A common piece of advice proffered to homebuyers is that foundation issues should be a deal breaker when it comes to deciding whether to submit an offer on a home. After all, it can cost up to $10,000 to repair a broken foundation and even more to fix the damage it caused in the home. However, not all problems are the same. Here's what you should consider when deciding whether to buy a home with foundation troubles.
The Type of Damage
Foundation problems fall in two categories:
- Structural damage – This is damage to the foundation and the home (e.g. cracks and buckling). Typically the most expensive to fix.
- Settling and heaving – This is when the ground shifts underneath the home causing the foundation (and the home as a consequences) to sink lower or surge upwards over time.
Some foundation problems can be resolved quickly and cheaply. For instance, a house that has settled may only need to have the doors and windows in the home repaired to fix gaps and unevenness that may have developed as a result. Others may require a major overhaul that can cost thousands of dollars, as is usually the case when the foundation has major cracks in it. Most repairs will land somewhere in the middle.
The most important thing you need to find out is whether making the repair will resolve the issue or if the problem will continue. For example, if the foundation was damaged due to shifting soil, you need to determine if the ground has stabilized. If the professional indicates the soil will continue moving and cause more issues in the future, you may want to walk away from the purchase.
The Potential for Increased Value
Another thing to consider is whether fixing the foundation will lead to an increase in the home's value. A finished basement can significantly increase the resale value of the home, depending on what you do with it, for example. If fixing the foundation will let you remodel this area, making the investment will potentially let you recoup your costs when it comes time to sell.
Additionally, you can typically request and receive a discount on the home from the seller for foundation issues, which may help you break even—or come close to it—when all is said and done. For instance, if it'll cost $10,000 to fix the foundation, but the seller takes $8,000 off the price, it may be worth proceeding with the purchase, especially considering the money you'll save from not paying interest on that $8,000.
For more advice on whether to buy a home with foundation issues, contact a real estate agent.