To fix or not to fix? That is the question. Many home sellers wrestle with the decision to repair or not repair their foundation before putting it on the market. The mental chatter probably goes something like this:
I’ve lived in this house for a long time and none of these foundation issues have ever bothered me much, why should I fix it for someone else?
But we want to sell for the most money possible so does that mean I should fix it?
I don’t really have a big stack of money lying around to fix a foundation, that’s why I haven’t done it already.
Buyers all want the home they buy to be totally perfect, so shouldn’t we do what they want?
We’ve heard that it’s a seller’s market and it might not matter if the foundation is fixed or not, someone will buy this thing anyway.
And it goes back and forth from there, like an eternal tennis match in your mind of arguments for and against fixing the foundation before selling . . .
Craig Tripp, Owner of Anchor Foundation Repair, has heard all the above thoughts expressed to him over the years of working with homeowners to repair 4,000+ foundations in the Brazos Valley area. He has noticed through time that there are several typical options available to home sellers that he can share.
Let’s put an end to this neverending story. Here are 4 ways to handle foundation repairs so you can consider each and decide what you want to do.
Option 1: Do nothing and list as-is for a lesser amount
Option 2: Complete the repair before putting it on the market
Option 3: Offer a credit to buyers to be used towards repairs after closing
Option 4: Negotiate repair terms once an interested buyer has had inspections
We will review the options and talk about the potential results of each. Before we get “moving” on this, there’s one thing you should know. If you have a known foundation issue or past foundation work, it is required by law to be disclosed to potential buyers during the sales process. Now with that disclaimer out of the way, let’s check out these options.
Option 1: Don’t repair the foundation and list as-is for less
This is a “no work” option for you since you’re not doing anything. Don’t worry about fixing it before putting the home on the market, just know you’re not going to get top dollar. Certain kinds of buyers don’t mind a little ol’ foundation problem and are not easily scared off by the need for repairs. Usually, it’s people who are looking for that “fixer-upper” bargain or are aspiring “house flippers.”
These kinds of buyers are not expecting a perfect home but will be expecting to pay less for the home so that they have funds available to do the fix-ups, including the foundation repair.
“I have been in the area long enough to know that any home can be sold with the right terms. Seldom do I see a home that absolutely cannot sell because of foundation settlement. I do know that it will make a certain set of buyers uneasy and the price may need to be altered to account for the potential for foundation repairs.”
Craig Tripp – Anchor Foundation Repair Owner, CEO, President, Foundation Repair Extraordinaire
You would want to know the estimated cost of foundation repairs and subtract that from your asking price. Make sure the sales listing says that the home is being sold “as-is.” Not that a buyer can’t or won’t still ask for repairs, but it helps create the expectation that you’re not going to do any and that the home is priced accordingly.
What to Consider When Listing in a Seller’s Market
A “seller’s market” means that the market is more favorable for a seller i.e. homes are selling for more money and more quickly due to limited inventory. If your local real estate market happens to be in this state, people still might fight over your home even if it’s not in flawless condition.
The best strategy in a case like this is to price a home appropriately based on its current condition, don’t over-price it. If it’s desirable enough for the market, you could get multiple offers quickly and this competition can drive up the price naturally. This is a situation where the market truly determines the price of the “product.”
DON’T be cocky and over-price your home from the beginning. That just irritates people, and then they don’t even want to look at your home in the first place on principle. This is an anecdotal opinion based on being married to a Realtor® for 20 years so it’s not a direct expert opinion but . . . wives know these things . . .
Option 2: Do the foundation repair before putting it on the market
Yes, you can sell your house even if it has had foundation repairs. There are buyers who would appreciate that the work has already been done.
If you want to head off any wary buyers right off the bat, you can do the foundation repair before putting it on the market. This will cost you upfront money but it can open up your buyer pool to more people, increasing the chance for a sale.
Buyers can be picky and sometimes have unrealistic expectations about the perfection level of buying an essentially “used” home. This is the game you are playing, so don’t hate the player . . . but play the game the best you can by presenting buyers with the best home you can offer them.
Consider Your Choice in Foundation Repair Methods/Contractors
There are different methods of foundation repair available to you, each with its pros and cons. When you are choosing a foundation repair company in this area, you are also choosing a particular method of repair.
Think about the method/contractor that you choose and what that tells buyers about the longevity or quality of the repair you have done. Does the contractor provide a transferable warranty that would give the buyer some peace of mind?
Timing is also a consideration in foundation repair methods . . .
Take into consideration how long the foundation repair will take because that will determine when you can put your home on the market. We do not recommend putting your house on the market during a foundation repair process. Frankly, it’s kinda messy and your home won’t show well during that time.
You need to allow yourself enough time to get it all done and also do any follow-up repairs that come along after the foundation repair, like patching cracks or painting walls.
Anchor Foundation Repair would love to repair every settled foundation in town. But we realize if you are soon to be selling your home, that our technique and timing may not be the best fit for your needs, especially if you are itching to list right now.
Consider Your Effort and Cost to Get the Foundation Repair Done
Ask your agent how the cost of the repair can affect the listing price of the home. Will you be able to “recoup” the cost with a higher listing price?
“There is a delicate balance between putting money into a house and getting that investment back. Versus literally sinking money into the ground and getting no return at all for the legwork of dealing with the repair process,” says Craig. In other words, make sure that it’s worth your out-of-pocket money and time before the sale even happens.
Consider How You Will Feel if the “Repair First” Strategy Doesn’t Work
What happens if the house sits on the market for 6 months anyway? How will you feel if you do the repairs and it doesn’t get you the quick results you are looking for?
Best case scenario: You get a quick sale for an amount that recoups your cost. So the strategy worked and all is well.
Worst case scenario: You are out a chunk of change and the house is still on the market. Are you okay with spending the money even if it doesn’t result in a quick sale? If that’s okay with you, then feel free to move forward. Silver lining: you will have it all taken care of when the right buyer does come along.
Option 3: Offer a foundation repair credit to be used after closing
You know that the repairs need to be done to make buyers feel comfortable, and you really want to provide that for them. Here’s a way that you can pay for it without actually coming up with the money out of your pocket right now.
In the introduction, we mentioned that some people “don’t have a bunch of money lying around” to pay for foundation repair. We get that it’s a large expense and it can be a challenge to come up with the funds all at once to cover repairs. A post-closing credit is a great option in this case.
A Credit is a Less Painful Way to Pay for Foundation Repair
Here’s how it works. As a seller, you can offer either in the listing or during negotiations a repair credit that is paid to the buyer after closing. Meaning that you still pay for part of the repairs, but the money comes out of the sale of the home.
The buyer gets money to pay for the repairs to do them later on after the house closes. You just get less money after the sale because the cost is deducted from your sale proceeds. BUT, you didn’t have to deal with getting the repairs done or pay upfront so it “feels” easier, even though you are still paying.
A Credit Puts the Liability on the Buyer’s Choices, Not Yours
This option also gets you out of any liability in choosing the repair method or contractor. This allows the buyer to choose who THEY want to use and thus they take on the liability of that choice. They can’t blame you for anything that goes wrong now or in the future because they chose the method and contractor.
Heck, they can also choose to do something else with the money, but the bottom line is it’s not your problem anymore.
“I believe that any money a seller puts into a home is a sunk cost. Meaning it’s already accounted for either in you personally doing the work or just discounting the cost so that someone else may have the work completed under their timeline, their terms, and with a contractor of their choosing,” says Craig.
“It’s often wiser to credit the cost of the repairs to the buyers so that you don’t have to deal with getting the repair done OR being responsible for the results,” Craig adds.
Option 4: Negotiate foundation repair terms after inspections
During the process of selling your home, most buyers will do various inspections during the option period to help locate any potential repairs they might ask to get fixed. Inspectors might find things that are or are not indications of foundation problems.
Common inspection choices in this area are a general home inspection, pest inspection, and HVAC inspection. There is no such thing as a “licensed foundation inspector,” usually the general home inspector will note any possible concerns about the foundation but they don’t have any special foundation certification either.
A general home inspection will look over the whole home, including the foundation. Buyers do not typically get a separate foundation inspection during this process unless the general inspector suggests it and the buyer wants to pay for it.
Purpose of Inspections
A home inspector’s job is to identify current problems as well as point out things that are no longer “up to code.” Building codes change over time (typically for the better), but not everything has to be up to code for a home sale to be completed–this is a common misconception. Inspections give the buyer awareness of the current codes and any existing problems.
They can choose to ask for anything to be fixed or not fixed, but they don’t HAVE to ask for anything if they don’t want to. On the flip side of this, buyers should not expect every single thing on an inspection report to be fixed either. That’s simply unrealistic. Buyers must choose what is most important to them and ask for those things first.
Negotiation for Foundation (or any other) Repairs
Should foundation issues come up during a general home inspection, foundation repair terms can be negotiated at that time. This could be a cost-split compromise where the seller contributes to some (but not all) foundation repair costs as part of the sales contract.
You should lean on the expertise of your listing agent for negotiation guidance on what is reasonable to “give” on the seller’s end for repairs.
Remember that real estate transactions are very time-sensitive and you don’t always have time to get every cost detail. But making a reasonable seller’s contribution to the cost of repairs is a great way to get the deal done.
This is similar to offering a credit because the work will get done after the sale on the buyer’s terms, but different because you might only kick in a portion of the cost.
Keep in mind that buyers can walk away during the option period if the seller doesn’t “give enough” towards repairs to make them happy.
Should you do the foundation repair before listing or wait and see?
It’s time to “move on” with selling your home and (the best part) getting yourself a new one. We’ve reviewed the four ways to go on whether to do your foundation repair right away or not. Notice that there are 3 options available to you if you choose to wait, and only one if you do it now. Here are the main takeaways to consider with the direction you take.
Choosing to Do the Foundation Repair Now
Do you have the funds to do it now? If you’ve got the money, you’ve got to also have the time. Giving yourself enough time to get the foundation repair done is your next biggest factor. Depending on the method and contractor you choose, there are significant differences in the time it takes to get things done.
If you haven’t already checked out the article about the different foundation repair methods, now is a good time to take in that information.
If you have the time and have the money to do it before putting the house on the market, choose a contractor and get started with repairing the foundation.
Waiting to See if Foundation Repair is Necessary to Make the Sale
Rolling the dice and waiting to see if the foundation repair has to be done to make the sale gives you three viable options to handle it. This is where the experience and expertise of your Realtor® can help. They know the market, they know what buyers want right now. Our advice is that you listen to their advice.
- If you are perfectly happy pricing the house lower to compensate for the repair, go ahead and list it now.
- If you don’t have the money now, but know your foundation needs work and want to do it, plan to offer a credit for the buyer to do the repair after the sale.
- If you want to wait and see what a buyer will even want (because they might not want anything or be willing to compromise and you won’t have to foot the entire bill), then put that “for sale” sign in your yard and see what happens!
How much time do you have for foundation repair?
If you feel you want to move forward with a repair before putting your home on the market, then we can help with that.
The cost for an on-site inspection from Anchor Foundation Repair is $225. We also have the opportunity to get a free estimate phone call to get a quick verbal price for your repair, but if you want something in writing the In-Home Assessment is the way to go.
To be fully transparent, our process to get a bid or quote is not the fastest available. We tend to have appointments and repair projects already in the pipeline so you would have to wait a bit for both an inspection and getting on the work schedule.
For 35+ years, Anchor Foundation Repair has taken careful time with BCS homeowners to help you make the best decisions for your home. We need time too to get it done right for you. It’s why we put 100% effort into educating our community on foundation repair and offer the longest-lasting method of repair with a lifetime transferable warranty and service agreement.
If you are short on time and already have your home on the market, we suggest checking out some other foundation repair contractors that might be able to serve you more quickly if time is your biggest issue at the moment.