Buying a house with known foundation issues

[jewozzy]

Another option is to have language written up where a quote is agreeded upon by both parties and a foundation company before the sale. Then pay full (or whatever agreed upon price) and have the sellers cut a check to the buyer or the third party for x amount. That was an option when I was looking to buy a house where the seller didnt have the funds up front and I didn't have enough cash after purchase to fix a certain problem.

[Country cracker]

Even new houses in my neighborhood have foundation issues not really a big surprise with it being D RHorton.

[Captain Crawfish]

Next

[Strychnine]

With slab houses, it's not a question if the has had foundation repair, it's a question of when will it need repairs. A receipt of fresh foundation repair, along with the engineer's, and the certificate of transferable warranty are frankly.... a selling point.

But buyers need to be aware they have only 30 days to do the transfer.

This guy knows.

We just sold a house that had foundation repair ~5 years ago (with lifetime transferable warranty). Had the company that did the work come back and do an inspection and evertything was fine, and even they said the same thing - "What house in north TX does not eventually need work?"

Even with our pre-existing work done we had 4 offers in 7 days.

[Shaggin Wagon]

I thought you couldnt get a mortgage loan on a house with a bad foundation.

[94form2000z]

The foundation is the one thing that sucks about owning a freaking home around here. You want it fixed Correctly the first time. The issue with a lot of low bid foundation companies is they do not fix it right. They lift around the outside of the house and call it good but do nothing inside and leave you with a fish bowl affect. Of course this is mainly an issue with older foundations but I know because I unfortunately went the lower bid route with a company on a rental house.

Years later I had to pay a company and a plumber to fix it right. Just beware of what you are buying and who did the repairs of the home. Get an engineer report from a reputable company. If the seller goes with a cheapest option company to fix it I would not trust it.

[Sean88gt]

Can she get a loan if the foundation is currently in need of repair? I'd require the sellers to fix before continuing with purchase.

[2011GT]

Can she get a loan if the foundation is currently in need of repair? I'd require the sellers to fix before continuing with purchase.

Maybe not an FHA loan. I really don't know though.

[Cooter]

require the seller to fix or watch that $6700 quote escalate to $10k+ when they get on site

[DON SVO]

I thought you couldnt get a mortgage loan on a house with a bad foundation.

That is correct. We had that issue on the first house we put an offer on. The bank (seller) refused to move on it unless we paid for the foundation work and it was performed prior to contracts. Effectively, they wanted us to foot the bill for $9,000 in foundation work without any guarantees if there were other issues (structural, plumbing, etc) from the foundation being corrected. Needless to say, we told them to GTFO.

[slow84lx]

When I buy a house needing this kind of work buy at a significant discount. Exact amount of an estimate off the price is retail price. There has to be incentive and that just enough to spark interest for me.

[32vfromhell]

That is correct. We had that issue on the first house we put an offer on. The bank (seller) refused to move on it unless we paid for the foundation work and it was performed prior to contracts. Effectively, they wanted us to foot the bill for $9,000 in foundation work without any guarantees if there were other issues (structural, plumbing, etc) from the foundation being corrected. Needless to say, we told them to GTFO.

Bingo. The same goes for Roofs. They will not agree to underwrite a house with a roof that needs repair.

It can be a negotiating point, because you can point out to the seller that only cash buyers can buy a house at that point, because if one underwriter wont cover it due to issues, very likely that all other underwriters wont either.

[barronj]

With slab houses, it's not a question if the has had foundation repair, it's a question of when will it need repairs. A receipt of fresh foundation repair, along with the engineer's, and the certificate of transferable warranty are frankly.... a selling point.

But buyers need to be aware they have only 30 days to do the transfer.

You also need to mind your soil conditions, know what will void the warranty (improper drainage, dry soil conditions (sun soak), inadequate irrigation)

Make them fix it first. When they raise the part of the foundation that is sinking you risk breaking any pipes that are in the slab and most foundation places will not cover pipe breakage. I know someone who ended up with broken pipes in three places and had to pay an additional $4500 in repairs.

Probably don't have the dough to do it.

I know that it is damn near impossible to get financing for a house that fails an inspection for the foundation needing to be repaired.

I thought you couldnt get a mortgage loan on a house with a bad foundation.

Can she get a loan if the foundation is currently in need of repair? I'd require the sellers to fix before continuing with purchase.

Whenever you have major issues on a house (hail damaged roof, no flooring inside, structural issues), the lender will close/fund but force the seller/buyer to leave money in escrow with the title company and they will have 60/90 days to fix it. It incentivizes all parties to get the repair done. There might be a degree to which they won't fund though, I've not come up with that, most of the scenarios I've presented were fundable.

I would also have your niece do a hydrostatic test. The $250 test could turn up more damage (critical in homes built w/ spun/cast iron pipes or any foundation issue). $250 could determine that you need a major plumbing job. If I knew of or saw structural issues when I walked the home before putting it under contract, I would schedule a plumber to be there the same day as the inspector (or sooner). If you find a major plumbing issue and the seller's agent is acting like they won't discount the price to fix it, there's no sense in spending another $400 on an inspector who'll turn up more issues, unless you're buying the house no matter what, the worse you want it the worse you'll get it type behavior.

When the foundation is done, they will have a plumber sign off that it passes the hydrostatic test as part of the certification/warranty.

Depending on how bad the foundation is sagging, it could put stress on the joists/attic/roof. And, just because they fix the foundation, doesn't mean they're also coming inside to mud, texture and paint the blemishes where sheetrock separated. That's additional work at additional cost that you have to subcontract and manage the hassle of.

If this is her first house, hopefully she has a savvy realtor. All major systems need a thorough inspection. Any one of them can break the bank when they fail, and faults in them make great negotiating points.

[yellowstang]

Thanks for all the info everyone. She's not looking at this one any longer.

[cobrajet69]

Thanks for all the info everyone. She's not looking at this one any longer.

Mary & I were eyeballing a house down the stree from her mom. Decent older neighborhood. Had foundation issues. Owner was asking 90k cash. Home may be worth $130k when done. We passed but thought hard beforehand.


David