Selling House with Cracked Foundation - PeachParts Mercedes-Benz Forum

MBlovr · #1 09-29-2007, 07:04 PM

Ok I have owned a house for about 14 years, unnoticed by me at the time I bought it, it had cracks in the foundation. During the time I lived there it wasn't a big deal to me but over time I have gotten moisture into the basement and all the mildew odor's etc that went along with that. Now that I want to sell I want to do it right but I want to maximize my net out of the situation. As I see it my options are:
a) Offer it for sale as is Discounting the cost of repair form the fair market value. I like this the least because I'm sure I will get the least for it.
b) Fix it and offer it for sale repaired. This is my preferred approach but my concern with this is that I still won't get a fair price for it even repaired because it has had a foundation issue.
c) Rent it and repair while it's being rented. At least this way I can write off the expense of the repair. Though the downside to this is then I risk not being elgible for the caplital gains exclusion when I sell it.

Whats my best strategy?

LUVMBDiesels · #2 09-29-2007, 07:14 PM

How bad is the crack? Is it structural or just a settling issue? If it is structural you will have to disclose it to all potential buyers (at least in NY and NJ) If not, I would have it repaired and not worry about it.

In any case I would repair the crack as it will only further decrease the value of the house the longer you let it go.

MBlovr · #3 09-29-2007, 07:23 PM

I has become structural this year with the drought that we have had here. The front door tends to bind and I can see the front concrete porch has shifted away from the house about 3/8 of an inch at one end. At the top of one of the cracks in the basement I can put a fingertip into.

Hatterasguy · #4 09-29-2007, 07:30 PM

I think your best choice is to fix it.

Why is it cracking? Sounds like its settling, what is this house built on?

Medmech · #5 09-29-2007, 07:45 PM

There are many variables, how is the market in your location? How will the stigma affect market time? What are the capital gains? Do you want to be a Landlord? Are you positive that the repair will be final? Even if it is fixed there may be a stigma of the problem occurring again.

I vote for B and C depending on the variables, if your market is red hot A may be viable.

MBlovr · #6 09-29-2007, 08:04 PM

Quote:

Originally Posted by Hatterasguy

I think your best choice is to fix it.

Why is it cracking? Sounds like its settling, what is this house built on?

The house is 78 year old. Which is why it wasn't a big deal to me to see some cracks in the foundation while I lived there. Our soil has a lot of clay content which is why I guess it is vulnerable to the drought. Apparently I am not the only one you can't get a foundation repair guy to look at it for a month around here.

MBlovr · #7 09-29-2007, 08:08 PM

Quote:

Originally Posted by Howitzer

There are many variables, how is the market in your location? How will the stigma affect market time? What are the capital gains? Do you want to be a Landlord? Are you positive that the repair will be final? Even if it is fixed there may be a stigma of the problem occurring again.

I vote for B and C depending on the variables, if your market is red hot A may be viable.

Our market in the midwest is anything but red hot though I don't think that it is complete stalled. I think we have just slowed down considerably. The simplest most straightforward strategy is b which is what I will probably do and just take my lumps when I sell it. I am thinking about consulting a structural engineer as part of the process.

Chris Bell · #8 09-29-2007, 08:25 PM

Whatever you decide to do make sure you disclose the problem to any potential buyer. It's Ok to sell a house with a cracked foundation as long as you disclose it to the buyer so that he or she knows exactly what their buying. If you sell the house without full disclosure your leaving yourself open to a lawsuit.

Hatterasguy · #9 09-29-2007, 08:32 PM

Quote:

Originally Posted by Chris Bell

Whatever you decide to do make sure you disclose the problem to any potential buyer. It's Ok to sell a house with a cracked foundation as long as you disclose it to the buyer so that he or she knows exactly what their buying. If you sell the house without full disclosure your leaving yourself open to a lawsuit.

The problem with doing that and not fixing it, is well no one could buy it. Or they will want it at a massive discount.

This happens a lot in todays market. Buyers are in charge, there are 10 homes similer to yours on the market, why should they buy yours?

I'd talk to a really good agent and see what they think. Run your situation by them and see what they say.

Carleton Hughes · #10 09-29-2007, 09:33 PM

I had one.Little Cape I wanted to flip.
2 ,1 1/8"cracks in the ceement.

Fortunately the basement had 8'ceilings so I and my "meddlers three"framed out the basement,plumbed it,roughed in a toilet,vanity and shower and when we were done there was no trace of any cracks.

Of course we brickfaced the outside.............

Added 10k to the selling price.

fz500sel · #11 09-29-2007, 09:53 PM

Quote:

Originally Posted by MBlovr

Our market in the midwest is anything but red hot though I don't think that it is complete stalled. I think we have just slowed down considerably. The simplest most straightforward strategy is b which is what I will probably do and just take my lumps when I sell it. I am thinking about consulting a structural engineer as part of the process.

Where in midwest are you?

I just went thru repairing my basement/foundation cracking problem. Like you, I have alot of clay. The top 6" is good dirt but after that it is nothing but clay. Hard to dig. Took awhile but I feel pretty good that I have sealed the cracks and repaired the damage.

good luck,
Frank

Ken300D · #12 09-29-2007, 09:55 PM

It is possible to specifically state that a house you are selling is "as is" and this should release you from any obvious or hidden condition. It becomes the buyer's responsibility to determine if any problems exist.

This usually reduces the price you can get for the house, but not always. Seems to be a growing trend for selling houses as it releases the seller from lawsuits over small issues - and maybe big issues too.

Ken300D

LUVMBDiesels · #13 09-29-2007, 10:06 PM

Quote:

Originally Posted by Ken300D

It is possible to specifically state that a house you are selling is "as is" and this should release you from any obvious or hidden condition. It becomes the buyer's responsibility to determine if any problems exist.

This usually reduces the price you can get for the house, but not always. Seems to be a growing trend for selling houses as it releases the seller from lawsuits over small issues - and maybe big issues too.

Ken300D

This depends on the state you are living in. In NY and NJ it is against the law not to disclose any structural defects and ,if you can believe it, if the house is haunted! (law suit on Long Island over a "haunted house" in Amityville)

You can ask a local Realtor or a real estate attorney about disclosure or if you can past a big AS IS on the contract

Hatterasguy · #14 09-29-2007, 10:41 PM

Quote:

Originally Posted by Ken300D

It is possible to specifically state that a house you are selling is "as is" and this should release you from any obvious or hidden condition. It becomes the buyer's responsibility to determine if any problems exist.

This usually reduces the price you can get for the house, but not always. Seems to be a growing trend for selling houses as it releases the seller from lawsuits over small issues - and maybe big issues too.

Ken300D

They pretty much all are "as is" around here.

Personally I think the disclosures are BS, and I know of at least one attorny who tells his clients not to fill them out. I have seen a couple of lawsuits where the disclosures did nothing.

It all means very little. If the buyers want to sue you they most certianly can and do.

450slcguy · #15 09-30-2007, 03:11 AM

List the house with full disclosure for a price that will satisfy your needs, but still compensate the prospective buyer for repairs. That way your legally and morally covered. It won't cost you anything if the house doesn't sell. And if you do get a reasonable offer then it's decision time. Do a 3 month listing and see what happens. What do you have to loose except a few months?