Foundation Repairs and Selling Your Home in Texas

If you own a home in North Texas, there’s a good chance it has had foundation work, or will someday. Buyers know this too, and the word “foundation” makes most of them nervous. A past repair doesn’t have to scare a buyer off, but how you handle it can make or break your sale.

Why foundations move here

Much of the Dallas-Fort Worth area sits on expansive clay soil. It swells when it’s wet and shrinks during drought, and your slab moves with it. Some movement is normal. The real question is how much, and whether it was repaired properly.

A past repair isn’t a red flag by itself

A foundation that was repaired the right way, with an engineer involved and a warranty in place, can actually reassure a buyer. What worries buyers is the unknown: cracks with no explanation, doors that stick, and a seller who can’t say what was done or when.

The paperwork that matters

If your home has had foundation work, gather these before you list:

• The engineer’s report that recommended the repair, and ideally a follow-up letter from the engineer confirming the work was done as specified.
• The repair invoice showing what was done, how many piers were installed, and where.
• The warranty, including whether it transfers to a new owner.
• The permit, if your city required one. You can usually check a property’s permit history through your city’s online permit search or by calling its building department.
• Plumbing tests. A leak under the slab, in either the drain lines or the water supply lines, can cause foundation movement, and lifting a slab during repair can crack a pipe. Testing both before and after the repair shows a buyer that the plumbing was checked: a hydrostatic test for the drain lines and a pressure test for the water supply lines.

A buyer who sees a complete file sees a problem that was handled. A buyer who sees nothing starts imagining the worst.

Transferable warranties

Many foundation repair warranties transfer to the next owner, but read yours carefully. Some charge a transfer fee or require paperwork to be filed within a certain time after closing. Many also have conditions, such as keeping up with drainage and fixing plumbing leaks, that can void the coverage if they’re ignored. Call the company that did the work and ask exactly what a transfer requires.

Repair before listing, or disclose and price it?

If your foundation needs work now, you have two basic choices. You can make the repair before you list and hand the buyer a finished file, or you can get an engineer’s report and price the home with the repair in mind. Either way, you have to disclose it. Repairing first usually gives buyers more confidence. Pricing for the repair can make sense when time or cash is short.

Repairing before you list also keeps you in control. You choose the engineer, the repair company, and how the work is done. Once the house is under contract, the buyer has a say too, and they may want their own engineer, a different repair plan, or a company you wouldn’t have picked.

If you decide to sell without making the repair, be aware of what that does to your buyer pool. A home with unrepaired foundation problems appeals to far fewer buyers, and many lenders won’t finance it with a traditional loan until the repair is made. That can leave you with mostly cash buyers and investors, who expect a deep discount. In my experience, investors usually want at least 25% off, plus the estimated cost of the repair.

One situation calls for waiting. If you’re in a dispute with a builder or contractor over who is responsible for the repair, it’s usually best to hold off on listing until that dispute is settled.

Never hide it

Texas sellers have to disclose foundation problems and past repairs on the Seller’s Disclosure Notice, even if the problem seems fixed.

Some sellers assume that if the house is still under a builder’s warranty, any problem becomes the next owner’s to sort out with the builder. It doesn’t work that way. A warranty that transfers to the next owner doesn’t change what the seller knows, and what the seller knows has to be disclosed. An agent who knows about a defect has to disclose it too, so a good agent won’t list a home with a known problem the seller wants kept quiet.

Another trap: you can’t argue one thing with the builder and tell the buyer another. If you’ve told the builder the foundation has a serious defect, you can’t turn around, take the builder’s side, and tell a buyer it just needs some drainage work. Letters, engineering reports, and complaints from a dispute have a way of coming out later, and a buyer who learns you told the builder one story and them another has good reason to believe they were misled.

As I said in my article on seller’s disclosures, when in doubt, disclose. With foundations, there really isn’t any doubt.

If you have questions about selling a home that has had foundation work, I’m happy to help.

I’m not an attorney or an engineer, and this isn’t legal or engineering advice. For a specific situation, talk with a structural engineer and, if there’s a dispute, a real estate attorney.