Is it Safe to Live in a House with Foundation Problems? Read This Before Moving In

Posted on Mar 01, 2021


Getting the home inspection report back and realizing the home you’ve fallen in love with has foundation issues can be a gutting experience. However, homes with foundational issues do exist - about 25% of all homes will experience some structural distress, with 5% experiencing major structural distress in their lifetime. 

In other words, it’s not necessarily the deal-ender some people treat it as. Foundational issues are, in fact, fixable.

Whether the foundational issues are apparent from the disclosure statement, or a surprise when it comes time for the inspection, you may be wondering what it’s going to take to fix it - and whether it’s livable in the meantime.

Here’s what you need to know. 

A home’s foundation is important

Most homeowners sense that a home’s foundation is important: but exactly how important is it? The answer is “very.” Your foundation doesn’t just support your home structure, though that’s a big part of it: it also keeps out damaging groundwater, resists the impact of the earth around it, and helps keep your home insulated. 

Basically: if you value the home that rests on the foundation, then prioritize having a good, strong foundation.

“A home foundation can be likened to a spine. It keeps everything standing up straight,” explains repair expert Bill Taylor of My Backyard Dream. “If your spine is not in good shape, you are clearly uncomfortable. The longer you wait to get it fixed, the worse the pain and suffering you can experience. If a home foundation crumbles at any time, you're going to have a complete mess on your hands.”

Is it safe to live in a house with foundation problems?

Many people assume a foundation issue means danger. While an issue with the foundation can pose a risk, it’s not necessarily going to cause the floors to cave in anytime soon. You can live in a home with foundation issues; many people do so (sometimes without realizing it). Most issues take years to develop into a serious enough problem to pose a safety risk.

A shifting foundation, though, can lead to:

  • Cracked walls
  • Jammed doors and windows
  • Uneven floors
  • Mold and water damage

“Foundation issues cause secondary problems. For example, if your foundation isn’t solid, your house could settle, and you’ll have to deal with situations like cracked walls, uneven floors, doors that won’t close, and many other issues. If you fix your foundation problems before they cause secondary issues, you’ll save yourself money on repairs,” notes Melanie Musson, a home insurance expert with US Insurance Agents.

The longer you leave a home’s foundation in disrepair, the more likely it is you’ll have to deal with additional damage to the rest of your home - either costing you additional money, or lowering the value of your home when it comes time to sell. “It's a lot easier to address a foundation issue in its early stages,” warns Taylor. 

Just how bad is your foundation problem?

If you discover that your home has structural damage, it’s a good idea to hire a structural engineer to come and evaluate the problem. 

Otherwise, you may underestimate the damage and run into issues covering the costs of repair. According to HomeAdvisor, hiring a residential structural engineer costs $500 on average (or about $100 to $200 per hour). 

It’s frequently the case that a small foundation crack you can see, can spell more trouble where you can’t see - so better to identify the scope of the issue before it magnifies further.

“One of the biggest problems with people who buy a home with unresolved foundation issues is that they severely underestimate the cost to fix them. The total cost they have in mind usually tends to be at least 1.5 or even two times less than what it actually is,” warns Andrew Wilson of Contractor Advisorly. “People often rely on their own judgment for cost estimates instead of relying on professionals.”

Wilson goes on to explain that when it comes to determining the cost, you don’t want to skimp on hiring an expert - and it could even help with your negotiations.

“My advice is to bring a professional that knows about fixing home foundations. The consultation cost for professional advice is far less than the costs of buying a home in an awful state. You might also be able to negotiate the price down if they point out an issue that wasn't previously mentioned beforehand that might be related to the foundation.”

How much does foundation repair cost?

At the topmost of many homeowners’, or potential homeowners’ minds is: how much is this going to cost me? According to Home Advisor, the average foundation repair cost is $4,449.

However, this comes with a wide range. Major repairs (like stabilizing foundation walls) can cost well over $10,000, while more minor repairs (such as a crack repair) may only cost $500.

Keep in mind, too, that the cost of repair is partially dependent on the cost of local labor, which varies city by city and state by state.

cracked-wall.jpg?mtime=20210301093651#asset:37723

A crack can be a sign of deeper problems.


Process to repair

So how much time will you need to budget for the repair process? Not surprisingly, the answer really depends on the extent of the damage. To give you a rough estimate of how long some of these processes take:

  • Crack repairs: Several hours
  • Bowing walls: several days
  • Piers: up to a week

Factors influencing the timeline:

  • Size of the home (an 800 sq. foot home foundation is a quicker fix than a 3,000 sq. foot home)
  • Materials used (drilled piers, for example, use pouring concrete which requires drying time)
  • The extent of the problem (if your foundation needs to be stabilized, then the more piers required - the longer it takes)
  • Time of year (if the ground is frozen, projects can be delayed)

Is foundation repair necessary - or can I leave it alone? 

What happens if you don’t fix issues, and go to sell the home? Be aware that lenders may not be willing to give a loan to potential buyers if there’s foundation issues. You’d be limiting yourself to cash-only buyers, which can significantly shrink your pool. On top of this, buyers are justifiably wary of buying a house with foundation issues, and many of them will not bother to bid on your home - even if you're willing to discount the price accordingly.

If you find you need to fix the problem in order to sell, you may end up scrambling to get you foundation fixed last minute. In all likelihood you'll need to opt for the first contractor who can complete your job in your limited timeframe, rather than the most affordable contractor - which can significantly increase your project cost.

Can you get a mortgage if your home has foundation issues?

If you’re trying to buy a home with foundation issues, one thing you should be aware of is potential issues with mortgage approval. Making it trickier, there’s no “one size fits all” answer for this issue, since it will depend on the appraiser, the lender, and the severity of the damage.

“Much of it is up to the appraiser, so is therefore somewhat subjective,” explains Houwzer mortgage advisor Andrew Leonardis. 

Appraisers grade conventional properties from C1 to C6 (C= condition):

  • A C1 would represent a home with no real issues at all, which usually means a brand new home or an EXTENSIVE remodel.
  • C4 represents "Adequately maintained homes.”
  • A C6 home would not be eligible for sale to FNMA (Fannie Mae) without serious remediation. FNMA seller's guide has this to say about C6 properties: “Substantial repairs are needed to the improvements [Home] due to the lack of adequate maintenance or property damage. It reflects a property with conditions severe enough to affect the safety, soundness, or structural integrity of the improvements [home]." 

“This is not to say that all properties C5 or higher qualify for financing,” advises Leonardis. “If an appraiser identifies an issue that represents a serious and immediate safety issue, that must be corrected before the loan is eligible for delivery. It is possible to close a loan prior to correcting these issues, in some circumstances, for example, an Escrow Holdback to repair a damaged roof. In this case, the lender holds the loan 'on their books' until they receive proof that repair is addressed.”

Ultimately, he emphasizes that the degree to which the damage impairs the safety of the home is key to understanding loan eligibility:

"It can be tough to give a blanket rule, but unless something is blatantly unsafe in a way that it affects the livability and/or structural integrity of the home, you would not have to address it on a conventional loan.”

In other words: it definitely pays to hire a structural engineer to receive a professional opinion. Otherwise, you may end up losing the money spent on the appraisal, inspection, etc. if the loan is later denied/the seller refuses to remediate the issues first.

Have more questions about home foundation issues and remediation?

Our Realtors are experienced in discussing how foundation problems will affect your home's worth, and how you should approach your home sale or home purchase. Contact one day for more information.

For Sale

Get the Knowledge You Need to Win


Subscribe to our newsletter to get essential real estate insights.

Interests
Regions

Recent Articles

 Closing Costs in PA: What Home Buyers Need to Know

Closing Costs in PA: What Home Buyers Need to Know

Posted on Jun 14, 2021

It’s easy to get caught up in the home buying/home selling process and forget closing costs, but closing costs are the last thing you should forget when you’re trying to budget smartly. Closing costs not only impact how much cash you can put toward a down payment, but also how much cash you can offer over the appraisal price in this crazy market, if need be.

The Problems You'll Need to Note in a VA Seller's Disclosure

The Problems You'll Need to Note in a VA Seller's Disclosure

Posted on Jun 10, 2021

It’s time to sell your home in Virginia, and you realize you need to do something known as “disclosure.” So what is it? Disclosure laws dictate what a home seller must tell a home buyer about the defects/current state of their property when they go to sell.