Condition Rating And Economic Life For A House With Foundation Damage

[The Bob]

I sold a house that had this same condition, actually worse as the bowing was across one whole wall of the basement. The remedy was to place some vertical steel I beams along the wall, tied into the framing. This was back in the late '80's and the cost was like $3500. It was found after the contract, and was treated as cost to cure which the seller ate.

We have a lot of "shrink-swell'' soil in my area, so this is not an uncommon condition. In most cases, the impact on value is close to the cost to cure. As someone who has flipped some houses, I'm not really concerned with WHAT is wrong, but how much it will cost to cure. From what you describe, an investor/flipper is the most likely buyer and I think most investors would treat this as a cost to cure.

One other thing I would mention, in my area most investors are looking to be all in at around 70-75% of the ARV. Try to find some current renovated comparables and work backwards and see what kind of number you get there. So say the ARV is $200,000 and it will cost $60,000 in repairs: .75 x 200,000= $150,000-$60,000= $90,000 for acquisition.

 

[residentialguy]

One other thing I would mention, in my area most investors are looking to be all in at around 70-75% of the ARV. Try to find some current renovated comparables and work backwards and see what kind of number you get there. So say the ARV is $200,000 and it will cost $60,000 in repairs: .75 x 200,000= $150,000-$60,000= $90,000 for acquisition.

Problem is that you don't know how bad that foundation is based upon a cursory visual inspection from walking about the house...esp by a non professional. Leave the cost to cure to the professional....or find yourself in court paying for your opinion.

 

[Mr Rex]

There is a cost to cure estimate in the OP.

 

[Deleted member 130081]

There is a cost to cure estimate in the OP.

Yes. I personally would be interested to see that bid. If the damage is only over a span of 10 linear feet as the OP/appraiser states, the $25k is a rip-off bid (assuming it’s not on the side of the mountain or something - OP is from CO). Basement repair is full of rip-off artists. Everything from selling services that don't exist to over-selling small problems. WI has an entire section of law just for them, though it still only offers very limited protections against these guys. Best to get at least three opinions/bids for this stuff.

 

[glenn walker]

I give up LOL

 

[glenn walker]

Like many appraisal issues this can also be geographically specific to a State or area - In California we have few basements and indications of walls bowing and in some cases just settlement BUT we have seen others where once the engineer came out and physically inspected the property found the property was sliding-previous earthquake damage had never been m mitigated and one where the concrete foundation was split in half by about 2 inches wide but could only bee seen after the flooring had been pulled up - That particular property required regrading the property and extensive foundation issues at $70,000 plus dollars.

Personally I do not believe an-appraiser is qualified to make any determination in cost because until someone physically gets in there who is also knowledgeable the appraiser is doing nothing but an-uneducated guess. If the rest of the home was say in average condition then it could be a C-4 SUBJECT to inspection and repair by a licensed civil engineer and contractor -- but lets say that uninformed buyer closes escrow based on some appraisers $7,000 estimate and later on finds out it's $30,000- Think the appraiser has created a lot of unnecessary liability especially when it's so easy just to check the repair-inspection box and make it subject to being mitigated.

 

[residentialguy]

Like many appraisal issues this can also be geographically specific to a State or area - In California we have few basements and indications of walls bowing and in some cases just settlement BUT we have seen others where once the engineer came out and physically inspected the property found the property was sliding-previous earthquake damage had never been m mitigated and one where the concrete foundation was split in half by about 2 inches wide but could only bee seen after the flooring had been pulled up - That particular property required regrading the property and extensive foundation issues at $70,000 plus dollars.

Personally I do not believe an-appraiser is qualified to make any determination in cost because until someone physically gets in there who is also knowledgeable the appraiser is doing nothing but an-uneducated guess. If the rest of the home was say in average condition then it could be a C-4 SUBJECT to inspection and repair by a licensed civil engineer and contractor -- but lets say that uninformed buyer closes escrow based on some appraisers $7,000 estimate and later on finds out it's $30,000- Think the appraiser has created a lot of unnecessary liability especially when it's so easy just to check the repair-inspection box and make it subject to being mitigated.

This post has a familiar logical ring to it

 

[Laughing Heir]

I just worked on a project where the foundation of a newer dwelling failed in several spots. The attorneys provided cost estimates from engineering firms and contractors ... I was blown away by the scope of this problem! The most reasonable estimate was in the ballpark of ~90K for the excavation, grading, footer, and foundation. Yikes.

 

[jay trotta]

Foundation repair is perhaps the most expensive (depending on the work required) as it is the basis of the structure. You can get someone to do a half hearted job or one who knows what they are doing; IE: less expensive = not the best work / more expensive = greater quality (generally speaking). Sort of like appraising, you get what you pay for.
At any rate the expert in the field of repair, may also be required to carry insurance for the work they provide (it depends on your state law); bottom line, it can't be an "As Is" appraisal.
Good Luck

 

[Mike Kennedy]

There are profitable assignments with far less liability out there - bill for inspection and walk away ( cite all pertinent data and the reason for withdrawal in client to letter and work file < retain it 5 yrs)