House inspection reports, what do you do?

[Tybee]

we have put in an accepted bid on a house near my kids in Maine. We got it inspected yesterday and there are some things wrong with it, according to the report. We still have not gotten the septic report or water quality report. This is just the house and garage.

Garage has knob and tube, improperly installed wiring. House has one panel that is fuses, rest circuit breaker. But report says is may be hard to insure with any fuse panel.
Report says roof was improperly installed, metal over asphalt shingles directly, no buffer.
Chimney is in need of repair and inspector says would not close without escrow, it's a safety issue.

What would be your response to such a report? (Husband and I are already in disagreement over this.)

[Float On]

Can you ask your home insurance agent? Sometimes those reports are a little more scary than reality.

[herbgeek]

Personally? I'd probably walk away at this point. I'm thinking re doing the electric and the roof and the chimney is going to be big bucks. But you could also get some estimates on how much the repairs will cost, and see if the buyer would accept that amount less.

[ToomuchStuff]

Those other reports are still coming, correct? I expect it would be one thing if you found those ok and another if both of those failed.
Was your offer contingent?

[pinkytoe]

The house we bought had some things in the report that were safety hazards. Our realtor had us submit an offer that would cover the difference of said repairs - or at least the worst ones. They accepted. We have had to spend a lot more than anticipated to correct the others. It really depends on how badly you want that particular house, what the market is like in that area (can you offer less?). Really, how much stress and hassle do you want to deal with??

[catherine]

Yeah, I'd first get the advice of the realtor to see how things are typically handled, but my gut feel is that you ask for a significant price adjustment to cover electrical and roof. I'm thinking 20k.

[Tybee]

These are such helpful answers, all of them. I find myself running the gamut from offering less to walking. But it is too early to get into it with realtor until we get the other tests, as something horrible about the drinking water would be a total rule out anyway.
My own personal style is like Pinkytoe says, how much stress can I handle, and the answer is not much, so I tend to walk. My husband's style is like Catherine's, but he already wants to close this deal, and I want to get some second opinions. He wants to close it because he loathes looking for houses, not because he is in love with this one.

[Tybee]

Float, we really should call an insurance agent out there--our homeowner's does not write there. But I would want them to state they could insure it with the wiring as is, because these folks won't fix it, and I don't have the money to fix it immediately.

See, now I feel like saying to husband, fine, you come up with the money for all these fixes, I'm not putting a cent into these fixes--but that is a ticket to major marital disharmony, maybe a split.

But seriously, that is how I feel about it.

[iris lilies]

Can you ask your home insurance agent? Sometimes those reports are a little more scary than reality.
Agreed. We used the i spector who in our neighborhood is known as “The Deal Killer” by real estate agents. He can always find something wrong to get ypu out of the deal if you get buyers’ remorse. We plunged ahead, ignoring all issues, but that doesnt mean we arent paying attention. DH is taking ladders to Hermann this week to attack squirrel holes in our house, for instance.


But all of these issues are certainly concerning if the real estate will be a major part of your assets and if you have to get a mortgage. You are of an age as to have lived in old houses so you know there are always multiple problems with old houses, but these may be beyond your pocketbook.

[SteveinMN]

Two observations:

- The presence of knob and tube is not a show-stopper if it can be proven to be not in use. In fact, in some parts of the country, I'm guessing k&t that passes inspection is insurable. There is k&t in the attic of my rental place (inspector had pictures of it) but it was verified to be abandoned (rest of the house has circuit breakers and three-wire outlets). I had no issue getting the place insured.

- Do not accept as a negotiation the seller paying for the repairs directly. Their incentive is to get the heck out of Dodge with as little damage as possible so they'll choose the lowest bidder or the tradesperson available the soonest. Their goals are not yours; don't negotiate away a proper fix to the problems.

[Tybee]

thanks, Steve, that is excellent advice, on both counts.
Iris Lilies, it's the second paragraph of yours that rings home. Yes, this would be our first mortgage in 10 years, and we are getting much older, and retirement savings not where they should be. This deal seems like a money pit already. I fear these problems are beyond my pocketbook.

[catherine]

If you guys are not in love with the place and your gut is telling you that maybe it's not the best place, is it possible to consider renting in the area for a year? I know that's not cheap either, if you already have a home in the Midwest, but it might give you breathing room. You could attend to your parents' needs and look around at your leisure.

Is that a possibility?

[sweetana3]

Personal opinion, but those are some really serious issues. Almost any one of them would have caused me to run away. We had one house we looked at that sparked when we turned on the garage light and saw the knob and tube wiring. The roof is very concerning and requires a specialist.

Remember anything your inspector sees could keep any other potential buyer away if you needed to sell.

Hot market, wanted for tear down, or enough money to fix anything without a second care would have to be in play. It is rare that there is only one adequate house in a market.

[razz]

I would walk away! These are serious issues that tell me that the workmanship done on the house over the years was substandard. The inspector can only see so much but definitely not everything.

Until your DH accepts that house hunting is a very serious business that will impact your future, do the research with him of what you really need. Make a list of desirables, a list of how long you expect to live there, what your needs will be over that period of time, what will trigger you to sell it at any point...? Then, having done the necessary research,

Go hunting in the neighbourhood your are considering in order to see what is available, prices, ease of selling, desirable areas and non-desirables re amenities available that you will need and use over the projected time, floor plans, separate house requiring your maintenance or simple one-floor condo with maintenance included.

That is what I did in buying my latest house and friends are now looking for homes like mine. Theirs are too big, multiple levels, too far away from amenities, too much work and they have to make a decision ...

[Teacher Terry]

When we bought our last old house we made sure that structurally it was good as you are mentioning all big ticket items. I would not do it. Ours was more that the inside needed to be redone to suit us. Yes the floor was rotten in one spot and we had a little mold in one closet but that was easily taken care care of. Our heating system, electrical and roof were all great. At my age I am unwilling to take financial risks because there is no way to recover.

[Williamsmith]

What’s the point of a home inspection if it isn’t to keep you from making an expensive mistake? I run.

[Tybee]

Thanks, everyone, for all your input! We tried to make it work, but when talking to the insurance folks, realized that we would not be able to get a standard insurance policy, and so we walked from the house.

Thanks again.

[bae]

Knob and tube wiring is not by itself a huge reason for any concern, *if* it has been properly maintained and not messed with over the years by incompetent people. Most knob-and-tube wiring I've come across has been in poor repair though, or alterations to the home have rendered it unsafe.

I wouldn't buy a home with significant defects unless:

- the location was somehow essential/irreplaceable. My current house had some problems, but I wanted the site.

- the price is reduced to account for the issues, *including* your time/bother dealing with them. Do not, unless it is a minor issue, have the current homeowner "fix" issues, that almost never goes well

- you are planning a remodel/restoration, and priced your offer knowingly according to its "as-is" condition. I got a great deal on our final California house, but then spent 7 years and hundreds of thousands of dollars restoring it.

If it's just a fungible home in a fungible location, don't touch it!

[Tybee]

Knob and tube wiring is not by itself a huge reason for any concern, *if* it has been properly maintained and not messed with over the years by incompetent people. Most knob-and-tube wiring I've come across has been in poor repair though, or alterations to the home have rendered it unsafe.

I wouldn't buy a home with significant defects unless:

- the location was somehow essential/irreplaceable. My current house had some problems, but I wanted the site.

- the price is reduced to account for the issues, *including* your time/bother dealing with them. Do not, unless it is a minor issue, have the current homeowner "fix" issues, that almost never goes well

- you are planning a remodel/restoration, and priced your offer knowingly according to its "as-is" condition. I got a great deal on our final California house, but then spent 7 years and hundreds of thousands of dollars restoring it.

If it's just a fungible home in a fungible location, don't touch it!

It was the site and location that made it great. However, at the price we could not afford to buy the house and do the work necessary to fix the significant problems and to get it where we could get it insured; we just did not have enough money. And that's okay. We thought it was in okay shape as it was priced accordingly. But it wasn't, so we can't.

Catherine, I really like your rental idea but DH is set against that, so I guess we keep looking.

We will probably look in a less expensive area, for something that is priced low enough that we can do the work necessary to make it okay. We will find something, or we will stay put, I guess.

[catherine]

So sorry to hear about this, but I'm sure the right house will present itself at the right time.

[Tybee]

So sorry to hear about this, but I'm sure the right house will present itself at the right time.

Thanks, Catherine!

[Teacher Terry]

I agree that you will find the right one. Sometimes it takes time which is frustrating.

[Tybee]

I agree that you will find the right one. Sometimes it takes time which is frustrating.
thanks, Terry, it helps to hear you guys say that!

[iris lilies]

Tybee, you are house hunting across states, right? That makes it reeeeeaaally difficult.

i know people who bought their house sight unseen, from MLS images. But that only worked for them becuase they were buying in a area of that fown that they knew, they had narrowed their search down to a few subdivisions, and these houses were all post 1970. All alike pretty much.

Yet, there are a lot of people who buy real estate across states, not ever seeing the property. There is a least one major rental buyer on the MMM site with property owned in many states. But I woild never buy rentals that way. Well, I wouldnt buy rentals period.

Website images can be mileading. My friend is looking for a house in New
Hampshire and she showed me a link to the cutest house. It had a great looking interior and exterier. She saw it in person and it had a funky floor plan.

our Hermann house looked better on the website than in person.

[rosarugosa]

So sorry it didn't work out, Tybee.

[Teacher Terry]

The one time we moved across country we rented for awhile before buying. It was a pain with 2 little kids but it seemed like the only way to make it work. The other way would be if yu had a bunch of houses lined up to see and then flew out for a few weeks. I guess that depends how much stock is available.

[Tybee]

We have gone out and looked at stock lined up probably 4-5 times thus far. In earlier houses, we have bought from a photo off the internet (3 times) and it worked out well each time. But I had some familiarity with the areas. I have some with where we are looking, but I think going out there and doing a short term rental may be necessary.

[pinkytoe]

We bought this house out of state sight unseen after pinpointing a couple of areas we wanted to be in. We rented an Air BnB prior to get a feel for neighborhood, traffic, proximity of parks, shopping etc. Unless you are very familiar with a place however, there can be lots of surprises you didn't think about, so I would not do it that way again.

[Teacher Terry]

The house we have now looked like it was move in ready on the internet. When we saw it in person it was a major fixer upper. I would not buy sight unseen.

[rosarugosa]

Tybee: May I ask what general area of Maine you are looking in? I love Maine, have relatives up in Eddington and DH & I spent last weekend in Portland.

[Tybee]

Hi Rosa, our family that is out there is in Portland, downtown and one of the islands in Casco Bay. We have been looking near Bridgton, but we may need to go farther afield, so will look up in China/Winsor/to the coast area, although Mid-Coast really expensive for us.

[Teacher Terry]

We were in Portland in the fall and it was really beautiful. Although, the locals told us we were lucky the weather was warm and no rain or snow yet which they said was unusual.

[rosarugosa]

Portland area real estate has really gone up since we fell in love with the city in 1999. It's still more affordable than Boston, but certainly not cheap anymore.
The Bangor area is still a bargain, but that's pretty far away if your people are in the Portland area.

[Gardenarian]

Last year I bought a house (for use as a rental) that had significant foundation, dry rot, plumbing, and HVAC problems. The house was in a fantastic location and priced below market value.
My inspections came back with about $40,000 worth of work needed. My real estate agent and I negotiated the price down $30,000. I had all the work done myself (NOT by the owner.)

The result? I now own a house worth around $480,000 that, with repairs included, cost me $365,000. And I rent it out below market rate too, so everyone wins (I hope :)

Because I was paying cash and this is was an (empty) rental, I was not personally put out (having to live with contractors, no water/heat, etc. Or dealing with 2 mortgages.)

Where I live, barring some major disaster, property values are unlikely to ever decrease. In the downtown historical district I purchased, prices are increasing 12% per year.

So, it's complicated.

[Tybee]

Last year I bought a house (for use as a rental) that had significant foundation, dry rot, plumbing, and HVAC problems. The house was in a fantastic location and priced below market value.
My inspections came back with about $40,000 worth of work needed. My real estate agent and I negotiated the price down $30,000. I had all the work done myself (NOT by the owner.)

The result? I now own a house worth around $480,000 that, with repairs included, cost me $365,000. And I rent it out below market rate too, so everyone wins (I hope :)

Because I was paying cash and this is was an (empty) rental, I was not personally put out (having to live with contractors, no water/heat, etc. Or dealing with 2 mortgages.)

Where I live, barring some major disaster, property values are unlikely to ever decrease. In the downtown historical district I purchased, prices are increasing 12% per year.

So, it's complicated.

Exactly--the key to making this work is paying cash. we have to find something where we can pay cash, as we have done in the past.