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Top 3 Things to Consider before Selling a Home with Foundation Issues

Mark Madria • Nov 27, 2018

By far, the foundation is one of the most important parts of your home. It quite literally allows your house to stand. As such, it must be strong and stable enough to support everything above it.

When the foundation of your home is damaged, the entire home will have structural failure. Everything from the foundation itself to the walls to the roof will fail. At worst, your home could be rendered uninhabitable.

Selling a home with foundation problems isn’t easy. In fact, the words “foundation problems” are enough to make home buyers run screaming.

So, this begs the question – can you sell a house with foundation issues? The short answer is, yes you can. But, is it going to be easy? Of course, not!

In this post, Jim Oursler from Granite Foundation Repair , a professional foundation repair company in Dallas, shares with you 3 things to consider before selling a home with foundation issues.

1. Foundation Problems

Signs of foundation issues are usually easy to spot. In Dallas, TX, common signs of foundation problems include:

· Cabinets and counters separating from the wall.

Initially, the gap may be tiny. But before long, what appeared as tiny 1/16-inch may have grown to become a huge 1/2-inch. At this point, you have got major issues.

· Sagging or uneven floors.

Like cabinets and counters, floors that initially appeared to be slightly out of level may become uneven by as much as 2-inches. Aside from being unsightly, floors that are sagging or uneven are extremely dangerous.

· Gaps around window frames or exterior doors.

If you have double doors, you may notice that they no longer align properly. In addition, doorframes may become crooked and impair all types of doors from operating properly.

· Doors and windows sticking and failing to function properly.

Sticky windows and doors are also another common sign of foundation problems. Exterior doors will usually hang down at the top or drag at the threshold.

· Cracks on the foundation, wall, and floors.

This is often the number one sign that your home’s foundation is damaged. A broken chimney, wall fissures and floor cracks can also mean trouble.

Spotting these signs of foundation damage early is key. This is because foundation problems get worse over time. So call a foundation repair professional as soon as you spot a problem.

2. Severity

Once you’ve confirmed that your house has foundation problems, the next step is to find out the severity of the problem. The foundation inspection report will usually contain this information.

Foundation cracks are often the best indicators. The following are common types:

· Less than ¼-inch: These are fairly common and occur due to natural foundation settling. They are usually not worth obsessing over.

· Hairline cracks: These are common in many buildings, especially in plaster, which is prone to shrink and is very sensitive to movement. Like quarter-inch cracks, you shouldn’t obsess over them yet.

· L-shape location: Similar to hairline cracks, these types of cracks develop when your foundation shrinks – most likely if it’s situated in an L-shaped section.

· Masonry joint cracks: Stair step masonry joint cracks are a more serious concern. They often point to a serious foundation problem.

· Horizontal cracks: Horizontal cracks are generally caused by soil pressure and are normally worse than vertical cracks.

· Vertical cracks: Vertical cracks are usually the direct result of foundation settling, and these are the more common of foundation issues. If you see these, you don’t have much to worry about.

3. Homeowners Insurance

The third thing to consider before selling your foundation-damaged home is your homeowner’s insurance. Like any other part of your home, your foundation is covered by homeowner’s insurance.

However, unlike other parts of your home, many causes of foundation issues are explicitly excluded from standard policies. The following are perils covered by a typical homeowner’s insurance cover:

· Water damage from A/C overflow, heating, plumbing

· Collapse weight of sleet, ice, or snow

· Volcanic eruption

· Falling objects

· Vandalism

· Damage caused by vehicles

· Riots or civil disturbances

· Explosions

· Damage caused by aircraft

· Windstorm

· Lightning or fire

If your foundation was damaged by any of these events, filing a claim for reimbursement from your insurance firm will most likely be successful.

However, most insurers will not cover risk events such as:

· Faulty construction

· Pressure from tree roots

· Earthquakes or flood

·The expansion, bulging, shrinking, cracking, or natural settling of your foundation

If your homeowner’s insurance won’t cover the foundation repairs, you’ll have the following options to consider.

Option #1: Fix the issues and then sell the home.

According to HomeAdvisor, the typical homeowner pays between $1,843 and $6,372 to repair a damaged foundation. For major repairs involving hydraulic piers, expect to pay anything north of $10,000.

Option #2: Try selling the house as-is.

Rather than taking on the burden of repairs, you might choose on selling your house as-is. Some buyers, especially home flippers, could see it as an investment opportunity. They could fix the foundation issues and then flip the house for a profit.

These are the 3 important things to consider before selling a home with foundation issues. Clearly, foundation problems are by no means the end of one’s hope to sell a home.

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2024 Market Predictions for Residential Real Estate

By Brenda Patton • 07 Sep, 2023

How Could a Recession Impact Home Prices? What are the factors or indicators that I watch as predictors? The first is Jobs. For people to buy a home they must have Cash or an Income. Most of us will finance our home so we must have a job to repay the mortgage each month. When jobs are cut, people cannot afford their mortgages, so they sell. However, they need to sell immediately and so will tend to sell lower. Additionally, they may not have funds to do much in the way of updates so again the house will sell lower. Loss of jobs (or higher unemployment) can cause a Recession and possibly reduce home prices. The jobs market in DFW Metro is very strong with low unemployment. The 2nd factor I watch for the housing market is the Interest Rate for mortgages. Rising interest rates translates to lower purchasing power for the Buyers. When purchasing power is less than the Market price, Buyers cannot purchase so houses will sit on the market longer. In this most recent period of high interest rates, Buyers were initially reluctant to purchase when rates started rising. However, lenders have changed the narrative to help buyers understand that buying at today’s prices with higher rates is fine if the buyer can qualify. Mortgages can be refinanced if rates come down. And, the 3rd factor is owners’ equity position in their homes. If there’s a large equity position in a home, Sellers are less prone to sell. During the Pandemic when interest rates were in the 2’s and 3’s many homeowners refinanced their homes to the lower interest rate and thus reduced their monthly payment. A large number of homeowners have over 50% equity in their homes now. In her article on Rising home prices, Monique Beals states, “Since 2000, median home prices in the U.S. have increased by nearly 160 percent.” This surprisingly high increase in home prices covers the Great Recession of 2008-2009 where home prices dropped as much as 25% in some areas. Since 2000, other than the Great Recession era, there have been a very few moderate declines in home prices which did not last. Recession Predictions 2023 – 2024 “A prophecy fulfilled is a failure.” (unknown) In mid-2021 a few bank CEOs were raising the flag that inflation was hitting the economy very hard and we would be in a recession soon if interest rates didn’t increase. By Spring 2022 all bank CEOs were raising the volume on inflationary chatter. It was true. The price of groceries had gone up 20% - 30%, gas prices were higher and house prices were higher and continually increasing. The Fed started rate increases in June 2022. In midsummer 2022 most economists were saying we’d have a recession by mid-2023 and the Fed continued rate hikes for 10 consecutive sessions, resulting in mortgage rates going from 3% to 6% in the shortest timeframe in history. By February 2023 it appeared that the inflationary period was abating and a recession may not be imminent. Many prices have stabilized instead of continually escalating, including house prices. There are only a few economists still predicting a recession for 4Q2023. Next year, 2024, may see a recession but economists are now thinking the U.S. will have a rolling recession either late 2023 or early 2024. Housing Predictions 2023 – 2024 "It is difficult to make predictions, especially about the future." Yogi Berra With this great philosophical statement in mind, and years of experience in the rearview mirror, let’s look at Housing Predictions for 2023 - 2024. Housing predictions for 2023 was for prices to be flat or fall ~ 5%. The opposite has been true in DFW Metroplex. There are fewer houses to sell and we still see multiple offers on some. Prices have still increased from 2022 levels, at least 5% in my market area. For 2024, assuming no major impact to the economy, housing in DFW Metro will increase 3% - 5%. No one, without a doubt, no one predicted the escalation of home prices that started in May / June 2020. In fact, most were predicting a dour environment during the Pandemic which prompted the Fed to lower interest rates. Lower rates meant small investors could afford to buy single family homes. Money was cheap in that time. People who wanted to move could buy bigger homes. Those who already owned a home could sell for much higher and move to something better. However, as the rates remained low, demand increased in DFW Metro as WFH became more common and people could work from anywhere. As demand increased so did competition for housing, it became fierce, and prices kept going higher. Additionally, supply chains were disrupted during the Pandemic with entire plants being shut down. It was difficult to obtain materials or labor for construction and price increases were happening monthly to builders. It became impossible for builders to provide entry level homes and be profitable. A few builders have tried to maintain entry level pricing for homeowners and have done so by building smaller homes on smaller lots and denying investors; selling only to owner-occupants. With fewer entry level homes being built, the demand for existing homes increases putting pressure on prices once again. For 2024 I’m of the opinion that the DFW marketplace will see a minimum of 3% appreciation if interest rates remain in the high 6’s and low 7’s. If they decrease, as I’m starting to see some economists predict, then we’ll have a much higher volume of properties moving and far more buyers back in the market. That will drive appreciation to 5% or higher in 2024.

Brenda Patton and the Patton Williams Team supports The Colony Chamber of Commerce

By Brenda Patton • 07 Jul, 2023

Brenda Patton and the Patton Williams Team supports The Colony Chamber of Commerce as a Bronze member and sponsors the quarterly Women in Business luncheon. These luncheons are hosted the last Friday of each quarter. Reach out to Brenda at 469-408-3148 for more information, or Amanda Porter with The Colony Chamber at 214-886-4942.