Should You Buy a House with Foundational Issues?

By

|10 min read

Your mortgage lender might need extra forms before approving your loan, or you could receive unexpected news in your home inspection. One of the scariest issues is the discovery of foundation issues on a property. This could mean that the house is shifting, sinking into the country, or structurally unsafe to live in. 

Should you buy a house with foundation issues? There’s no easy answer to this question. That depends on your home-buying goals, your budget, and the issues at hand. However, you can use this guide to learn how to approach foundation issues and potentially turn a major home flaw into an opportunity to get a good deal.  

Is it safe to live in a house with foundational issues?

Safety is the top concern when it comes to living in a house with foundation issues. Most inspectors and builders believe it is unsafe to live in a house that needs foundation repairs. Even if the problems are small right now, they can grow in severity and cause serious issues over time.

For example, if your cabinets are starting to pull away from the wall, they can quickly become a serious safety hazard that could fall on anyone in your home. Waiting for repairs only increases the risk.  

There may be times when you can live in a house that has foundation damage for a short time as long as the damage is minor and if you have a foundation repair contractor scheduled to address the damage. You do not want to put off this project.  

Safety concerns aside, foundation problems can create annoying living environments with doors that don’t close all the way and uneven floors that are hard to walk on. Even if your house isn’t at risk of collapsing, you will still want to address the root of these problems by fixing your foundation and making any other repairs to the interior of your home. 

Can you get a mortgage on a house with foundation issues?

If you need to get financing for your home purchase, the process can be slowed or stopped if you discover foundation problems. The severity of this issue depends on the type of loan you are trying to get. 

If you are trying to get a loan through the Federal Housing Administration (FHA), Department of Veterans Affairs (VA), or the U.S. Department of Agriculture (USDA) then you will have a much harder time securing a mortgage on a home that needs foundation repairs.

These organizations want to make sure they are approving loans for quality homes that can help lower and middle-income Americans buy homes. Foundation damage can get expensive, which increases the chances that buyers will fall into debt when trying to address it. If the house isn’t structurally sound, the owner risks not being able to sell it for a profit, causing the lender to lose money. 

However, if you are working with a private lender to secure a mortgage, you might have more flexibility. Your bank might be concerned about the major repairs needed but will move forward if you can prove that you have the means to address them. Your lender might also want you to work with the seller to address the foundation problems before the closing appointment. 

If your home inspector discovered foundation problems, expect delays on your loan. However, know that it’s still possible to secure a mortgage and close on the property if all parties work toward a solution.

Signs of Foundation Problems and How to Spot Then

Start thinking about foundation issues before you start the house-hunting process. You can easily remodel a dated bathroom or replace old appliances once you move in, but essential foundational repairs cannot be overlooked. Here are a few warning signs of foundation issues to look out for. 

  • The doors won’t close properly. If a foundation is off, a door will either get stuck in place or won’t close. French doors also won’t meet together in the middle. 
  • There are large cracks in the walls. While hairline cracks are common and part of the settling process, you should look for large cracks that zigzag and continue to widen. 
  • Cracks in the floors. An uneven foundation puts pressure on the tile and wood floors. Cracking or warping could be warning signs. 
  • Bouncing floors. Look for slanting or sagging floors that are difficult to walk on. 
  • Cabinets pulling away from walls. This shows that the walls are bowing away from the house or the cabinets are sliding on uneven floors.

Fortunately, many of these symptoms are easy to spot and can be seen by potential buyers touring the property. While a seller might be able to hide a crack with a large piece of furniture, it’s difficult to disguise bouncy floors. 

Additionally, look for a musty smell in the home – particularly in the basement. This could indicate water or mold issues or it could be a sign that there is significant foundation damage. 

What to do if a home inspection reveals foundation issues?

If your home inspector discovers foundation problems in a home you still want to buy, you don’t have to walk away from the sale. This could be an opportunity to get a better deal on the home or you could work with the seller to secure foundation repairs before you move in. Here are the right steps to follow. 

  • Contact your real estate agent. Not only can they advise you on the right steps moving forward, but they can start to investigate whether the seller and listing agent knew about the problems before you put in an offer. 
  • Request a foundation inspection. While a home inspector can identify issues, you might need a more advanced source to evaluate the scope of the damage. Request a foundation inspection from a structural engineer to highlight any safety concerns and costs to repair the damage.  
  • Negotiate with the seller. Either present a new offer for the home based on your knowledge or ask the homeowner to make the foundation repairs before you move in. 
  • Decide whether you want to move forward. You might be able to end the deal and look for another house if the damage is too extensive or the seller is unwilling to negotiate. 
  • Look into a rehabilitation loan. If you discover foundational issues in your dream home, consider securing financing to improve it. A rehabilitation loan will be built into your mortgage and provide funds for you to cover the foundation repair cost. 

Most importantly, do not panic after learning about your foundation issues. Wait for the foundation inspection and carefully consider your options. This will help you create a strategic plan to move forward and buy the home with a repaired foundation. 

Costs to Make Foundation Repairs

Foundation issues are diverse, which means foundation repair costs also vary significantly. The price you pay to address the problems will depend on the size of the house, the severity of the issues, and the market rates in your area.

After your foundation inspection, get estimates from at least three different companies to understand the cost of repairing the foundation. This will help you negotiate fairly with the seller.

You can expect to budget around $5,400 for foundation repair on average. On the low end, some customers spend less than $2,000 on repairs to fix minor cracks and sagging. On the high end, repair work can cost more than $8,600 in 2023. 

If your foundation issue is severe and extensive, this could become a major project. Some people have to spend more than $50,000 to make a house safe to live in again.

This is why it is so important to get clear estimates of what your foundation repairs cost. You need to know exactly what it will cost to complete the work, along with secondary costs like temporary housing until your home is safe to live in again. 

Pros of Buying a House with Foundation Issues

While learning that your ideal home has foundation issues is never a good thing, there are steps you can take to address this problem and turn a negative into a positive. Here are a few benefits of working with a seller even though you know a property needs foundation repair. 

  • You can buy the home for a lower sale price. Everything is a negotiation in real estate, so you might be able to make a lower offer on the home to account for the time and money needed to cover foundation repairs. 
  • There will be less competition for the home. Other buyers might walk away from the property because they can’t afford to fix the foundation issues. This means you might get a bigger house or a home in a better area without having to outbid competitors. 
  • You can immediately increase your home’s value. If you buy a house below market value because of a foundation problem, you can address the issue and increase your property value. This is ideal if you don’t plan to stay in the house for a long time. 
  • You can feel confident that your home is safe. It is better to work with a structural engineer and complete your foundation repair successfully than to be unaware of any problems. Addressing foundation problems can give you peace of mind. 

There’s always a chance that the seller won’t want to negotiate with you. However, it’s in their best interest to do so. If they don’t negotiate and you walk away from the deal, the owner will have the same problem with the next potential buyer who also discovers the foundation issues.

Cons of Buying a House with Foundation Issues

Despite the potential benefits of buying a house that needs foundation repair, this is still considered a risky move by many real estate professionals. Here are a few drawbacks to consider. 

  • You may have to foot the foundation repair costs. Some owners would rather sell their homes at a discount instead of making repairs. While this means you buy the house at a good price, you will then need to work with a structural engineer to make the repairs.
  • Your house is unsafe until the issues are addressed. You should not move into a house with a bad foundation. Instead, you will need to find temporary housing while the repair work is done.    
  • Future buyers might be concerned about the property. Some people get worried when they see a house that has previous foundation repairs. They are worried that there was poor construction which could lead to future problems. It might take you longer to sell your home as a result. 

If you are concerned about potential resale problems, make sure you document all foundation repair projects you do and get an additional inspection proving that the house is safe. This can help you assure buyers that you took the appropriate steps to stabilize the house and it is in good condition.

Hire a Realtor for a House That Needs Foundation Repair Work

Foundation issues don’t need to be a dealbreaker in the buying process. While you can walk away and look at other houses in your area, you can also fight to get the dream house that you love. Before you start attending showings, hire a real estate agent who you can trust.

The right Realtor will point out potential issues along with the assets in a home. They can help you negotiate with the seller to get your foundation problems addressed. With a trusted partner by your side, you can feel confident buying a home. 

To find an agent, turn to the professionals at FastExpert. You can learn about the experience levels of different Realtors in your area and find one who meets your needs. You can even reach out to our agents and ask how they approach foundation repairs when they come up in home inspections. This can give you a path forward if you are interested in a house but are worried about structural problems.  

Try FastExpert today and take the first steps to becoming a homeowner.

Amanda Dodge

Amanda Dodge is a real estate writer and expert. She has worked in the field for more than eight years. She spends her time writing and researching trends in real estate, finance, and business. She graduated with a bachelor's degree in Communications from Florida State University.

You may also be interested in...

how to buy another house while owning a house

How to Buy Another House While Owning a House

Buying another house when you already own a home is a common practice. Some people purchase investment proper… read more

Chicago Neighborhoods: North Side Home Buying

Leigh Marcus, one of Chicago's leading real estate agents and FastExpert partner, provides unique insight int… read more

How to buy a house with cash

How to Buy a House with Cash

Click here to browse our Real Estate Agent Directory and contact top-rated agents in your area! More t… read more

how to find off market real estate deals

How to Find Off-Market Real Estate Deals

Both buyers and real estate investors can benefit from searching for off-market properties. These are houses … read more