Foundation Problems at Purchase

8 Replies

Hi all, 

Like many here I have been silently reading and listening while trying to learn as much as I can. 

I am currently in the option period of my second deal. However, with so many of the homes in the Dallas Texas area it needs foundation work. This particular unit is a townhouse that shares a common wall with the unit next to it. Does anyone have experience with working with the neighbors when completing foundation work? I'm not sure if I can ask for them to help pay for some of the cost since it is a shared wall, but I would like to at least get them to sign something stating that I am not responsible for damages caused in their unit.

Also, I am trying to go the traditional 20% down route, but am a little worried with the fact that financing might fall through because of all the work that has to be completed prior to closing. Has anyone had a similar experience that they could share to help me see how that process may all play out? I'm not originally from Dallas, and the idea that foundation problems happen all the time is still new to me.

Thank you in advance to all for your thoughts


I would highly highly highly recommend that you or make sure the contractor you hire to perform foundations repairs (especially since it is a shared wall that will be repaired and/or modified) is designed with the details that will be used and make sure that it is stamped by a professional engineer. This will help protect you in the event something does go wrong and it does negatively impact the neighbors house and cause any amount of damage. I don't fully know the extent of the work you are planning to perform or what repairs are needed. Just my 2 cents.

If it was a SFH with no other structures being affected. My thoughts may differ.

@Zack Bracha Is the seller willing to complete the repairs before closing? If not, that might preclude you from getting the financing you are looking at, depending on the details. If you can get the seller to do it, just make sure that you require an engineer's stamp before you close.

If you can't get that loan with the foundation issue unresolved before closing, you may consider buying it with hard money, then refinancing into a long term loan, if the deal is good enough.

Maybe repost with “shared wall & foundation in dallas Texas” in the title as some people get alerts...more readers more respondents. I would think sharing foundations and roofs would require some sort of condo type least something to spell out how to proceed.
I got close to an 8k concession from a bank in 2010...6k for foundation and 2k for broken pipes etc that can happen when the foundation is fixed. I still haven’t fixed the foundation because the tree causing the damage is still alive and I am not selling so no compelling reason yet....solid limestone under the fill dirt. But if you don’t fix, could your neighbor sue you for causing damage due to neglect to their foundation or even just their drywall? If you are sinking, they will eventually be pulled your way I would think. And if you do fix, moving the structure could cause drywall cracks and broken pipes next door as well as in your place....the levelers I got a bid from required you to sign off that you might get cracks and that you needed to get a plumber to test your pipes.
Not trying to scare you off. A lot of people in Texas just live with slightly off foundations and repair drywall cracks when they repaint. If you were in a condo, the hoa would probably fix the issue and maybe assess the affected units a special fee to recover the cost.

@Jason Hirko We were able to find a foundation company that was willing to perform the work and have the seller pay at closing through escrow. I believe that the appraiser will require that engineer's report, which is good. I understand the concept of hard money, any suggestions on where I would find someone offering that type of loan? Would a traditional bank offer that? Also, any insight on the refinance process afterwards? Don't they typically require a waiting period before you can refinance?

@Marian Smith thank you for the insight. Do you remember the type of form that they had you sign? I'm curious if there is a standard form that I can have my neighbor sign to waive my liability for damages caused to their unit. Also, I know that I can't legally perform any foundation work on a shared wall until that neighbor has agreed to the work. Not sure if there is way that this is usually handled.

i never signed it because I didnt do the work, but it was a part if the bid,  the foundation company would likely require the neighbors  signed  consent because they would also be named in a lawsuit.   But if they dont I would get them to sign something...or get another foundation bid from someone who protects themselves and is upfront about possible consequences....your neighbor will also benefit from a foundation repair to some extent vs the condo staying on the current course I would think. .  And make sure your foundation company carries insurance:

@Zack Bracha your bank won't offer hard money, but a good HML shouldn't be hard to find on BP. You can refinance it the next day if you want to with a bank, but if it is a Fannie loan, they will only do a rate/term refi. If you wait for 6 months, you can do a cash-out refi

@Zack Bracha if the repair work will be completed before closing you don't need to use hard money.  If you still need to close quickly it might be the only option but plenty of conventional lenders out there will close this type of a transaction.  I'm just thinking outloud here but I wonder what the Home Owner's Association rules state in their bylaws that address this type of function. Usually they have clauses that address common areas (walls, roofs, etc).  Now, if the repair work is done before closing, it's not really an issue you have to even worry about.  The owner of the home is liable for anything against that occurs while they own it.  Might be good just to get a copy of the bylaws before hand.  If you need some local hard money lenders just private message me and I can shoot you some suggestions.  Good luck!

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