Selling or buying a home with foundation damage is a big deal. If you are a buyer, nearly
everyone you talk to will tell you not to buy a home with foundation issues. And if you are seller,
you will be wondering if there is any chance of being able to sell your home.

What you don’t hear often is that foundation problems are more common than you imagine. 25%
of homes in the US have one form of foundation problem or another. But only 5% of US homes
have major foundation problems.

As a buyer, you have a 25% chance of encountering a home with foundation issues. And if you
are selling, there is a one in four chance that your house will have foundation problems. But the
good news is that you can solve most foundation problems.

So if you are a buyer who has found a home you like but have discovered that it has foundation
problems, you should not immediately walk away. At times buying a home with foundation
issues can be a good decision. But there are steps to follow or you may regret that decision.

Also, as a buyer trying to sell a home with foundation problems, there are things you should
know. This post provides a guideline for both buyers and sellers who are contemplating buying
or selling a home with identifiable foundation issues.

What buyers should know about buying a home with foundation damage:

1. Diagnose the problem and its extent.
   Firstly, although the signs of foundation damage are fairly easy to spot, your superficial
   assessment is not enough to establish that the foundation is failing. To determine the extent of
   foundation damage, you need a licensed structural engineer. The engineer’s report will form part
   of the documentation you present to your lender and insurer. It will also tell you if the problem is
   something you can solve.

2. Find out how much repairs will cost.
   If the structural engineer’s report shows that you can fix the problem, then you should proceed to
   have a foundation repair company cost the repairs. The cost of repairing a damaged foundation
   depends on the foundation type, the cause of the damage, and the amount of damage. Repairing
   small cracks may not cost more than $2,000. But fixing major foundation issues can cost
   $20,000-$100,000.
   
3. Do not ask the seller to fix the problem.
   Asking the seller to repair the foundation may not be in your best interest because the owner may cut corners. The buyer will be eager to transfer the home and its problems to you at the least cost to themselves. If you do not feel confident about your ability to oversee the repairs, walk away.
   
4. Expect challenges with financing.
   Most lenders will not lend you money for a home if it is structurally unsound. But this doesn’t
   mean you won’t be able to get financing; you have to use less conventional sources. Although
   these may be more expensive, the fact that you are buying the home well below market prices
   can help offset the cost of borrowing.
   
5. Make an offer, but…
   Before you make your offer, you should talk to your insurer to know the risks. It would be best if
   you also got the foundation repair company’s word that the problem has a permanent solution.
   Afterwards, cost the repair and add another 20% (minimum) to that amount. Deduct this sum
   from what you think is a fair price for the home and make your offer. Include contingencies in
   the offer to give yourself an escape route if things go wrong.
   
6. Think of the future.

Solving the actual foundation problem is not the end of the issue. If you intend to sell the home
shortly afterwards, expect problems. Even if the house shows no signs of foundation damage, the

mere presence of it in the maintenance records can scare buyers away. It is best to live in the
home or rent it out for some years before trying to sell it.

What sellers should know about buying a home with foundation damage:

1. Disclose the problem but prepare to sell lower
   Disclosing the presence of a foundation problem will keep you from wasting your time with
   buyers who will not buy. But you have to be prepared to sell your home at a much lower price
   than similar homes. That is the only reason someone would choose your property over one
   without foundation damage.
   
2. Should you or shouldn’t you fix the problem?
   Fixing the problem may be right if you do not plan to disclose it in your sales ads. But
   prospective buyers who discover the issue in the home’s records may still walk away.
   Additionally, buyers may worry if you were able to solve the problem entirely.
   
3. Be flexible with buyers
   Buyers know that it is best not to buy a home with foundation damage in a hurry. For this reason,
   they need lots of reassurances from experts, and this will make the sales process lengthier than
   usual. You have to show patience and understanding, or if buyers feel stampeded into making a
   decision, they will walk away.