Author Topic: Buying Property with Foundation Problems  (Read 5732 times)

Crazydude

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Buying Property with Foundation Problems
« on: April 27, 2016, 10:20:16 AM »
I'm considering purchase a duplex (to live in one unit) and it has foundation problems. A couple horizontal cracks in the basement walls (poured concrete) and evidence of water seepage. It was built in 1912, so these issues aren't surprisingly. Just had it quoted for a fix from Everydry and for a long term solution, they quoted $19,000! Another short term solution: $13,000!

There are no cracks in walls or ceilings in any of the units, just the basement. Obviously there's no way I'm paying for this. And I have no leverage with the seller, as it's a hot market and there are other offers waiting (mine was the first and therefore accepted). Just before the foundation guy left, he said another option is to just buy it as is, and keep them in mind if I ever want to repair it. To me, this seemed weird, first quote me $19k to fix it, then say, "eh, just buy it as is, it lasted this long it's probably got another 100 years in it." And he really did say just about, he said it won't be "falling down" anytime soon.

So this leaves me in a conundrum, I really like the property, but don't want to make an emotional decision. And I'm confused about the severity of the foundation "problem". It would be a huge project to fix, but at the same time he made it seem like the whole thing is optional...

Has anyone here done any foundation work, or have foundation problems they are doing nothing about?

Would love to hear some thoughts/experience.

Thanks.

Midwest

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Re: Buying Property with Foundation Problems
« Reply #1 on: April 27, 2016, 10:25:23 AM »
I would consider hiring an engineer if you are serious about the purchase.

We looked at a property with basement walls that were bowing in badly (the rim joist was 4-5" off the foundation in places).  Engineer was my next call, but there was too much risk to waste my money paying the engineer.

Crazydude

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Re: Buying Property with Foundation Problems
« Reply #2 on: April 27, 2016, 10:30:28 AM »
Ideally I tried, but my my 10 days to get all inspections are done, and I have to make my decision today.

Midwest

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Re: Buying Property with Foundation Problems
« Reply #3 on: April 27, 2016, 10:42:02 AM »
Obviously I haven't seen the property so take this with a grain of salt.

I've walked away from deals with foundation issues that didn't make financial sense.  On another house, we had the slab jacked up and still made money on the deal.  You know the long term repair is $19k.  Will another buyer take the property with the issues?  What about in a normal market? 

Our market is fairly hot as well right now too.  Looking at a house tonight.  If the deal is overpriced according to my metrics (normal market metrics) or there are major issues (we want to look at foundation), I'll walk. 

Not saying you should walk, but sometimes the best deals are the ones you don't make.

Was the foundation issue disclosed when you offered?  If not, they may need to disclose to future buyers which might help your leverage.

Crazydude

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Re: Buying Property with Foundation Problems
« Reply #4 on: April 27, 2016, 10:50:57 AM »
Obviously I haven't seen the property so take this with a grain of salt.

I've walked away from deals with foundation issues that didn't make financial sense.  On another house, we had the slab jacked up and still made money on the deal.  You know the long term repair is $19k.  Will another buyer take the property with the issues?  What about in a normal market? 

Our market is fairly hot as well right now too.  Looking at a house tonight.  If the deal is overpriced according to my metrics (normal market metrics) or there are major issues (we want to look at foundation), I'll walk. 

Not saying you should walk, but sometimes the best deals are the ones you don't make.

Was the foundation issue disclosed when you offered?  If not, they may need to disclose to future buyers which might help your leverage.

I see. The way the market is here, I'm almost certain anybody lined up to buy it will do so and not even give a darn about the foundation. It was not disclosed in the Seller's Disclosure. To be honest, I wouldn't be surprised if the seller had no idea, never had it checked out.

Midwest

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Re: Buying Property with Foundation Problems
« Reply #5 on: April 27, 2016, 10:58:47 AM »
I'm not in a market where foreign dollars are supporting at least some of the price growth.  Given that, I believe our market is hot right now because people finally believe in the economy enough to buy and interest rates are low.  Once this pent up demand is gone, I'm not sure how long 24 hour sales stick around.  Once that's gone, do prices drop?

Given that, I'm viewing our hot market from an investor point of view as musical chairs.  If I can buy at the right property at the right price, I'm fine but don't want to be stuck with a massively overpriced house when the music stops.

Your market could be different but that's my view on my local market.

Either way, good luck with your decision.

Miss Piggy

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Re: Buying Property with Foundation Problems
« Reply #6 on: April 27, 2016, 11:05:14 AM »
Are the walls fully upright, not bowing/caving, etc.? And are these "just" hairline fractures that could be sealed?  With a price tag of $19,000, I'm assuming we're not talking about simple hairline fractures on old walls.

When we bought our house, we got lucky because the basement was actively leaking (it was storming outside) during our inspection. The walls were stable but cracked. We negotiated with the seller to have the cracks sealed; I have no idea what they paid to have it done, but I'd bet my life it wasn't more than a couple thousand. No problems since...other than a new crack when we had our concrete back patio ripped out and re-poured. They used some heavy equipment to do that, and put a little too much pressure on that wall.

Crazydude

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Re: Buying Property with Foundation Problems
« Reply #7 on: April 27, 2016, 11:11:23 AM »
Midwest, that's perhaps the best way to approach the market right now. My property is probably slightly under-priced, which is why I feel I'm getting a good deal (minus the foundation). The golden question is how long will values continue to rise?

Miss Piggy, the walls are not bowing, the cracks are decent size, but not crazy, but there are a lot of "stains" from water seepage. The cracks that do exist, are supposedly from water on the outside of the wall expanding during the winter.

Of the course the problem will continue to get worse, but the question is, will it take 5 years or 50? Cause I probably won't own it more than 10 years. I guess I'm still a little baffled that the inspector tried to sell me a $19k repair package, then said, "eh just paint over it and keep us in mind." Hard to take it seriously...

Crazydude

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Re: Buying Property with Foundation Problems
« Reply #8 on: April 28, 2016, 03:21:22 PM »
I had to back out of the deal, not just because of the foundation, but as other quotes came in for other problems, the total quickly exceeded $60k. New roof, new rear two story porch, window repairs...and the cherry on top is its in a historic district meaning exteriors repairs are highly regulated (and therefore more expensive).

Back to the drawing board.

fishnfool

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Re: Buying Property with Foundation Problems
« Reply #9 on: April 28, 2016, 04:25:49 PM »
I had to back out of the deal, not just because of the foundation, but as other quotes came in for other problems, the total quickly exceeded $60k. New roof, new rear two story porch, window repairs...and the cherry on top is its in a historic district meaning exteriors repairs are highly regulated (and therefore more expensive).

Back to the drawing board.

Smart move!

That foundation alone sounded like possibly opening a can of worms.

marty998

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Re: Buying Property with Foundation Problems
« Reply #10 on: April 29, 2016, 02:03:55 AM »
I'm impressed a house built 100 years ago is still functional in the modern age...

How many electric wall sockets does it have? (You wouldn't need a thousand back then for all your phone charges).

Plumbing is lead pipes? Is that a health hazard? Lead paint on the walls? What about asbestos?

Termites can do a lot of damage in 10 years let alone 100...

The layout of the place...? Open plan living wasn't exactly flavour of the month.

I would see a 100 year old home as an opportunity to just pay land value only, demolish and rebuild.


Crazydude

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Re: Buying Property with Foundation Problems
« Reply #11 on: April 29, 2016, 09:31:33 AM »
I'm impressed a house built 100 years ago is still functional in the modern age...

How many electric wall sockets does it have? (You wouldn't need a thousand back then for all your phone charges).

Plumbing is lead pipes? Is that a health hazard? Lead paint on the walls? What about asbestos?

Termites can do a lot of damage in 10 years let alone 100...

The layout of the place...? Open plan living wasn't exactly flavour of the month.

I would see a 100 year old home as an opportunity to just pay land value only, demolish and rebuild.

You must live a newly inhabited area. I've lived in a few places around the US, and while there are many new suburbs and subdivisions, there are also many old neighborhoods, with the houses still intact. And if maintained well, they could last a 100 more years.

As far as this property goes: all of the wall sockets are electric (haha). There are plenty of outlets, and one or two per room have been re-wired with a ground. Mostly copper pipes, still some old galvanized.

Is there lead paint? Almost certainly, but it's been painted over probably 20 times or more. The only time you'd have to take precautions is if you're going to tear down a wall or otherwise disturb it.

There was at one point asbestos "wrap" around some pipes or something in the basement, and has since been removed/replaced (there may be a law about this).

No termite damage. And the layout isn't really an open floor plan, if that's what you're asking. But it was originally a SF home, converted now into duplex, 2 bd 1 bath each with separate dining room and additional "office" room.

CashFlowDiaries

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Re: Buying Property with Foundation Problems
« Reply #12 on: April 29, 2016, 12:08:14 PM »
I had to back out of the deal, not just because of the foundation, but as other quotes came in for other problems, the total quickly exceeded $60k. New roof, new rear two story porch, window repairs...and the cherry on top is its in a historic district meaning exteriors repairs are highly regulated (and therefore more expensive).

Back to the drawing board.

wise decision you made!


ShoulderThingThatGoesUp

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Re: Buying Property with Foundation Problems
« Reply #13 on: April 29, 2016, 01:42:05 PM »
I'm impressed a house built 100 years ago is still functional in the modern age...

How many electric wall sockets does it have? (You wouldn't need a thousand back then for all your phone charges).

Plumbing is lead pipes? Is that a health hazard? Lead paint on the walls? What about asbestos?

Termites can do a lot of damage in 10 years let alone 100...

The layout of the place...? Open plan living wasn't exactly flavour of the month.

I would see a 100 year old home as an opportunity to just pay land value only, demolish and rebuild.

My house is from 1910, but in 2011 it was gutted entirely. So it has PEX piping, it's up to modern electrical code, and a completely open first floor that can nicely accommodate our family our large groups. Its structural walls are brick. Most of the houses near mine haven't been so thoroughly updated, but because the location is excellent they don't last long on the market anyways.

Crazydude

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Re: Buying Property with Foundation Problems
« Reply #14 on: April 29, 2016, 09:43:26 PM »
I'm impressed a house built 100 years ago is still functional in the modern age...

How many electric wall sockets does it have? (You wouldn't need a thousand back then for all your phone charges).

Plumbing is lead pipes? Is that a health hazard? Lead paint on the walls? What about asbestos?

Termites can do a lot of damage in 10 years let alone 100...

The layout of the place...? Open plan living wasn't exactly flavour of the month.

I would see a 100 year old home as an opportunity to just pay land value only, demolish and rebuild.

My house is from 1910, but in 2011 it was gutted entirely. So it has PEX piping, it's up to modern electrical code, and a completely open first floor that can nicely accommodate our family our large groups. Its structural walls are brick. Most of the houses near mine haven't been so thoroughly updated, but because the location is excellent they don't last long on the market anyways.

I'm in a similar market. Majority of the houses were built 1920 or earlier, and if they're priced right, they won't last more than a couple of days being listed.