Selling A House With Foundation Issues: Full Guide From Real Estate Experts

by | Feb 6, 2024

Foundations issues may seem like a nightmare scenario for homeowners. A shaky foundation presents safety challenges, which can lower the value of your home and make it harder to sell. 

If you plan on selling a house with foundation issues, you may have a lot of questions:

    1. What’s the first thing I should do to verify the foundational issues?
    2. Can I continue to live here?
    3. Will the problems get worse if I ignore them?
    4. Should I try and sell without the repairs? Is it legal?
    5. If I do sell without repairs, how much should I discount?
    6. How much do I have to disclose?

You probably have a million questions. Luckily, we have a million and one answers. Foundation issues are not insurmountable when it comes to selling.

How Do I Know If I Have Foundation Issues?

Are you unsure if you have foundational issues or their severity? First, you should get a professional opinion from a structural engineer. They will provide an inspection with a report detailing structural damage, foundation issues, and the recommended repairs. Many older homes show “false signs” like brick cracking, hairline cracks in concrete floors, and sticking doors. 

The report will help you better decide whether to repair your house or sell it as-is. If you sell it as-is, disclose the issues with the report attached and discount your property as needed. If you sell your home after repairing, having your home stabilized is considered an asset.

Exterior Signs Of Foundation Problems:

    • Exterior Window Gaps: Gaps between the exterior walls and window are usually caused by foundation settlement. This is when the foundation moves further into the soil from when it was built.
    • Leaning Chimney: Look for space between the exterior and your chimney or leaning.
    • Draining Issues: A moving foundation can slowly remove or mishap your home’s pipes. This may affect your outdoor plumbing, like the sprinkler system and the indoor plumbing.

Interior Signs Of Foundation Problems:

    • Cracked Drywall: A shifting foundation can pull your home vertically and horizontally, causing cracks. Cracks wider than 1/8th of an inch are causes for concern.
    • Nails Popping Out: If you notice your nails popping out of the wall, this could be a sign.
    • Warped Floors & Ceiling: Beam issues can cause the floor to warp or sag, showing the structure is compressing or settling. 
    • Mildew: Cracks in your foundation can allow moisture into your home. This moisture can cause wooden beams to rot, which releases a pungent smell.
    • Termites: Moisture in wooden beams will lead to termites which can get into the rest of your home.

Should I Fix My Foundation Before Selling?

A home with foundation issues will struggle to find buyers. You’ll run into the same issue repeatedly where you get interested buyers who back out after finding out about the foundation issues.

And don’t think that you can get away with not disclosing the foundation issues. In most states, foundation issues are material information. This means withholding that is illegal, which can lead to you getting sued. Potential buyers won’t like finding foundation issues in inspection when you could have just told them. They’ll wonder what else you’re hiding from them.

You Have Two Options: Repair Or Sell As-Is

Some lenders won’t approve a mortgage loan if the house has a damaged foundation. This is one reason of many a buyer may feel dissuaded from making an offer. Let’s look at your two options when dealing with a foundation issue.

Option #1: Repair

Your first concern will be the cost of repairing the foundation. Will I see a reasonable return if I spend $20,000 to repair the foundation? You must also consider how long it will take to repair the foundation. 

Getting a 1:1 return on repairing the foundation may help you sleep better at night, but you’re losing money and time. Money paying a mortgage that you don’t want and time finding a new home. 

That’s a potential con, but there’s another way to look at it.

Buyers get peace of mind knowing that a home they’re in the market for is move-in ready. Even if a home is move-in ready with the foundation issues, they may hesitate, knowing that these issues may crop up later. Some buyers will walk away from foundation issues during the inspection. The unknown is scary.

Average Costs

    • Structural Engineer: Expect to pay around $500 for a structural engineer.
    • Building Permit: Foundation repairs require a permit signed by a state-registered engineer.
    • Foundation Repair: Repairing a foundation can cost anywhere from $1,000 to $20,000. The repair method, the size of the house, and the type of structural support will determine the range. 

I know I know, that sounds expensive. If you can’t afford to pay for that, you have a few options to secure funding:

    • HELOC: A home equity line of credit, or HELOC, is a revolving type of secured loan in which the lender agrees to lend a maximum amount within an agreed period, where the collateral is the borrower’s property.
    • Zero Interest Credit Cards: Some credit cards have a 0% interest sign-on option before a certain period. Take this option if you’re 100% certain you can pay it off before interest kicks in.

Never consider doing a D.I.Y foundation repair. This isn’t painting a bedroom, you’re dealing with the foundation of an entire structure. Also, never go with the cheapest contractor because they WILL cut corners and cost you more in the future.

Option #2: Sell As-Is

If you don’t want to repair the foundation, you must sell your home as-is. Because of this, your home’s value will decrease, so you must lower your prices.

This is for two reasons:

    1. Your home is worth less with foundation issues (duh!)
    2. There’s less demand for homes with foundation issues, giving buyers leverage.

We have a great article about selling a house as-is

How much should you discount your property?

You’ll save time and money by letting the buyer handle the issue. If the structural engineer and contractor say it’ll cost $25,000 to fix the issue, a buyer will want $50,000 to protect their downside.

Think of it from their perspective. Why would they want to buy a home with known issues when they could find a similar home in the area with no issues?

A steep discount may be the only way to bring them to the closing table.

Option #2B: Sell To A Real Estate Investor

If you’re selling your home as-is, your best option may be to sell to a real estate investor. So, how much will a real estate investor pay for your house?

Investors will pay up to 70% of the ARV (After Repair Value) for a home. Investors, as their name suggests, have one goal. Making a profit.

Investors typically buy homes ‘as-is,’ eliminating the need for costly preparations and the discomfort of frequent showings, offering a more streamlined, stress-free selling experience.

Firstly, investors look for properties they can purchase at a lower cost, renovate, and then sell for a profit, a process known as “flipping.” Homes with foundation issues are at the top of the list for investors.

Get One-on-One Guidance

Contact us below or call (978) 228-1068 to speak with us about selling your home fast.

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Elie Deglaoui - Author


Elie Deglaoui

Elie is our office admin who handles all our day-to-day tasks and makes sure we always stay on track. He brings his love of music and sports into the office everyday to always liven up the environment. His outgoing personality makes it easy and fun for him to talk to homeowners, homebuyers, and everyone in between.

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