I get calls like this all the time, the part that is difficult to convey to most perspective homeowners is that not all imperfections are signs that the wall is in a state of failure. The only way to answer the question is a wall in failure is to monitor the wall, and monitoring takes time. Now every perspective home buyer just shuddered, but its true. Below are some questions you can ask that will give you a better idea if the retaining wall will be an issue in the future.
First, ask how old the retaining wall is. If it is relatively new and is showing large cracks, or seems to have visibly moved that is a bad sign.
Second, ask how long the crack or imperfection has been present and if there has been any change. If the problems are new but the structure is not, that may be a sign that the wall is moving.
Third, get a retaining wall contractor (not a landscaper) to give you an estimate. They may charge since you a consulting fee because you don't already own the house, its worth it. Most retaining wall contractors will be able to look at a wall and identify the factors that are leading to the issue, and its not always a big deal. If the wall is in a high risk category a reputable retaining wall contractor can give you a realistic look at how much the project could cost.
Its important to note that if you buy a home that has a wall that will need to be monitored you will need to higher a qualified engineer, your retaining wall contractor can make a good recommendation. You might be asking why not just contact the engineer from the beginning? The answer is simple, engineers are only responsible for the design process and typically lack a working knowledge of the cost associated with the repair.... more
Like everyone has said...speak to your lender. I know when I work with FHA clients, the inspection is thorough and usually surprising what they get stuck up on. For example, similar situation...we had a contract on a house with cracks (minor) in the sidewalk and we had to object and make the seller fix them prior to loan approval. Good Luck!!... more