As a homeowner, the most difficult type of home damage you will ever have to deal with is damage to your home’s foundations.
A damaged foundation will touch every aspect of your home. And owners often feel that once a home has been identified as having foundation issues, it has been “marked for life.” That’s because the problem never really goes away, since it becomes part of the home’s history and will somehow always influences its market value going forward.
But as bad as foundation problems can be, there is a situation that feels even worse than owning a home with foundation issues.
It is trying to sell a home with foundation problems. Finding a buyer for your home when it has foundation problems is one of the hardest things you will ever do.
The work of selling your home, normally difficult, will become twice as hard when it has foundation problems. No matter how small the issue, buyers will run scared upon hearing of the problem.
As the owner of such a property, you will be forced to think out of the box.
The peculiar circumstances of your home mean you can’t employ the same exact strategies people use when selling homes that are structurally sound.
And usually, when considering the options available to you, two questions pop up. Should you try to sell the home “as is” and wait until you find a buyer willing to take on the challenge of fixing the home? Or should you repair the damage before you list the home?
What are the pros and cons of each alternative?
Fixing the foundation
Most foundation problems can be fixed. And the solutions can be permanent, as long as you follow the proper process for fixing such problems.
That would mean having a structural engineer to inspect the foundation and a reputable foundation repair company to fix the problem.
The remediation company should be able to provide a guarantee of their work.
Pros
- Access to mortgage
The main reason to repair the foundation is to make it easier for prospective buyers to be able to access a mortgage to buy the home. Most mortgage companies will not approve a loan if they determine that the home a buyer wants to purchase is structurally unsound.
- Stress-free for the buyer
Very few buyers want to go through the stress of doing major repairs soon after buying a home. Fixing the foundation makes it possible for the buyer to move into the home straight away after buying it. Moreover, buyers may not have the additional cash to spend on repairs.
Cons
- Cost
Foundation repair can be expensive. Depending on the extent of the damage, costs can run from $5,000 to $10,000 or even $100,000. In addition to the monetary cost, there is the cost in time. And sometimes this cost cannot be recouped when you sell the home.
- Repairs will appear in records
Once you do foundation remediation on a home, it will show up in the public records for that home. Buyers will often discover this and walk away without bothering to find out the quality of the repair.
- Doubts about job quality
Buyers who show interest in the home in spite of the public records may express doubts about the quality of the remediation. They may be afraid that the problem will reoccur in later years.
Sell As-is
Although it is hard to sell a home with foundation issues, it is not impossible. What are the challenges of and advantages of taking this route?
Pros
- Save yourself the cost
The first advantage of selling as-is is that you save yourself the cost and trouble of dealing with the problem. You avoid the need to raise additional funds to fix the home and keep costs down as a result.
- Avoid disclosure
Since you didn’t do any repairs to the home’s foundations, there will no records of the problem in the public records. You can avoid dealing with buyer’s aversion to homes with foundation problems.
- A chance to sell to investors
You may be able to sell the home to someone who will pay cash for it. This will usually be a property investor who wants to use the home as a rental or a “house flipper.”
Cons
- A lower asking price
Since you didn’t fix the damage but are transferring the burden to the buyer, you will have to list your home for a much lower sales price. This is the only way to attract buyers.
- You may appear as deceptive
Even if there is no record of the problem in the public records, buyers will eventually discover the foundation problem when they do their home inspection. Once the problem comes to light, some buyers will think you were trying to deceive them.
- Risk of mortgage cancelation
Even if a buyer wants to go ahead with the purchase after the problem has been become known, their lender may cancel the loan. This will terminate the sale and bring you full circle to where you started.