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Backstory:
My wife and I have been waiting for 8 years to buy our first house. After viewing over 100 properties over the years, we found the only affordable house that my wife really likes. It's a short-sale that was finally approved and we have 28 days to close. Escrow has my $10K deposit and I just had a home inspection done yesterday. It was revealed that the house has sloping issues in at least 4 areas (3 of which are in areas where additions were made in the last 8 years). There are also a few roof leaks due to a poor custom skylight installation and improper roof vent flashing. Other than that, the house is quite stunning.
The numbers:
The seller will lose about $350K ($150K downpayment and $200K in improvements), the lender will lose about $300K in the short sale. While this house is by no means cheap, it is probably the lowest priced SFR in all of Newport Beach, Ca and is probably $80K below market value. The inspector estimated the skylight/roof repair ~$2,000 and the foundation repairs will be at least $10K. We're putting in 25% as our downpayment in order to get a 30 year mortgage at 3.875% and $3K in total closing costs.
Bottomline:
I've never had or known anyone who has had to have their foundation repaired. I've only seen it done on Mike Holmes TV show on HGTV. Does anyone have any experience (negative or positive) with this repair?
You need a licensed Foundation Engineer (not repair company) to come in and give you a professional opinion and written report on what repairs are needed. He should be able to recommend 2-3 good companies to do the repairs. The Engineer then would come back to verify the work was done correctly and remeasure the house.
You need an expert. It will be the best $400-500 you can spend.
Before you go any further, you need to ask your bank or broker if they will issue a mortgage on a property with roof leak and foundation issues. They may not, or you may have to go with a different type of loan (203k) with different rates.
Foundation issues is about the worst issue that you could ever encounter. Might be a quick fix, or you may need to jack up the house and pour a new foundation which could cost $50k. I dont know your particular problem. If the bank says it will provide the loan, i would do what the other poster said, hire a foundation guy.
If this fix is too expensive, the house isn't worth anything and your just buying a piece of land. If its a huge problem, and you dont fix it, you may not be able to ever sell this house.
Last edited by 399083453; 03-02-2012 at 08:40 AM..
I second Rakin that you should have a structural engineer come out and evaluate the property. I would also have a couple of contractors that specialize in foundations come out, evaluate, and quote. At least out here, foundation issues are often the result of drainage problems so you can't just fix the foundation and call it done. You fix the drainage problem, then fix the foundation problem. You need to make sure you are getting quotes on the appropriate repair.
Agree with the need for a good structural engineer (and possibly a soil engineer). DH and I went through this and I must say it was a nightmare. Despite having very good people, once the repair started there were many issues that came up. Repairs ended up being significantly higher than we had foreseen. I personally would run, not walk from any house with a problem like this.
Thanks everyone for your advice. I'll have to schedule an appointment with both the tenant and a structural engineer. The sloping issues are around the corners of the house where additions were built (master bedroom walk-in closet, wall of additional bedroom, and added 3rd car garage). The original portion of the house is problem-free. I'll talk to my agent about disclosure to the lender. After all this time, we might just have to walk away...my wife will be bummed.
We have had to fix foundation issues before - ours was raised. Not only do you have the cost of foundation repair, but when they level out the foundation, things move in the house. Tiles crack. Walls crack. If you have wallpaper, it can tear forcing you to remove wallpaper and replace or paint/texture. Etc, etc, etc. The interior repair in our house was about $4K.
If your house is bowed out like an "Umbrella" you may have a water / plumbing leak under the slab. That can cause the interior soil to swell and rise in the center and the edges to drop down.
You might have the city out to check the meter for movement. That would show water leaking when all the other water faucets are turned off.
Bummed about not making the biggest financial mistake of your life? She will get over it.
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