About
unexpected foundation concerns!
Summary
Our clients found a house they loved. The Atlasa team went through our full offer preparation process:
Full due diligence of the home, including reviewing disclosures, liquefaction research, permit diligence for any repairs and upgrades on the property, and estimation of costs to upgrade the home (if needed).
Completed a thorough comparative analysis on the property.
Reviewed the comparative analysis and due diligence with the clients, and determined a strategic offer price, and drafted their offer.
Our team revisited property to re-inspect foundation prior to offer submittal. We found concerns with moisture in the foundation that lead us to recommend that our clients not purchase this property.
Prior to submitting the offer, our founder visited the property once more to reinspect the foundation. On previous visits, only one portion of the foundation and crawlspace was accessible. Our founder had a suspicion that when it rains, there could be moisture issues with the foundation, and wanted to confirm that the entire foundation would be able to withstand rain without a negative impact on the home value or the buyers.
The final conclusion was that the house would not be a good investment at the price it would sell for, and the Atlasa team recommended to our clients that they not submit their offer. Our clients were disappointed that they hadn’t found their dream home, but they were grateful that they were saved a potentially costly and unsafe investment.
The Atlasa team provided our clients with a thorough breakdown of the safety and structural problems associated with a wet crawlspace, including air quality, dry rot, termites, and erosion, as well as the potential solutions to these issues and costs associated (which were estimated to be at least $100K+).
Step 1: Full Due Diligence of Property
Our team fully reviewed the disclosure package for our client’s desired property. We reviewed permits and validated them with the city’s permit database, confirming that the remodels done to the home were fully permitted. We also checked whether the home was in a flood or liquefaction zone, whether seismic improvements had been done, and quantified any estimated costs for repairs or upgrades.
Step 2: Comparable Sales Analysis
We also completed a thorough comparable analysis of the property, and provided a recommended offer price range, at which we thought the property would sell for in this climate. We assessed that the listing was underpriced in order to increase interest, and analyzed sales of similar properties in the subject property’s location over the past year.
Step 3: Determine Strategic Offer Price and Draft Offer
After reviewing the due diligence package and comparable sales analysis with our clients, we helped them determine a strategic offer price for the home. We drafted their offer and prepared to submit.
Step 4: Agent Revisits Property Prior to Offer Submittal
One side of the crawlspace was difficult to access, so our founder brought a hammer and accessed the crawlspace on his own. He found that this side of the crawlspace had not been more recently replaced like the other side had, and as a result it was visibly impacted by the moisture from the rain.
The soil was wet to the touch, and it was clear that the entire substructure was wet from the rain. Below are images that show where the moisture damage was visible under the crawlspace, and what we shared with our clients.
[Image 1] This image shows the foundation footings under the difficult to access side of the crawlspace for this property. The darker portion of the concrete footings is a water stain that shows how high the moisture can get underneath the crawlspace.
[Image 2] This image shows the footings on the other side of the crawlspace. The concrete footings on this side also show moisture stains, very high up on the footings.
[Image 3] This image shows the moisture stains on the wall of the crawlspace. Our team was concerned with how high this moisture line was, since it indicates that the crawlspace likely gets very wet, especially in torrential rain.
After this onsite observation, our team noted the following concerns:
The footings were recently replaced, which made us suspect that the previous footings were shot from water damage and the developer was attempting a quick fix.
The moisture under the crawlspace could be what was causing the termites found in the pest report.
The water stains on the walls and footings of the foundation were very high, which means that when there is torrential rain, it is very likely that the water under the crawlspace rises quite high and has potentially filled all the way up in the past.
The soil under the substructure was wet to the touch, indicating that even with “normal” rain, the crawlspace was full of moisture.
Of course, this wasn’t great news about the property. Here are a couple of the questions we discussed with our clients regarding the moisture issues we noted above.
What are the impacts of the moisture concerns we found in the foundation?
Air Quality: The developer did not replace the ducting system in the home, which means that the ducting system likely has small holes in it. If there is continued moisture in the crawlspace that ever results in mold, the mold could travel through the ducts, which could be hazardous to anyone living in the home. Although there were low chances of this happening, it was still a possible safety concern, and a potential risk not worth taking.
Dry Rot: Every time it rains, the foundation gets wet, which means eventually the wood can get dry rot, and wet wood attracts termites.
Erosion: Consistent moisture in the foundation can cause erosion. This could take 5-10 years, which means it is a longer term concern.
Can anything be done to alleviate the moisture issues?
Yes, there are a few potential solutions:
Build a french drain around the foundation and crawlspace,
Pour concrete into the crawlspace,
Install a sump pump to suck water out of the crawlspace.
However, these solutions could be costly. Our team estimated $100K+ from what we’d seen in the past, not including the potential seismic improvements needed.
Our team was additionally concerned that other key systems in the home had not been updated during the remodel, such as the windows, the plumbing system, the roof/siding and the ducting. These were eventual cost considerations for our client.
Conclusion
The overall recommendation was not to purchase the house. With the amount of work needed to update the property, in addition to the price it would likely go for (other agents would not be pricing in the amount of repairs this home would need), our team was concerned that our clients would be overpaying for the house, and even if their offer was accepted, they would be overpaying for the home.
Our clients ultimately followed our recommendation not to purchase this home, but the search for a safe and valuable investment for them continues! We are proud to advise our clients to make safe and smart decisions when it comes to home shopping, even if it means the search goes on a little longer.
Reach out to us today if you are interested in learning more about how we can help you find your dream home and the best investment for your family!
