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Seller Didn’t Disclose Foundation Problems: What To Do

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Default Author Icon Written by Angela Bunt Updated 04/24/2024

What happens if you’ve snagged your dream home only to discover the seller didn’t disclose foundation problems? Some homeowners hide foundation issues, such as hairline cracks or bowed walls, to maintain their property’s value or speed up a sale. They might downplay the problems or omit them from their disclosure altogether.

Our guide explains what to do if you discover foundation problems at any point in the home-buying process.

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Foundation crack repair costs between $250 and $800.

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Should Sellers Disclose Foundation Problems?

Sellers are generally expected to disclose foundation problems, as these can impact the property’s value and safety. Real estate transactions almost always include a seller disclosure form where they should list known home defects, including foundation problems.

In many states, home sellers and their realtors have a legal obligation to disclose foundation problems. However, the specific requirements vary by state.

We recommend researching your state’s seller disclosure laws before you start the home-buying process so you know your rights and responsibilities as a homebuyer. You can find this information on your state’s real estate commission website.

Of course, doing your due diligence as a buyer is also important. Even if the seller provides a disclosure, you shouldn’t take their claims at face value. Hire a home inspector or structural engineer to assess the property—especially the foundation. Sellers who intentionally conceal known foundation problems could face legal consequences.

When we asked a team of experts about red flags when buying a house, their first piece of advice was not to waive a professional home inspection. Check out the video below to learn more about what the experts look for and what they consider dealbreakers:


Major Foundation Issues That May Impact a Sale

Major foundation issues can significantly impact the safety and resale value of a home. They can also make it difficult to get homeowners insurance or secure a mortgage. If you have any concerns, we recommend hiring a structural engineer to inspect the foundation instead of relying solely on a home inspector and the seller’s disclosure statement. Here’s what a structural engineer will look for:

Signs of previous repair: A structural engineer may recognize signs that the foundation previously underwent repairs or experienced extensive damage in the past, which could be a red flag.
Foundation sinking or upheaval: The foundation sinking or heaving upward due to changes in the soil may cause some foundation cracks.
Stress cracks: Long cracks on foundation walls—particularly wide or expanding cracks—could indicate that pressure from the soil or water is pushing the foundation inward and compromising its structural integrity. Horizontal cracks are often the most concerning, but stress cracks can also be vertical or diagonal.
Misaligned doors and windows: Doors and windows that do not open and close properly could be signs of a shifting foundation. Gaps between the wall and the floor or ceiling can also suggest foundation movement.
Water damage or drainage issues: Water stains, mold, mildew, musty odors, peeling paint, rusty metal, and wood rot could all indicate serious moisture issues. These issues may be most evident in the basement or crawl space of the home.

If the structural engineer finds serious problems during their during their foundation inspection, you may need to reconsider purchasing the home or postpone closing until the seller has repaired the issues.


Minor Foundation Issues That May Not Impact a Sale

Every home will show signs of wear and tear over time, so minor foundation issues may not be a dealbreaker. Here are some examples:

All houses will settle over time, and building materials may expand and contract. As long as the change is minor and uniform, it may be harmless.

Not all foundation cracks are cause for concern. Thin cracks may be more of a cosmetic problem with a simple fix rather than signs of a major structural issue.

Although it’s a good idea to address any moisture issues to keep them from escalating and causing serious water damage, small leaks may not require immediate repair.

Slightly uneven flooring could point to normal settling or poor installation rather than a serious foundation problem. Fixing cracks in concrete or tile could be a simple cosmetic repair.

Hiring a structural engineer is the safest way to determine the severity of a problem and the urgency of addressing it. Some foundation issues that do not require immediate repair could escalate over time, so it’s important to monitor any issues and address them if they worsen.


Can I Buy a House That Needs Foundation Repair?

You can buy a home that needs foundation repair, but that decision comes with certain risks and challenges. The most obvious drawback is the potential cost of foundation repairs. Many repairs only cost about $2,000–$7,500*, but major issues could easily cost $15,000–$25,000 or more to fix.

Foundation problems can be expensive to repair and cause collateral damage, such as misaligned doors and water damage. Research how to repair foundation cracks or any other relevant issue and decide whether this house is worth the extra trouble.

QUICK Tip
If you have your heart set on a property with foundation issues, it’s wise to obtain multiple repair estimates and negotiate the sale price down as needed. An experienced real estate agent and mortgage broker can guide you through the process.

When it comes to getting a mortgage, lenders may be wary of offering financing for homes with significant structural problems. A When it comes to getting a mortgage, lenders may be wary of offering financing for homes with significant structural problems. A home inspection and appraisal are standard parts of the mortgage approval process, and severe foundation issues can reduce the property’s value. If the lender deems the property a high risk, they may charge higher interest rates, impose more stringent loan terms, or deny the loan altogether. and appraisal are standard parts of the mortgage approval process, and severe foundation issues can reduce the property’s value. If the lender deems the property a high risk, they may charge higher interest rates, impose more stringent loan terms, or deny the loan altogether.

*Cost data sourced from contractor estimates used by Angi.


What To Do if You Discover Foundation Problems

Whether you’re still in the buying phase or have already settled into your new home, discovering foundation problems can be unsettling. Here’s what to do in each scenario:

If You Haven’t Purchased the Home Yet

If you, your realtor, or your home inspector spot foundation problems before you seal the deal, your first step should be to hire a structural engineer. You need a detailed assessment of the problem, recommended repairs, estimated cost, and potential foundation repair costs.

You should also check local and state guidelines on seller disclosures to understand your rights and leverage. Some states have strong protections for homebuyers that require the seller to disclose any material defects. In that case, now that the seller knows about the issue, they would have to disclose it to any future potential buyers.

If the foundation problems are extensive and the seller is unwilling to negotiate, it may be in your best interest to walk away.

QUICK Tip
While your realtor can offer general guidance and support, they aren’t qualified to diagnose foundation problems. It’s important to hire a structural engineer rather than relying solely on the advice of a realtor or general home inspector.

If You Already Own the Home

If foundation issues arise after your home purchase, don’t panic. Start by consulting a structural engineer to determine the severity of the problem and the best remedy. Once you have a clearer picture of the situation, explore your home warranty or homeowners insurance policy to see if they will cover the repairs. If you need to pay for repairs out-of-pocket, explore financing such as a home equity line of credit or a renovation loan.

If you suspect the previous owner knew about the problems but did not disclose them, consult a real estate attorney for legal advice. You may be able to sue the seller for breach of contract or their realtor for misrepresentation due to undisclosed defects. A law firm specializing in tort claims can explain any relevant laws and help you seek legal recourse if possible.

Remember that foundation issues often go hand-in-hand with other problems, such as plumbing leaks or water damage. Raising these issues early on will help prevent further complications and protect your investment.


Steps to follow

Dealing with a major foundation problem as a new homeowner can be daunting, but you should be methodical. Here’s what to do:

Keep a meticulous record of all noticeable foundation issues, including photographs, notes, and any professional assessments or quotes you receive. Review any disclaimers or seller disclosures from your home purchase to verify that the seller did not disclose the foundation issue.

Before jumping to conclusions, get a professional opinion regarding the extent of the problem and whether it’s a preexisting issue or a recent development.

Look for signs that the sellers may have deliberately concealed the problem. Examples include fresh paint over cracks, strategically placed decor, recently moved furniture, or conversations with neighbors.

Before taking any drastic steps, reach out to the seller or their real estate broker. Express your concerns, provide evidence, and seek a resolution. They might be unaware of the problem or willing to contribute to repair costs.

If amicable communication doesn’t yield results, consider seeking legal advice. A real estate attorney can help you identify the responsible party, possible legal remedies, and the likelihood of success given nondisclosure laws and the statute of limitations in your state.

Before filing a lawsuit, work with your attorney to send a formal demand letter that outlines the issue, the evidence, and your expectations. This step shows your seriousness and may prompt the seller to offer compensation or repairs.

Remember that while legal avenues are available, they should be a last resort. Open communication, detailed evidence, and professional counsel are key.


Our Conclusion

Undisclosed foundation problems can be distressing, especially for first-time homebuyers. However, not all cracks and moisture problems spell certain disaster. The seller may be willing to fix minor foundation issues prior to closing or negotiate a lower price. For issues discovered after the home sale has been finalized, we recommend hiring a structural engineer and consulting an experienced real estate attorney to explore your options.

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FAQ About Undisclosed Foundation Problems

When should you walk away from a house with foundation issues?

You should walk away from a house with foundation issues if the seller is not willing to adjust the price or cover repair costs. You might also walk away if you have a tight budget or timeline for your move.

What happens when a seller fails to disclose?

When a seller fails to disclose known defects in a property, the buyer might have grounds to sue the seller for misrepresentation or breach of contract. The specific legal remedies will vary by state but could include financial compensation for repairs, the ability to cancel the sale, or, in some cases, even punitive damages.

Why would the seller not disclose a foundation problem?

The seller might not disclose a foundation problem to avoid repair costs, speed up the sale, or inflate their property value. They might also misunderstand the terms of an “as-is” sale or be unaware of the problem.

What is the cost of foundation repair?

The cost of foundation repair ranges from $500* for small cracks to $15,000 or more for major repairs. Most homeowners pay $2,175–$7,830.

* Cost data sourced from Angi.

What happens if you buy a house and there is something wrong with it?

If you buy a house and discover something wrong with it, your options depend on the severity of the problem and your state’s seller disclosure laws. You might be able to negotiate repairs with the seller, pursue legal action if they intentionally hid defects, or have to cover the repair costs yourself.

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