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Buying a House with a Bad Foundation

  • Transcript

    LESLIE: Alright, well I think our callers have finally caught on that Tom was a home inspector for many, many years and Brian in Illinois wants to pick Tom’s brain about buying a house with foundation issues.

    So Brian, have you bought the house yet?

    BRIAN: No ma’am, I haven’t.

    TOM: That’s good. (chuckles)

    LESLIE: OK, good.

    TOM: Tell me about the foundation, Brian. What are you seeing?

    BRIAN: Well, about 20 feet or so of the basement is either falling down or has already fallen down. It’s a limestone foundation with a dirt floor.

    TOM: OK.

    BRIAN: And it has problems in the basement, so I’m assuming it needs to be replaced.

    TOM: OK.

    BRIAN: And my question today is if there’s any companies that specialize in that type of thing that – or is this something that I can handle myself with some help.

    TOM: Well, it’s possible. It depends on how much of a mason you are. It’s a great question and when you’re buying or selling a house – I mean fortunately you’ve discovered this issue before you bought the house. But even if you owned a house and had a serious foundation problem, there is a way to do this repair that will create what, in effect, is sort of a pedigree on the quality of the repair because that can become very, very important if you ever want to turn around and sell this house.

    So what I would recommend you do is to hire a structural engineer to design the repair for this bad basement wall. The engineer has nothing to sell you but his design information, his design expertise, and that’s very critical to you right now. Because a trap you could fall into is you could call three or four carpenters – I mean three or four contractors; they’ll all come in; they’ll all have an opinion on how it should be fixed; they’ll all be happy to try to fix it, but none of them really have the design expertise to tackle the job. You hire the engineer, the engineer’s job is only to understand what caused the failure and how best to repair it. And that engineer will prepare a report and a set of specifications that details exactly how that wall should be repaired.

    Now once you have a design complete, then you can take that design and put it out to bid with three or four or five contractors. And then once you choose the contractor that you want, now you have your design, now you have chosen your labor, the contractor should complete the repair. Then there’s one more really important step, Brian, and that is you should have the engineer come back and inspect the contractor’s work before you pay him and certify that it was done correctly.

    Now, the reason I say that’s a pedigree is because imagine that in the future, a home inspector walks in the door and says, “Hmm, interesting. This wall has had some major repair. What’s the story here, Brian?” And you go, “Well, before I bought the house it came up as being an issue, so we hired an engineer and they designed a repair. Then we hired a contractor; they completed it to the engineer’s specification. Then we had the engineer come back, inspect it, say it’s A-OK, and here’s his report.” Hey, if I’m that home inspector, Brian, I’m like, “Cool”; no questions asked. I would tell my client, “These folks did everything exactly the right way” and I would be completely comfortable with the quality of that repair and the fact that it wasn’t going to happen again in the future.

    But that’s really the way to attack it and to make sure it’s done once, done right, and really doesn’t come back to haunt you in the future.

    LESLIE: Yeah, but also don’t you think that because the house has such a significant problem with the foundation, Brian should be able to negotiate a little bit with the seller to sort of perhaps split the cost or reduce the price? Because this is obviously a necessary repair, so there has to be some recourse.

    TOM: Oh, that absolutely goes without saying. This is something that really, Brian, you shouldn’t be paying for at all unless you are buying the house at such an incredible discount that it makes sense for you to take that risk. This is clearly something that I hope has become something that you’re negotiating in the transaction.

    BRIAN: Yes, of course. Yes. (clears throat) It actually was a repo house; the guy didn’t pay the bills.

    TOM: Right.

    BRIAN: It’s in my neighborhood and I’m also a real estate investor. I’m just getting into it. I have three properties right now and I’d like to have this one as a fourth.

    TOM: Well, I’ll tell you, it sounds like it could be a great opportunity because this is the kind of house that nobody else is going to really want to look at; and therefore, perhaps you can get it for a great value and you’re obviously comfortable working with contractors and doing repairs. We just want to make sure you do it right.

    You know, there’s certain jobs that you can just send a contractor in and tackle, like replacing a roof or replacing your electrical service. When it comes to the structural integrity of the foundation and one that’s so severely deteriorated and so severely collapsed, you really need to have a design pro help you out with this one. OK?

    LESLIE: And the bonus by having the design pro put sort of a plan together on how to get this job done is when you bid it out to contractors, they’re all bidding on the same thing.

    TOM: Exactly.

    LESLIE: I think that’s a great idea. And whereabouts should I get information and resources on a structural engineer?

    TOM: Well, you’re going to have to call local engineering firms. And the other thing that you could do is you could go to your local building department and find out whose work they typically see. A lot of times the local building inspectors will be familiar with a group of four or five or six or seven architects or engineers that do this sort of work.

    BRIAN: OK. Alright. Well, you guys have been a great help. I do appreciate it.

    TOM: You’re very welcome, Brian. Good luck with that job and call us again and let us know how you make out.

    BRIAN: I definitely will.

    TOM: Alright, thank you so much for calling us at 888-MONEY-PIT.

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