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Structural Damage Can Be a Deal Breaker

Homes With Structural Damage – What Buyers Should Know

Most homebuyers do not set out to buy a home with any sort of structural repair issue. But when statistics showing more than 5.5 million existing home sales for the year 2016 were published, it becomes apparent that not every home sold could have been completely free of defects – while it isn’t the norm, some home buyers will run across seemingly great properties for sale only to find that there is a structural issue.

With this in mind, when should a homebuyer entertain the idea of buying a home with structural defects and what type of structural defect should be approached with extreme caution?

Major structural repair issues to be aware of

Most people will attest that there are no perfect homes. No matter how carefully the sellers have worked to prepare their home for the market, there will always be at least a few small issues that were missed or cannot be fixed. But there are also some major structural issues that buyers should investigate carefully before deciding to move forward with any offer.

These include:

  • Foundation problems, including cracks in foundation walls more than one-quarter inch wide and any foundation or settlement issues that show the home may have shifted or moved, such as doors and windows that do not open and close properly and sloping floors inside the home
  • Severe termite infestations or unrepaired termite damage that endangers floor joists, sill plates, and other wooden structural components
  • Extensive mold or water damage that will require major renovation, including the replacement of some of the structural elements of the home
  • Shoddy workmanship or unpermitted renovations that negatively affect the structure and support system of the home. Many sellers choose to renovate before listing but, unfortunately, some try to cut corners

Understanding the scope of the structural defect

When sellers disclose a known structural defect or the buyer’s home inspection process reveals a latent one, it is important to understand the scope of the defect. In most cases, this type of expert assessment should always be performed by either a certified structural engineer or a reputable, experienced building contractor familiar with similar home designs and construction techniques.

Using the structural assessment information to renegotiate

Once the buyers have received the findings of the structural assessment and discussed it with their real estate professional and their lender, they should consider using that information to:

a) decide whether or not to remain in the transaction

b) renegotiate the price and terms of the purchase agreement to offset the expected cost of the repairs

c) renegotiate the purchase agreement to allow the sellers to make the repairs to the satisfaction of the buyers at seller’s cost

If the home is otherwise in good condition and the structural defect is repairable, buyers may benefit by renegotiating price and terms and moving forward. If the sellers are unwilling or unable to reduce the price or offer some other assistance to offset a structural defect, buyers should seriously consider withdrawing their offer and moving forward with another home.

Always make an informed decision when considering a home with any type of structural defect

Information is the best defense when considering the purchase of any home with a potential structural defect. Buyers can start by carefully examining the home while viewing it with their real estate agent, studying the seller’s disclosure carefully, and requesting further information for any issue that may be related to the structural condition of the home.

It is important to remember, however, that some home loans, such as FHA and VA mortgages, are contingent on condition. Buyers who are considering accepting a home with a structural defect should discuss the pros and cons carefully with both their real estate agent and lender before making a final decision.

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