Think I bought a lemon (house) Huge structural repairs and not sure what to do.

[Late_Bloomer]

So the wife and I bought a house in central Texas near the end of 2013. The house was built in 1961, 3 bdrm, ranch on slab foundation. House inspector didn't clue us in on any issues with the house. He said roof was good, plumbing was good, and foundation looked good. He did say the wiring was no longer up to current code but was fine.

The first year was good and we had no issues. Soon after the second year, plumbing in kitchen busts above the slab. This was something I was able to fix without having to call in the $$ plumbers. We started seeing cracks forming in the walls and sealing of the house, which there were none when we moved in. We did know there was foundation work done in 2012 and were under the impression it had been corrected then. What we didn't know was the slab was fractured in two places.

Well it turns out, the foundation company (we have a lifetime warranty from previous work before we moved in) has to come out and put additional piers under the west side of the house. Apparently the house already has over 14 piers on that side alone. We are looking at 3.000+ minimum. We can't prove, but strongly believe this has busted up the plumbing. We had an inspection done on the lines last week because the system had been backed up for months and we didn't know about it. It looks like both bathrooms are completely busted up under the slab and the main line from the front of the house to the city connect is busted up. I was told the only real fix is to re plumb the house. This would cost 15,000+. We could possibly get away with just re plumbing the two bathrooms at a cost of 8,000+.

In addition to this, it appeared after we bought the house, the first time the foundation was re adjusted with piers, they shifted the roof and never corrected that, so the rafters are separated from the joists up to 1/2 inch or more in some places, which in turn, is warping the roof. We had a contractor come out and evaluate the issues. He put up a nice front while evaluating the house and said he can do the job, but never contacted me about it after he left. Something scared him off.

Since this purchase is so recent, we still owe almost full value of 134,000. I think we just want to get rid of this thing. We can't even try to sell it until we at least cough up the money to fix the two immediate issues (foundation and plumbing)and this is all money we won't get back trying to sell it.

Any advice? It was stressful enough trying to buy this damn thing, and I have no idea how to sell it. Just scared about how much money we will lose. However, if we did decide to go all in and re plumb the whole house, and possibly re do the roof, I believe it would put us in a position where we would be committed to keeping it forever because we would never recoup those costs.   

[AlwaysBeenASaver]

Since you said you can't sell it w/o fixing the plumbing and foundation, focus on fixing those. Get several estimates from different contractors about those. Compare what they SAY, not just the dollar amount they bid. You can often get good information from what they say. Pick the one who actually seems to understand the underlying problem and have a permanent fix for it. Don't focus on "keeping it forever", that will just cause more stress. There is no rule that you have to keep a house forever just because you can't recoup all your costs. You're also living there, thus not paying rent, so you would have unrecoverable costs even if you hadn't bought a house. Get the house to a livable and sellable condition, then decide if you still feel you need to sell it and can't deal with living in it anymore. If so, take the loss, consider it a life lesson.

[marty998]

How much to demolish and rebuild?

[justajane]

Dumb question, since I imagine you're already checked, but will the sewer company pay for the lateral line? I know in our municipality they will. It's worth double checking.

Otherwise, what a nightmare. I'm so sorry. Presumably you bought this house because you liked something about it, so I would fix it and live there for a while. If you move immediately, you get no actual benefit from the "improvements." I guess the only reason to move immediately would be because you are afraid more is wrong with the house  that will emerge in the next few years. But ultimately, houses do degrade. Shit will happen to the next house you buy too. At least if you stay in this one you have brand new plumbing. We are replacing the full plumbing and stack on our original bathroom to the tune of 5K just for the plumbing so I definitely feel your pain. In our case, we also have to gut the floor and rip out plaster walls to get to the 80+ year old plumbing.

One more question: Any way insurance will pay for anything?

[Blatant]

I feel your frustration.

Houses here in the Phoenix area are typically slab construction as well. Our most recent house developed pinhole leaks in the copper piping in the slab and we had to have the entire house re-plumbed. These things happen.

I understand you're looking for someone to blame. It's natural. I personally wouldn't be looking at the home inspector. I mean, think about what this person's job is. It's a relatively cursory inspection of the mostly visible portions of the construction. No way for that guy to know the slab is cracked.

The previous owners, however, probably had reason to know. Not sure what your disclosure rules are, but it might be worth finding out.

I'm not a construction expert, but it certainly makes sense that a cracked/moving slab could damage the plumbing. I think I'd be looking at repair and stabilizing the slab FIRST and then address the other problems.

Only you can say what's right for your family. If the house works for you otherwise, start fixing it. Otherwise, consider a "distress" type situation and maybe sell to a flipper or something. You'll take a haircut on it, though. Good luck.

[ShoulderThingThatGoesUp]

Lots of slabs got screwed up in the 2010 drought. Depending how much you like the house, I'd do the math on a deed in lieu of foreclosure or a short sale. Not recommending it, just worth considering the options. Texas is, I think, a no-recourse state so you won't owe the balance (not a professional opinion, just my layman's understanding.)

[Chrissy]

Sounds like this is your first home, and now you have buyer's remorse.  Despair not!  I think this is a question of perspective.  You've been in the house for 3 years.  Repairs will cost $18,000 (not including the unknown roof repair).  Once done, it seems you could sell the house for what you paid, if you wanted.  My question is, how much would it have cost you to rent a 3BR ranch house for 3 years?  If it's $500/mo, which is $18,000 spread over 36 months, then selling after doing the repairs might put you a little above the cost of renting for 3 years, but not catastrophically so.  If renting a comparable abode is MORE than $500/mo in your area, you might even be ahead a little.

[Late_Bloomer]

I don't blame anyone but myself. I should have researched more and realized older homes in Texas are a bad investment. Otherwise, I love the house but it looks like the foundation will be a recurring issue which may never be truly fixed. I'll call the insurance on Monday and hope they will help us out.

Renting vs. buying in this area are about the same overall and if we can sell it for what we owe we'd be fine with eating these repair costs, but something tells me it isn't going to work out that well. We were in double down the mortgage stage so at least we can take that extra money to pay the loan we have to get to do the repairs. This is all that's keeping me sane about the whole ordeal. If we had to cut down our investment savings I'd just let the bank take it back.

If anything, learn before you leap. This is a real eye opener for us and will sharply change the way we do this for the next one. If we can fix, sell, and get out from under it, we think we'll just rent until we FIRE and buy in another state. We kind of planned on that anyway, and this whole experience just solidifies that idea.