When you’re selling a house on a foundation issue, sitting in that facility can feel like you’re dragging a rock uphill. Buyers get scared. The lender will be stingy. And they find that sellers are often navigating unbudget chaos.
That said, whether it’s a condo in Los Angeles or a Charleston home, it’s not impossible to sell your home with foundation issues. With the right approach, honest disclosure, and some wise strategies, you can still sell your home – perhaps not the dream price, but without losing your heart in the process.
Understand the full scope of the problem
Start by clarifying what you’re dealing with. Are you seeing a full-scale structural crisis with small hairline cracks or sinking corners and bowing walls?
Hire a licensed structural engineer. I’m not a general contractor. Not a well-reputed handyman. You need someone to provide a complete diagnosis. I expect to pay hundreds of dollars, but this report is your baseline. Without it, you just guess and want. This is a bad combo when tens of thousands of dollars are at stake.
Are you modifying it or selling it as is?
Is this a big decision for all sellers with a face of basic damage to resolve the issue or sell the house in its current state?
Option A: I’ll fix it
If the damage is limited and the repair costs are between $10,000 and $20,000, then if you are in the seller’s market, it may be worth it. Buyers can be at ease, and the home is eligible for traditional funding and can be listed at full market value.
Option B: Selling AS-IS
If the correction costs are astronomical, or if you don’t have time, energy, or money, it may make more sense to sell your home in its current state. It hits the price. But by avoiding months of construction, loan payments and stress, you can offset some of that loss.
There is no answer for all sizes. Sometimes fixing it will make you more net in the long run. Also, the time and effort involved in fixing the problem may be worthless in the end.
I will disclose everything
There are no shortcuts here. All known issues must be disclosed in writing. And when it comes to basic issues, exclusion of something is not unethical, it is also a great way to end up in court.
Include reports, invoices and warranty if you have done any repairs. If you are selling it as is, please be clear on your listing and on your purchase agreement. Let the buyers know in advance what they are walking. Some will leave. That’s good. No need for all buyers. You need the right thing.
Appropriate price
Buyers are not going to pay the best dollars for a home with basic problems. But that doesn’t mean you need to take the first lowball offer you come.
Work with a Redfin real estate agent who has experience selling problematic homes. They will know how to make a price strategically – low enough to reflect the damage, but high enough to maintain negotiations on your terms. The best way to sell such a property is to show “a great opportunity for investors” or “pricing to reflect the repairs needed.”
Identify the target buyer
You probably won’t be using an FHA loan to sell to first-time home buyers. They avoid risks too, and their lenders won’t touch a home with structural problems unless they are fixed first. Instead, focus on three groups.
Cash buyer. Investors, flippers, and people who don’t need funding.
Contractor or merchant. People who know how to fix things themselves and see value at discounts.
Buyers using renovation loans. These are rare and complicated, but they can work. For example, a 203(k) loan encloses repair costs in a mortgage.
Adjust your marketing accordingly. Don’t waste time on people who don’t have or can’t.
Red flag of valuation and lender
If you become a buyer who needs a loan, there’s a little more to do. Lenders need assessments and foundation issues often tank them. The appraiser may flag the issue as “structural damage.” This is a death kiss for fundraising unless you have already done the repair or the buyer agrees to fix it after closing. Most banks don’t allow it.
This is why cash buyers can be easier. There is no rating. There is no lender. There are few hoops.
Prepare for longer timelines and tougher negotiations
Selling a home with basic problems is not a quick process. Expect a long day in the market. Be prepared so that the deal falls and the buyer is scared. Their inspectors find something new. Their uncle, “under construction,” at first glance, tells them to run.
This is normal. Patience. Please organize your documents. It will become transparent. And don’t let a failed transaction make you desperate for the next one.
You can sell your house with basic problems
At the end of the day, selling a house with a fundamental problem is two things: integrity and tenacity. The damage is real. You can’t spin it. But you can sell it. You pretend that’s not the problem and start showing the buyers why it’s still worth their time.
