Foundation Issues: Costs & How to Diagnose Exterior Signs of a Problem

mortar cracks

According to Google’s keyword search tool, over 200,000 foundation repair searches are made nationally every month.  Foundation repair is on the mind of many people as they are experiencing issues or having concerns.

While many people will live with foundation settling in their home for years, the urgency to address the problem comes when it is time to sell.  The buyer pool for a property with foundation movement can be severely limited for several reasons:

Problems Caused By: Foundation Issues

1.  Government guaranteed loans such as VA, FHA, USDA, etc. are usually stalled during appraisals when evidence of foundation settling is present.  This often limits the purchase power to some conventional loans, cash, or the FHA 203k loan.

According to HUD, a home’s foundation has to be without evidence of “continuing settlement”.  Well, that is a rather vague statement.  Furthermore, how can you tell if a foundation is continuing to settle with just a snapshot in time?   The truth is if a house has evidence of settling and has not been repaired, it will continue to settle.

2.  Many buyers do not want to buy a house with foundation problems even at a discount because of the stigma attached to foundation repairs.  However, in Central Texas, foundation repair is becoming less terrifying for retail buyers because of a solid history of successful repairs.

3.  After a foundation is repaired there are many other costs that can be incurred such as plumbing repairs, window and door repairs, drywall patching, painting, brick/stone re-pointing, and the list goes on.  The greatest expense that is almost as large as the foundation repair is the sewer plumbing under the slab.  As a foundation flexes the pipes try to move with it.  When a house has a deflection of greater than 3 inches per 20 ft, the chance of the sewer lines opening are greatly increased.

An Investor’s Opportunity

This shrinkage of the buyer pool creates an opportunity for the fix n’ flipper.  Because many of the extra costs of repairing a home after a foundation repair are incurred by the fix n’ flipper, he/she is able to build equity into the property by taking on the foundation repair.

For example, common repairs are flooring, drywall patching, and painting.  These things are typically already in the budget of a flipper, yet the discount should reflect these post-foundation repairs.

As promised, let’s complete our training on becoming a Foundation Movement Detection Expert.

Last week’s blog included some quick tips for catching foundation issues inside of the house.  Let’s take a quick look at tell-tale signs on the exterior:

Finding Foundation Problems by Looking Outside a House

The Street Test: Is the Driveway or Sidewalk Cracked?

Ever been on a road that is like a roller-coaster?  You know, the one where you hold up your coffee cup so it doesn’t spill from the bumps and whoop-dee-doos?  Remember that houses don’t usually have foundation problems, but rather have “soil problems”.  The same soil that is moving under a house is the same soil under the street and driveway of that house.  We are currently rehabbing a house with a repaired foundation and the street is on scrapes the bottom of my truck!  If the driveway and sidewalks are severely cracked up, buyer beware.

Façade Tells All: Cracked Walls, Windows & Doors

Houses with brick or stone facades are the easiest to diagnose.  I have yet to look at a home with foundation settling that did not have cracks in the mortar of it’s masonry.  You are looking for cracks that begin at a window, door, or the foundation itself.  If they run to the top, they are very likely from foundation settling.

Separation Anxiety: Is the Fascia & Trim Moving?

If the home is mostly siding, look at where the fascia boards meet.  Look at the joints of the siding.  If there is separation, it is typically from settling.  The trim around the garage is another area that tends to separate when there is shifting of the soil.

Not A Golden Pond: Gutter Pooling

I always look at gutter spouts to see if they are dumping next to the foundation.  This is one of the biggest culprits for uneven settling of the soil.  When there is excessive water and ponding within 5 feet of the foundation, that house will likely have movement there.  Ponding is easy to spot.  Simply look for where the grass is gone and the ground is packed hard.

Congratulations Foundation Movement Detection Expert!

Now go and know with confidence whether or not the home you are wanting to buy is foundation movement free!

Photo: Luis Argerich

This Article is Copyright © 2004-2012 BiggerPockets, Inc. All Rights Reserved.

Foundation Issues: Costs & How to Diagnose Exterior Signs of a Problem

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