Short answer: You have three choices. Fix it before you list, sell as-is with full disclosure, or give the buyer a credit. Which one fits depends on how serious the problem is, how much time you have and how the buyer is paying. All three start the same way, with a written report from a California-licensed structural engineer. None of them lets you skip disclosure.
We've already written about selling as-is versus fixing things up in general. Foundation problems get their own post because the paperwork, the permits and the lender rules are different from worn carpet or an old water heater.
Key Takeaways
- California's Transfer Disclosure Statement asks sellers whether they know of significant defects in the foundation or slabs, and separately about settling, slippage or other soil problems. If you know, you disclose.
- Get the engineer's report before any contractor bid. It tells you whether you're looking at cosmetic cracking or real movement, and it's the document buyers and lenders will ask for.
- A permit on file doesn't prove the work passed inspection. The City of Irvine says inspections must be passed before work is covered, so check the inspection history too.
- Credits have limits. On a Fannie Mae conventional loan, seller contributions can only go to closing costs and prepaids, are capped at 3%, 6% or 9% depending on the down payment, and anything above the buyer's actual closing costs comes off the price.
- Buyers can walk away more easily right now. Only 18 Irvine homes went under contract September 24–30, 2026, with 700+ for sale (our team's review of CRMLS data).
Start with an engineer, not a contractor
The most common mistake we see is calling a foundation repair company first. A contractor will quote you a repair. That's their job. What you need first is someone with no repair to sell telling you what's actually going on: a hairline shrinkage crack in the drywall, settlement that has stopped, soil movement, a drainage problem, or something that is still moving.
A California-licensed structural engineer's written report answers three questions:
- Is the condition structurally significant?
- Should it be repaired before you list, or can it be documented and disclosed as it is?
- What will a buyer, their inspector, the appraiser and the lender need to see to close?
Don't assume your house behaves like the neighbor's. Soil and grading vary by tract, slope, fill and construction era. Even Irvine's own guidance for home additions asks for a soils report covering bearing capacity and expansive soils when certain criteria apply. That tells you how property-specific this is.
Before the engineer comes out, pull together what you have: old inspection reports, repair invoices and proposals, permit records, any insurance claims for water or structural damage, and photos. You can look up permits through the city's online permit inquiry or call Irvine Building & Safety at (949) 724-6313.
Option 1: Repair before you list
A finished repair that was permitted and passed inspection opens the house up to the most buyers and takes the issue off the lender's table. It costs money up front and takes time, and it only works if the paperwork is complete.
Irvine requires permits for most construction and repair work covered by the building code. Retaining walls over 4 feet, measured from the bottom of the footing, need one too. Have the engineer and contractor confirm with the city exactly which permits, stamped plans and inspections apply before anyone starts digging.
Here's the part sellers miss. A permit record only shows a permit was issued. The city's inspection page says inspections must be passed before work is covered. If an earlier owner had foundation work done and it was covered up before the inspector signed off, that's an open question you want answered before you list. Our post on open permits when selling your Irvine home walks through the options.
When the work is done, keep everything in one file: the engineer's report, stamped plans, permit number, inspection sign-offs, the contractor's proposal and final invoice, before-and-after photos and any warranty. A buyer can evaluate a documented repair. "The foundation was fixed" with nothing behind it doesn't count.
Option 2: Sell as-is and disclose everything
"As-is" means you won't make repairs. It doesn't mean you don't have to tell buyers what you know. Mixing those two up is how sellers end up in trouble.
The Transfer Disclosure Statement asks, in plain words, whether you're aware of significant defects in the foundation or slabs. It also asks about settling from any cause, slippage, sliding or other soil problems, fill on the property, and structural changes or repairs made without permits. The Department of Real Estate's disclosure booklet reproduces the full form.
As-is with the engineer's report attached and a price that reflects the condition is a perfectly good strategy. It works best when the repair would take months, the condition is well documented, or you expect a cash buyer. Just don't write "minor cracking" on the disclosure when you have a structural engineer's report in your drawer. Attach the report.
Option 3: Give the buyer a credit
A credit lets the buyer handle the repair after closing, with their own contractor. It can keep a deal simple when the scope is clear and everything is disclosed. It also has real limits.
The buyer's loan decides what a credit can do. Under Fannie Mae's rules on seller contributions, the money can cover the buyer's closing costs and prepaids, not the down payment. The cap is 3% of the price if the buyer puts less than 10% down, 6% with 10% up to 25% down, and 9% with 25% or more down. Anything above the buyer's actual closing costs is treated as a price reduction. So a big "repair credit" often ends up as a lower price, and the appraisal and loan get recalculated. Talk to the buyer's lender before you accept an offer built around a credit. We do that on every financed offer; here's how we check buyer financing.
A credit moves the risk. It doesn't fix the house. The contract should name the condition, the documents the buyer received, the dollar amount and whether the buyer can do more inspections before closing. A vague credit on a condition nobody has documented usually turns into a second negotiation, or a cancellation.
Some loans won't close until it's fixed. Depending on the loan program and what the appraiser notes, the lender may require the repair before funding, credit or not. Know who your likely buyers are before you build the plan around a credit. Our post on seller credits versus price cuts goes deeper on the trade-off.
Why this matters more in today's Irvine market
A year ago a buyer might have overlooked a crack to win the house. Not now. Our team's review of CRMLS data shows 28 Irvine homes closed September 24–30, 2026 at an average of $758 per square foot, only 18 went under contract that week, and more than 700 were for sale. Buyers have options, and their agents are reading every page of the disclosures.
A foundation issue that shows up for the first time during the buyer's inspection gives them the leverage. The same issue, with an engineer's report and a plan already on the table, is just one more thing they're pricing in. Which path nets you more depends on your house, your timeline and who's buying. That's the math we run with every seller before we list.
If you're looking at a crack and wondering what it means for your sale, call us at (949) 208-5555. We'll go through your documents and options before you spend money on anything. Or request a home valuation to see where your home stands today. You can also read what other sellers say about working with us on Google and Zillow.
Frequently Asked Questions
Do I have to disclose foundation cracks when selling a house in California?
If you know about a significant defect in the foundation or slab, yes. The Transfer Disclosure Statement asks about it directly, and it also asks about settling, slippage and other soil problems. Disclosure is based on what you know. If you have an engineer's report, attach it.
Can I sell my Irvine home as-is if it has foundation problems?
Yes. As-is means you won't make repairs, not that you can leave things off the disclosure. You still fill out the Transfer Disclosure Statement accurately and include any engineering reports or repair records you have, then price the home to reflect the condition.
Is it better to fix the foundation or give the buyer a credit?
It depends on how serious the problem is, how much time you have and how the buyer is financing. A permitted, inspected repair draws the most buyers. A credit is simpler but limited by the buyer's loan. On a Fannie Mae conventional loan it can only cover closing costs and prepaids, and anything above that comes off the price.
How do I check whether an earlier foundation repair was permitted and inspected?
Search the City of Irvine's online permit inquiry or call Building & Safety at (949) 724-6313, and ask for the inspection history, not just the permit. The city requires inspections to be passed before work is covered. If the final sign-off is missing, talk to your engineer and the city about how to close it out before you list.
About Irene and Ricky Zhang
Irene and Ricky Zhang are a husband-and-wife real estate team with Keller Williams Realty Irvine. RealTrends Verified ranks Irene and Ricky Zhang the #1 small team in Irvine by both sales volume and transaction sides (2026 City Rankings, based on 2025 production). They met at Procter & Gamble, where they spent eight years in Customer Business Development, moved to Irvine in 2014, and have been selling homes here for more than a decade, in Great Park, Woodbridge, Turtle Rock, Orchard Hills and across the city. They work in English, Mandarin and Cantonese.
Keller Williams Realty Irvine · (949) 208-5555
Equal Housing Opportunity. Irene Zhang CA DRE# 01967217 | Ricky Zhang CA DRE# 01972236 | Keller Williams Realty Irvine | Regulated by the California Department of Real Estate. Disclosure items are from the Real Estate Transfer Disclosure Statement (California Civil Code §1102.6) as reproduced by the California Department of Real Estate; permit and inspection rules from the City of Irvine; seller contribution limits from the Fannie Mae Selling Guide (B3-4.1-02); Irvine sales and inventory figures from our team's review of CRMLS data for September 24–30, 2026. This article is general information only and is not legal, tax, engineering or financial advice. If your property is currently listed with another real estate broker, please disregard this offer. It is not our intention to solicit the offerings of other real estate brokers. We cooperate with them fully.
