Don't Destroy the House; Hire a Structural Engineer
The other day I looked at a house which had numerous cracks in the exterior walls of the first floor and cracks all around the foundation walls.
A rough rule of thumb with cracks is that if they are less than the thickness of a quarter, then they might not be a major problem. In this house, they could have been talking about the diameter of a quarter and it still would have been considered a problem.
A house might see vertical or horizontal cracks. A vertical crack may be related to settlement, whereas a horizontal crack may be more related to a collapsing wall, sometimes because of outside pressure against the wall. In this house, there were both types of cracks, with the horizontal crack going around the entire foundation.
At this point, I had three thoughts: let's get the hell out of here before it comes crashing down on us; I do not recommend buying this house; and curiosity, what is causing these cracks.
I figured that we had enough time to satisfy our curiosity and try to determine what was happening.
Apparently, the original house was a one story house with a basement and with a low attic.
The redesigned house maintained the first floor and the basement, but removed the attic and in its place added a second story.
The roof on the original building would have been designed with trusses. This design would have allowed the roof to distribute its weight partially on the exterior walls and partially on the interior main beam of the foundation. It, also, would have aided in preventing sway on the roof.
The new design was not constructed with trusses so all of the weight was placed on the exterior walls of the house and there was nothing to prevent sway or a cantilever effect that would work its way through the exterior walls of the house and down to the basement walls.
The second level added weight to the house that the original design did not have. This weight was distributed completely to the outer walls.
Nothing was done to the exterior walls of the first floor or the foundation to strengthen them to carry this additional load.
The result, the foundation walls began to buckle, hence the horizontal cracks, and the first floor exterior walls, especially around the corners of the house saw too much weight and too much sway, hence the see through quarter-sized vertical cracks.
If you are thinking of having a major renovation done to your house, such as adding another floor, make sure that someone knows what they are doing.