Foundation problems ;-( what to do

FOUNDATION PROBLEMS ;-( WHAT TO DO?

I have a client that I represented many years ago.  A series of events since their purchase, they are going to sell their home.  In Houston, the ground is mainly sand so at times there will be foundation issues due to the unstable nature of the ground.

Hope you are doing well. I am still trying to figure out what to do with this house. I have gotten a few opinions on the foundation and now have a few questions for you dependent on some different scenarios.

Here is an email that I received from my client.

Scenario 1:

Allied is willing to fix the front of the house under warranty but to fix the inside they want to use Polyurethane foam to lift the chimney and the cost would be about $3,500. I have gotten very different opinions from people on the use of Polyurethane.  Allied is the only company that does it in Houston.  Have you ever sold a house that had the foundation fixed with it? It has a 10 year warranty. Have you heard anything about the use of Polyurethane? If I go this route in fixing the house it would be the least expensive and then I would want to sell the house this year even if I did lose a little bit of money on the deal.

Scenario 2:

My other option is to actually pay the $13,000 it would take to fix the house with the traditional peer system.  If I do that it is putting more money into the house so then my plan would be to live in it for at least another year and then lease the house and keep it as an invest house. I would also hopefully be able to refinance in a few years when I have some equity in the house.

Scenario 3:

My parents think the best option would be to sell the house with the foundation problem for a loss. They don’t think it’s a good idea to keep putting money into the house and they are convinced I just bought a bad house that had the foundation issue and the inspector missed it. I owe $175,000 on the house and it is worth about $190,000. I don’t know what someone is willing to pay for a house with a known foundation issue. I really don’t want to lose a ton of money on the house. I would have to borrow that money from my parents. What has been your luck with selling homes that have a known issue such as the foundation?

I know I am probably going to lose money on this house but I would like to keep the loss at a minimum. I am just now sure what to do now and I am concerned about the number of houses that will end up being up for sale this year.

Which scenario do you recommend? why? How do you rank them?