option period and get a couple of foundation company opinions 

- If I were purchasing for cash ask for a drop in price. If financing, I would probably want it fixed as the appraiser might catch the issue as well

-Minor issues can often "cure" themselves over time if drainage issues are corrected and the slab is watered on a regular basis

@Skyler Harris

I've seen a lot of good points about how best to evaluate the issue, but I haven't seen anyone mention the fact that if you are trying to finance the home using conventional financing you might not be able to. Many lenders will not finance the purchase of a home with foundation issues. The seller might then have no choice but to fix the foundation or sell the property to someone, like most of the investors on this site, who can purchase with cash or non-conventional financing. If you can get a discount for the cost to repair the foundation, and it's a great deal you could finance the property using an FHA 203k and have the foundation repaired after closing.

Unless you already have a working relationship with a foundation repair company, a lot of foundation repair companies will only provide free estimates to homeowner. Instead of paying for this estimate, you can always ask your real estate agent to ask that the homeowner get a quote to repair the foundation. They'll most likely have to deal with this same issue whether you move forward with the sale or not.

Like many have said on the forums, I would absolutely get an engineer's report on the foundation, but keep an eye on your contract dates and don't let your inspection window pass!

Foundations can be fixed and the range on fixing is pretty large. 

If you are getting a loan, most times conventional banks will not lend on something that needs foundation repair. 

Good luck!

As @Jay Hinrichs mentioned foundation issues are extremely common in Texas.  There has been lots of good advice so far in this thread.  I would absolutely get a couple of experts to look at the foundation and provide some education.  You can get this done for free as has been mentioned.

I have few basic ways to look at it.

As a self funded buy and hold rental investor, houses with known foundation problems can be great deals.  Find a cheap guy to put in the piers in and figure it into rent.  Normally buyers talk sellers into going down on the price by having a high price company give a bid on the foundation repair.  Then they use the cheap guy to fix it.  Tenants rarely panic over the minor issues.

As a flipper, foundations can be a real problem.  Unless you are VERY experienced at flipping, I will just suggest you avoid any property that has a foundation problem.

As an owner occupant,  I would avoid any house that had ANY foundation problems before it was at least five years old.  They tend to be nightmares.  It is normally a sign that something was not done right to start with.  It will also worry the engineers.

Depending on what the crack in the garage looks like, many experts might say do not do anything to this foundation unless there is some damage that has not been mentioned in this thread.

Hey there everyone! I’m not sure how deeply any of you have gotten into the inner workings of the 203K loan, but in the spirit of sharing knowledge I started a discussion on the subject here: The 203K Loan - Open Discussion. Lots of great stories from people who succeeded and had nightmares with this type of financing. Many pros, but also many cons if you are not prepared.