Is That Bowed Foundation Wall Historical or Active?
“This side appears to be brown.”
–What a CPA will answer if you point to a horse in a pasture and ask what color it is.
“The house’s foundation does not appear to be at imminent risk of failing . . . today.”
–Structural engineer’s analysis of a home foundation issue.
As a listing agent counseling homeowners how to complete their Seller Disclosure, I recommend this 3-step approach:
One. Describe any issue(s) that occurred (“ice dam above Dining Room caused damage to ceiling in February, 2007”);
Two. Tell prospective Buyers what they did to correct the problem (“licensed contractor repaired ceiling damage, added insulation to attic, and installed heating cables on roof over affected area”).
Depending on the issue and what the Seller did, it may even be appropriate to tout the fix as an improvement.
Three. Assuming it’s true, say that there have been no further problems.
Done!
As a Buyer’s agent, you’d certainly want your client’s home inspector to eyeball the now-fixed problem, but that should be the end of it — especially when the issue was decades ago.
Better Than New; “Trust But Verify”
Now, consider the other end of the continuum: a home issue that’s active (vs. historical); potentially (very) big bucks; that the Seller has yet to fix or even address.
Exhibit A: a bulging foundation wall in a Minneapolis home I showed clients last week.
According to the Seller, the problem in the 95 year-old home just developed in the last year.
While the Seller disclosed the issue, which is proper, it leaves unanswered such questions as: “How much will it cost to fix, and who’s going to pay for it?” “What caused the problem, and are there other areas at risk?,” and “Will the lender require the problem to be fixed before it will give the Buyer a mortgage?”
While it’s certainly possible to wade through and ultimately resolve all those issues, for most Buyers — especially first-timers — such a big question mark so early in the process is usually grounds to keep looking . . .
P.S.: In my experience, structural engineers are not the appropriate expert to consult for foundation issues, both because they’re expensive (up to $1,000 for an opinion), and because they give very limited assurance.
Rather, it’s better to get estimates from licensed foundation contractors, who’ll actually do the repair(s).
See also, “The TOO Clean Seller’s Disclosure“; “The Most Important Question on Seller’s Disclosure“; and “The Too-Conscientious Minnesota Home Seller.”
