Example: at 2.5% price appreciation/year, you can expect your duplex to appreciate by about $21,000 in 5 years. Factor in 7% frictional costs in sales and that leaves you with an additional $19,500 in your pocket (not counting taxes). If the duplex needs a new foundation at that time, you can expect to deduct the sales price by an equivalent amount of the repair.
What is that risk worth to you? Put a value on it and ask the foundation company to pay you for it. Of course, if the foundation company is not in business in 5 years, all this is moot anyway. I don't need names, but who did you hire? The cheapest guy or a company with a track record of excellence and sustainability? I learned years ago that you get what you pay for.
Good luck, ma'am.
Agents For Change Real Estate
This area of the country has been in a sustained drought and that is projected to continue. That has caused a lot of settling around the outside perimeter of foundations as the ground dries out. The ground further away from the edge dries slower and that 's why you get the differential movement and settling of the foundations. However, movement can also be compounded by the type of soil under the foundation. Some areas have highly expansive clay that will move up and down a lot with moisture changes and cause movement in the structure.
You should have an independent engineer evaluate the type of repair. You will need to know if the foundation company just propped up the settled portions or if they actually put in supports to bearing so that movement will be minimized. There are temporary repairs and permanent ones that cost more. If the repairs done or temporary type, then keep the warranty. You may also consider spending the money to have it fixed right if it's not. An experienced structural engineer can tell you that.
Typically a seller will either need to have the foundation repaired or deduct the cost to do so from the selling price.
I have had a lot of experience with these issues. My degree is in Architecture Engineering from U.T Austin. My husband & partner have an Architecture, Engineering firm as well as a Real Estate Brokerage.
I will be interested to know what you decide.
Claire McIntyre, Architect / Real Estate Broker / Builder
512 699 9912
MMI McIntyre Associates
Real Estate Brokerage
McIntyre & McIntyre Inc
Architecture / Engineering
My thought is if the foundation company wants to buy you out of the "lifetime" warranty, they know it will cost more to fix the foundation in the future than their buy-out offer. A "lifetime" warranty is extremely valuable in terms of future resale value IF the foundation company is reputable and still in business when you sell.
It's hard to put a number on warranty value. I suggest you contact a structural engineer (not associated with company/existing warranty.) Based on engineer's opinion, have another foundation companiy bid required work and see if (other) company will provide warranty..
Don't give up your warranty without professional consultation!
Honestly, I've never encountered this type of scenario before. Depending on the scope of the current repairs (and I would definitely get another company to evaluate the foundation), I might let them buy me out for a pretty penny and then ABSOLUTELY go with another company for this specific repair (if indeed you need one at this point in time). But the situation you describe just seems shady and weird to me.
Before you do/sign anything with this particular company, I would strongly advise you to get a structural engineer from a well-reputed foundation company to come and evaluate the situation. It would cost you little (and, if you play your cards right, possibly nothing), and it could really save you some headaches and losses down the road. You might also ask the engineer that the company sends out what they think of such a request.
As far as how much not having a warranty will affect sales price: there are so many variables, so this is difficult/impossible to answer without more information. Parts of Austin, for example, are really reputed for foundation issues (i.e. the east side). Many buyers in these areas are usually prepared to put up with a little shifting. BUT if the foundation has shifted significantly, it becomes difficult (if not impossible) for a potential buyer to get a mortgage until it is fixed. This could seriously hinder you on re-sale and will certainly scare away some buyers.
Generally, a life-time warranty certainly reassures buyers and adds value, so it's always better to have one. That said, the lack of one does not (in the Austin market, anyway) necessarily kill the deal and/or mean you have to take a hit. However, it really all depends on the current state of the foundation, the state of the house, and the area you are in.
I notice from your profile that you are from/in Dallas? If the house is in fact in Dallas (and not Austin), then I would definitely ask some local agents there what their experience with selling houses with "imperfect" foundations is. Foundation issues play out differently in different cities and areas.
Good luck with this, and my condolences for having to deal with such a stressful situation.
Karen Pagani, Ph.D., Realtor
The Gill Agency