Selling a House With Foundation Issues? Here's What to Know
Posted by Justin Havre Real Estate Team on Monday, July 8th, 2024 at 11:49am.

How do you sell a house with foundation issues? The first step is to be aware that they could be present. Homeowners do not need a surprise expense when a buyer is ready to go to contract. When you’re preparing to sell your home, set aside additional funds for unexpected repairs and understand the clauses that may apply to home mortgages and real estate contracts in Canada.
Knowledge will set you up for success, so here’s what to know about selling a house with foundation problems and how to spot foundation issues before they interfere with your home sale.
Can You Sell a House With Foundation Issues?
If you’re in a time crunch to sell and are worried this is the end of the line, don’t be—you can sell a house with foundation problems. It’s just going to be more difficult, and you’ll likely have to compromise on the price.
A cracked or damaged foundation is not going to go unnoticed during a home inspection. Paying for foundation repair is a significant expense, and prospective buyers are unlikely to want a home requiring such attention. Buyers may request a considerable price reduction or require the seller to repair the foundation as a condition of the sale.
Will a Bank Finance a House With Foundation Problems?
Sometimes a buyer would be perfectly willing to take on a home with a cracked foundation—if they could secure financing for it. Depending on the extent of the foundation problems, a buyer may be unable to secure a loan for the property. To the lender, a house with foundation issues is a potential liability if the buyer defaults and the lender has to foreclose and sell the property to recoup the cost.
Since most home sales are contingent on financing, having a home that lenders are unwilling to finance will drastically shrink your potential buyer pool. If you simply can’t get repairs done for one reason or another, consider marketing toward cash buyers willing to buy homes in “as-is” condition. Another option is to consider seller financing.
If your house has any visible signs of foundation problems, consider hiring a structural engineer for a professional evaluation. If you can verify the home’s structural stability and that the foundation damage is minor, lenders will be more willing to offer financing.
Even so, mortgage lenders may require the foundation issue to be addressed before approving a home loan. This often forces the seller to pay for necessary repairs to sell a home.
Common Signs of Foundation Problems

Sellers looking to get maximum value for a home may want to make repairs before bringing a home to market. Homeowners can look for tell-tale signs of a foundation problem, such as:
- Bowed walls
- Uneven, bouncing, or sagging floors
- Doors or windows sticking
- Gaps between the ceiling and crown moulding
- Mildew smell in the basement
- Cracks in walls, especially horizontal or in a zigzag pattern
- Warped or cracked siding
- Water pooling around a sinking foundation
- Cracked or leaning chimney
Note areas of concern and look into the cost of repairs before deciding to sell a house with foundation problems. When a home goes to market, a seller will generally have to either pay for the repair or reduce the asking price. A pre-sale home inspection can go a long way toward helping you decide your selling strategy.
Is It Safe to Live in a House With Foundation Problems?
Damage to the foundation does not necessarily make a home uninhabitable. Many owners go years without even realizing that such a problem exists. However, even if there usually isn’t an immediate safety concern, foundation issues will get worse over time if left unaddressed. The longer a damaged foundation goes unrepaired, the higher the risk gets.
In addition, not every sign of foundation problems is actually caused by the foundation. Cracks may be caused by reasons including concrete shrinkage, settlement, or lateral pressure on a wall. Interior walls, especially, gain cracks for a variety of reasons.
A crack in the basement wall or floor is a reason for an owner to contact a foundation specialist. There are variations in the types of cracks that can appear which a trained professional can use to identify different issues. In general, the bigger the crack, the more expensive the repair.
It’s vital for owners or potential sellers to address any unusual cracks they find before they become a more significant issue. Sellers would do well to speak with a real estate agent to discuss how much they stand to lose on their asking price if they let a problem in the foundation go unaddressed.
How to Fix Foundation Problems
In many cases, the smart choice is to have your damaged foundation repaired before you try to sell the home. This is not a DIY job, but instead, one that requires professional expertise. Contact at least two or three local companies that specialize in foundation repairs and get an estimate for the job. However, rather than just looking at the bottom line cost, make sure you're comparing apples to apples in terms of what work will be completed. In addition, check out the reviews and testimonials of former clients to help you determine which company is the best one for the job.
In some cases, you may need other repairs on the home that could be completed at the same time, saving you time and money. While the upfront cost can be a bit overwhelming, the result is a more structurally sound home that is likely to be easier to sell and at a higher asking price.
How to Prevent Foundation Issues

An ounce of prevention is worth a pound of cure, and you could save thousands of dollars if you’re familiar with the common causes of foundation issues.
Water Pooling Near Your Foundation
Water damage is the primary cause of foundation damage, as it can exert pressure on the foundation, cause soil to expand and shift, and cause foundation settlement through erosion. It also promotes mould and mildew, which can affect structural integrity. Causes of water damage may include:
- Clogged gutters
- Improper landscape grading
- Leaking plumbing
To prevent water damage, make sure the ground around your house slopes away from the foundation and the gutters are always clear to direct water away. If water tends to accumulate in the basement, install a sump pump and ensure there’s proper ventilation to prevent humidity.
Shifting Soil
When expansive soil becomes too saturated with water, it pushes upward on the foundation, causing sloping floors and cracks in walls and ceilings.
Ironically, too-dry soil can also cause damage. If you live in an area with expansive soil like clay, watering the ground around your home during dry spells may be necessary to prevent the soil from shrinking and causing your foundation to settle unevenly.
If the soil is eroded away by improper drainage, it can create empty voids beneath your foundation. This lack of support is dangerous and can quickly cause damage; severe erosion can even cause sinkholes. If you spot tilting trees or poles, soft spongy spots in your yard, or indents and sunken areas, call an expert as soon as possible.
Tree or Shrub Roots
The roots themselves can disrupt soil, exert pressure around the foundation, and cause soil to shift by absorbing water. They can also interfere with plumbing pipes, leading to water damage.
Buyers Will Notice; Don’t Delay Foundation Repairs
As many Canadian buyers have an informal viewing checklist, they are on the lookout for potential red flags and additional repair costs during a walk-through. Foundation problems are one of the most common buyer red flags on such checklists.
During an open house, buyers may be interested in roofing materials, working carbon monoxide and smoke detectors, cracks in the exterior of the foundation, as well as other observable conditions of the interior and exterior of the home. Clauses are included in the Canadian real estate contract negotiation, and there simply may not be enough time to make a repair to the foundation when a home is in contract.
Speak with a real estate agent to discuss the options available when it comes to making a significant repair to a home before going to market or after an inspection and how the timing of a repair may potentially affect home value and asking price.