Can I sell a house with foundation problems in Texas?
Yes, you can sell a Texas house with foundation problems as-is, without repairing it first, as long as you disclose the problems you know about on the state's seller's disclosure notice. Your options are to repair it and then list it, list it as-is at a price that allows for the repair, or sell it to a cash buyer who prices the repair into its offer.
By Andy Rong
Published
This guide is general information, not legal, tax or financial advice. Laws change and every situation is different, so check yours with a professional.
On this page
- Why do so many Texas houses have foundation problems?
- Do I have to disclose foundation problems when I sell in Texas?
- Will a buyer's lender finance a house with foundation problems?
- Does homeowners insurance pay for foundation repair in Texas?
- What are my options?
- Selling to Covent Homes
- Questions homeowners ask
- Sources
Why do so many Texas houses have foundation problems?
Much of Texas is built on clay soils that swell when they're wet and shrink when they dry. Houston Black clay, often called the Texas state soil, covers about 1.5 million acres of the Blackland Prairie from north of Dallas south to San Antonio, and the U.S. Department of Agriculture notes that its very high shrink-swell potential commonly limits building in metro areas (USDA, soil series description). A house on ground that moves can move with it.
Common signs are cracks in walls or brick that run diagonally from the corners of doors and windows, doors and windows that stick or won't latch, gaps around window frames, and floors that slope or crack. Not every crack means a failing foundation, which is why an engineer's report is worth having before you decide anything.
Do I have to disclose foundation problems when I sell in Texas?
Yes, if you know about them. A seller of a single-family home in Texas generally has to give the buyer a seller's disclosure notice, and the notice asks about known defects in the foundation or slab, previous structural repairs, and settling or soil movement (Tex. Prop. Code § 5.008). If the notice arrives late, the buyer can end the contract within seven days of getting it.
Disclosing also protects you. A buyer who learns about a problem you knew of and didn't disclose can come back after closing, and an engineer's report or repair records give the buyer facts instead of a guess.
Will a buyer's lender finance a house with foundation problems?
Often not until it's fixed. Under Fannie Mae's rules for the conventional loans it buys, when an appraiser finds problems serious enough to affect a house's safety, soundness or structural integrity, the appraisal has to be made subject to the repairs being completed (Fannie Mae Selling Guide). Unless the work is done before closing, a buyer using that kind of loan may not be able to close.
Does homeowners insurance pay for foundation repair in Texas?
Usually not, unless your policy adds it. The Texas Department of Insurance says most policies cover a sudden and accidental release of water, like a burst pipe, but exclude a continuous leak, wear and tear, and earth movement, and that coverage for damage to foundations or slabs is an optional endorsement. Read your own policy, and ask your agent whether it has that endorsement.
What are my options?
Repair it, then list it
Get a structural engineer's evaluation, then bids from at least two foundation repair companies, and ask whether the repair warranty transfers to a buyer. A repaired foundation with an engineer's letter and a transferable warranty is something a buyer and a lender can work with, but you pay for the repair before you know the sale price.
List it as-is, priced for the repair
You disclose the problem, share the engineer's report and price the house to leave room for the repair. Expect buyers paying cash or with renovation loans, and expect the inspection to open a negotiation over the price.
Sell it to a cash buyer
A cash buyer that buys houses needing work prices the repair into its offer and needs no lender's approval, so the foundation can't stop the loan. You still disclose what you know, and you skip the repair, the listing and the wait.
Selling to Covent Homes
If selling as-is is the right fit, here's what every Covent Homes offer includes. Whether Covent buys a house with foundation problems is answered below.
No repairs or cleaning. You don't repair, paint or clean up for us. We buy the house in the condition it's in.
No showings before you sign. Nobody walks through your house before we have a signed contract, so there are no strangers in your home while you decide.
You pick the day. Choose a closing day 14 to 60 days out, and you get paid at closing.
Closing costs paid. Covent pays the closing costs, including title and escrow fees. You pay off your own mortgage or liens.
Stay 10 days free. After closing, you can stay in the house up to 10 days at no cost, so there's no rush to move.
Cash, no financing. We pay cash, with no lender and no financing contingency, so a buyer's loan can't fall through.
Questions homeowners ask
Will Covent buy my Texas house with foundation problems?
Yes, if the house can be repaired. Covent buys houses with foundation problems as-is, and you don't fix anything first. Foundation work is one of the repairs that stops many buyers' lenders, so Covent prices it into the offer instead.
Should I get a structural engineer's report before I sell?
It usually helps. A report from a licensed engineer says what's wrong, how serious it is and what the fix is, which gives buyers and their lenders facts to work with. Ask whether the engineer is independent of any repair company.
Do I have to tell a buyer about foundation repairs that were already done?
Texas's disclosure notice asks whether you know of previous structural repairs, so answer it truthfully, and share the repair records and any transferable warranty. Records of a professional repair give a buyer facts instead of a guess.
Do I have to make repairs or clean out the house?
No. Covent buys the house as it is today. Leave behind anything you don't want to take with you.
Read more about your situation
Where Covent buys in these states
Sources
The public pages this guide's facts and figures come from.
- U.S. Department of Agriculture: Houston Black, Texas State Soil
- USDA Natural Resources Conservation Service: Official Series Description: Houston Black Series
- Texas Legislature: Texas Property Code, Chapter 5
- Fannie Mae: B4-1.3-06, Property Condition and Quality of Construction of the Improvements
- Texas Department of Insurance: Home insurance guide
About the author
Andy Rong leads Covent Homes, which buys houses for cash, as-is, from homeowners in Texas, Georgia, Tennessee, Florida, Indiana, Missouri, Kansas, and North Carolina.
Andy writes these guides to answer the questions homeowners ask before they sell, in plain words, with a public source for every fact and number.
Andy isn't a lawyer, an accountant or a financial adviser. The guides give general information, and each one says when it's time to talk to one.