Home Buying in Los Angeles>Question Details

Jm, Home Buyer in Los Angeles, CA

How do cracks in the foundation affect resale value on a home? Your opinion please.

Asked by Jm, Los Angeles, CA Sat Dec 6, 2008

I just did a physical inspection on a home today (I am the buyer) and the inspector found some cracks in the foundation that concerned him. He said that almost all older houses he has inspected have some cracks, but if they are smaller than 1/4 inch, they are not a big deal. Since he found 3 cracks that were bigger than this, he recommends getting a foundation specialist. If the seller agrees to repair the cracks in the foundation, should I go ahead with the purchase? To what degree will cracks that have been repaired affect the resale value when I sell the home later? Your opinions are appreciated.
Some info on the home: It is located in the 90035 zip code (Crescent Heights and Pico area), purchase price is $600k, 3 bedroom 1.5 bathroom, the house is not on a hill and the inspector suspects that the cracks were caused by improper drainage,

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Answers

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Jim,

Foundation issues can definitely be a part of purchasing any home and in particular an older home. There are many different reasons cracks can happen and only a foundation specialist and/or civil engineer can advise you best on how serious, if at all, this particular issue is for the structural integrity of the home.

Purchasing a home that has foundation issues that are not repaired simply means taking on the previous owners issue as your own, as they will affect the value of the home. It is best to get this resolved before the purchase. If the seller is willing to accept responsibility for the repairs (they should be as not it will be a disclosed item on any marketing of the house going forward) then it is possible to work it out. Your agent should help negotiate an inspector that both you and the seller can agree on or hire both and compare/negotiate the results.

My word of realistic caution is that I am constantly amazed at the difference in outcomes between different inspections. I have seen the same problem estimated for repair at 9K,12K,18K, and 30K. To be reasonable, your expectations should be driven by "structural integrity". In other words, it is probably not reasonable to expect a brand new foundation built to 2008 standards. With that said, the cause of the issue should be addressed because many times it is improper drainage around the home. Fixing certain cracks may not matter as new cracks may appear in another area as a result of ignored drainage issues.

Hopefully, if you really want the home, you can negotiate with the seller to split the cost of the inspection and make the appropriate repairs or offer a credit so that you can do the work after the sale is closed. If the issues are too extensive or the seller is not willing to correct to meet the structurally sound criteria/install proper drainage, you simply are taking on the problem yourself as it will not go away.

I have seen cases where buyers spent $1000 obtaining foundation inspections to have the seller say, "no". The buyer's walked but had invested $1000 into the discovery. With so much inventory, it must be a house you feel deserves the investment in discovery.

Your agent should be able to give you names of foundation inspectors and make sure to look them up on the better business bureau and ask for references.

Good luck,
CJ
Web Reference: http://www.TalkToCJ.com
1 vote Thank Flag Link Sat Dec 6, 2008
Hi Jm,

Tough question, and you probably won't like my answer.

If the cracks give you pause, they will probably give other potential buyers pause as well. The degree to which they affect the homes value can only be ascertained when a buyer walks through the home and makes an offer. There's no set percentage or rule for it.

Cracks that have been repaired are usually seen as a better sign than cracks that have NOT been repaired, but no cracks at all is even better than that...

I'd want to know how the cracks were repaired...did someone just throw some quik-crete in there and that's it? or did they fix the underlying problem that potentially caused the cracks to begin with (drainage issue)? (big difference both in cost and longevity of the repair).

If I were in your shoes I would probably have a foundation specialist come in and assess the situation - get an estimate for repair, and ask for the credit to do the repairs yourself (that way you know it's done right by a person you trust, rather than by a seller who just wants to unload a house)...

Talk with your agent and get their thoughts on it...but that's my .02.

Hope it was helpful!

Thanks,

Josh
1 vote Thank Flag Link Sat Dec 6, 2008
I would highly recommend working with a foundation specialist as cracks in the foundation effect the structural integrity of the property.
If given the choice between two homes..one with the cracks...one without...I would go with the home without the cracks. In today's market with the number of homes available, put your money on the best property you can afford and walk away from things that will cost unknown dollars in repairs.
0 votes Thank Flag Link Wed Dec 10, 2008
Again, thanks for all of the help. What I really am interested in knowing is people's opinion on how foundation cracks of this nature might affect the resale value of the home later on. I know the answer to this question relies on many different factors, but I would really appreciate any opinions. For example, does this sound like a problem that should make me "run in the other direction?" Or, is this something that is fairly common in Los Angeles homes?
0 votes Thank Flag Link Sun Dec 7, 2008
Jm,
You are on you way to finding the right answer by doing what youe inspector has recommended. The process is working as it is intended.

The most reliable information will come from the second inspection by the specialist. Be sure to get a report "in writing." This should clarify your best course of action.

Good luck
The Eckler team
0 votes Thank Flag Link Sun Dec 7, 2008
The inspector is right, you need a foundation specialist to have a look before you can determine what the property needs. S/he will probably give you more than one option for repairing the property. The most expensive will usually turn out to be the best/most longest lasting/secure, but sometimes the medium option is adequate. The specialist will let you know. You might even consider getting 2 or 3 opinions. If the damage was caused or enhanced by poor drainage, you will want to get an estimate on correcting that as well. Sometimes foundation people will also do french drains, grading, or other corrections on the outside before the water gets to the foundation. Sometimes they will subcontract the work out; sometimes you will need two companies - one for foundation repair and one for drainage correction.

Ask your realtor for 3 or 4 names of companies/people who do that type of work. Get at least 2 estimates; 3 is better. Once you have the numbers, you and your realtor can discuss the pros and cons of asking for the seller to resolve the problem vs making a price adjustment. Or finding a different property. Depends on the findings.
Web Reference: http://www.MariaTMorton.com
0 votes Thank Flag Link Sat Dec 6, 2008
Thanks for the responses so far! There is a lot to think about. I also want to mention that the inspector said one of the cripple walls needs to be completely replaced. He mentioned that the cracks would probably have to be fixed by using steel plates (I think) or building a "sister foundation."
0 votes Thank Flag Link Sat Dec 6, 2008
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