When it comes to selling your home with foundation issues, we strongly recommend coming forward with the problem to potential buyers and adjusting the price accordingly. For many buyers the foundation is the base of home stability. If you don’t disclose the issue, no matter how small it is, chances are the buyers will walk away from the deal.
Furthermore, not disclosing these isuses may result in a lawsuit. As Xpera Group real estate development experts note: “If you are sued for not disclosing any foundation issues you may be forced to pay the entire cost of foundation repair as well as any punitive damages.”
Do Foundation Problems Affect Appraisal?
When an appraiser reviews your home they are looking for both damages or “deferred maintenance” that may negatively influence your property value, as well with improvements and updates that will positively impact it. The relationship between foundation damage and appraised value depends on a number of factors.
When it comes to foundation issues, the first question we must answer is whether or not the foundation truly has a “problem” that needs repair. With Houston weather being what it is and many of the soils having a high clay content, foundation “shifting” is very common. Visible cracks in a slab and even small cracks throughout the exterior walls is generally considered normal. It’s up to your appraiser to determine if the cracks are signs of bigger issues.
“If an appraiser notices signs of more significant damage then they will most likely note this in their report and recommend a professional foundation inspection be ordered. “, stated Mark Aiken a real estate appraiser in Houston. Such signs would include unlevel flooring, doors or windows that will not fully open/close, gaps in the baseboards or door molding, or significantly cracked drywall. Extensive foundation issues could also lead to damage of roofing or second story subflooring.
So What If There Are Problems With The Foundation?
If an appraiser determines that the integrity of the foundation needs professional review, they will note this in their report and likely wait until such review has been completed before completing their opinion of value. Alternatively, they may complete the report but leave it “subject to” the foundation being found in good repair. Since appraisers are not engineers or foundation repair professionals, they typically will not provide a quote for repairs until they’ve been provided exact costs from a 3rd party.
If your appraisal is for a mortgage or loan then you can almost guarantee that the lender will require repair work to be completed prior to the sale. This is even more true if dealing with an FHA or VA loan. If the appraisal is for private use then the appraiser may be more willing to “ballpark” repair costs which will be listed as “costs to cure” in the appraisal report.
Because of the many types of foundation problems, and the wide range is costs to cure, it’s impossible to know exactly how much a foundation issue will impact a home’s value. Generally speaking, moderate foundation repairs will typically reduce a home’s selling price by just the cost to cure. If the damage is more extensive and interior drilling/jacking is required, expect the impact to exceed the costs by 10-15 percent. If you need an expert evaluation of the severity of your problem, reach out to one of our technicians for a free assessment.
Buying a Houston Home or Getting an Appraisal…and Need a Foundation Inspection?
Give us a call, today: 713-714-0015