Inspection done, too many problems?

Discussion in 'General Home Improvement Discussion' started by blackandgold8, May 5, 2010.

  1. May 5, 2010 #1

    blackandgold8

    blackandgold8

    blackandgold8

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    I recently agreed to purchase a house in a nice location in a town I wanted to live in. The house is 1,090 sq ft ranch on about 1/3 acre.

    After inspection, I found that the coil in the furnace needs to be replaced, but the furnace is from the 50s and inspector said I should replace the whole thing. The oil tank was belly patched, which isnt sticking, so he also said I should replace the oil tank. The vinyl siding was improperly installed, and is bowing in the rear of the house. I also found some electrical problems that will need to be addressed. Some mold in basement, so some drywall will need to be replaced. Also, little insulation in the attic.

    I will qualify for the 8000 tax credit, but I was planning on spending that money on remodeling the kitchen and bathroom, which are very outdated. Im basically paying for the location here, as its a very nice neighborhood, but all this sounds costly when I add it up. Im going to ask the sellers to see what they'll pay, but Im wondering if this leaves me with no margin to make any money on the house when I sell it!

    What do you guys think? Thanks in advance for any help!
     
  2. May 5, 2010 #2

    Wuzzat?

    Wuzzat?

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    Those things are the minimum that is wrong with the house.
     
  3. May 5, 2010 #3

    blackandgold8

    blackandgold8

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    What do you mean?
     
  4. May 5, 2010 #4

    gatorfan

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    I think he means that, despite an inspector's best efforts, you will probably eventually find more things wrong with the house. The finding of so many improper repairs probably means there are more that he didn't or couldn't find (hidden in walls etc).

    If you really love the house and are willing to take the risk, I would make the offer contingent on the seller fixing the issues you found or giving you a credit to have them fixed yourself (get quotes in advance!). You can also require them to respond in time to close for the $8k credit or the deal's off. Getting close to the wire-- good luck!

    Matt
     
  5. May 5, 2010 #5

    blackandgold8

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    Oh ok, that makes sense. I wasnt sure if it was a question or a statement. Thanks for the guidance, Matt and Wazzut.

    I do like the house quite a bit, but Im also looking at a 5 year exit plan on it, so I dont want to dump all this money into the house only to break even or worse. Its just, the neighborhood I fell in love with. Homes in the area are selling for over 25k what theyre asking. Though I may sink 20k into it or more....
     
    Last edited: May 5, 2010
  6. May 5, 2010 #6

    inspectorD

    inspectorD

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    Since I know a thing or 3 about inspections....my advice??

    Get some real $$ amounts from actual contractors to fix the issues you cannot. The rest is DIY at the least if you want to make your $$ back in 5 years at best...and even that is no guarantee.
    Otherwise...keep looking.and:welcome:
     
  7. May 5, 2010 #7
    You said you agreed to buy? Do you know the previous owners? Knowing a lot about who did the maintenance and how they did it could make it easier. Also knowing more about what might be wrong could help answer more of your questions.
     
  8. May 7, 2010 #8

    blackandgold8

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    Well, we signed an agreement that was contingent upon inspection.

    I talked to the owners, they will not replace the furnace or oil tank. They had someone go out to "Fix" the furnace (not sure what they did, but apparently got it working. Its 50 years old so more than likely will need replacing while I own the house), and "fixed" the oil tank (like I said, it was patched and oil was taking off the new paint they sprayed on it....).

    Houses in the neighborhood are listed at 220-230 range, though they are 1400 sq ft or 1600 sq ft houses, respectively, while this is 1085 sq ft, so Im not sure what to expect to get if I were to do all these repairs. Im so confused as to go with this house or not.
     
  9. May 7, 2010 #9

    oldognewtrick

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    And remember, you don't make money on a house when you sell it, you make money when you buy it. The initial price has to be low enough, plus the anticipated repairs to show a profit when you sell. Otherwise you will be upside down. Make sure that the neighborhood is trending upward and not in decline. Like Inspector said, get some real numbers from contractors then filter out what you are comfortable DIY and save some $$$ there.

    Good luck on your house hunting. The thing about having a homeowner "FIX" problems before a sale is that sometimes the "FIX" really isn't. Negotiate the price down for the repair and you choose who "FIXES" the problem.

    Just my:2cents:
     
  10. May 7, 2010 #10

    blackandgold8

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    Agreed 100% on the "fixing". I'm not counting anything they said as actually being fixed, and am going to ask for atleast 6 grand off the house. I wouldnt trust the oil tank as it sits now, so that needs to be replaced. I think they only tried running the furnace and didnt fix anything.

    I'm not sure what to estimate siding, my parents have a ranch and their siding was about 8,000 installed.

    I'm really in a jam here because of this $8k tax credit. If I dont buy this house, I dont get the credit. I know its not alot in the grand scheme of things, but Id use it towards repairs on this house. Though, with 8k from the credit, Id still have to worry about the furnace and the oil tank.

    They did agree to credit $900 for electrical to me though.
     
  11. May 11, 2010 #11

    blackandgold8

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    Still in a battle with these guys. This is so stressful.

    These guys wont budge on replacing the boiler and oil tank. They offered me a home insurance plan they would pay for, for the year. Its $490 dollars. The plan, I see, only covers up to $1500 of repairs, doesnt pay for the repairman, and doesnt cover the oil tank or any hazardous waste cleanup (should the oiltank patches break).

    Thing that really grinds my gears? I wrote the sellers a two page letter detailing everything wrong, with the cost to fix it (from estimates), and their realtor never even gave it to them because she thought the deal would be off if she did....
     
  12. May 11, 2010 #12

    inspectorD

    inspectorD

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    Then contact the realtor again and tell her about the law where she needs to fully disclose everything she recieves to her client. And if you get no response, contact your dept of consumer protection, they have a licensing division that will contact her.
    Can you tell I love realtors?? :hide:

    And then run....this is your chance to keep looking and find a home worth more than $8000 if you think about it.
     
  13. May 11, 2010 #13

    blackandgold8

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    Yeah, I guess I need to trust that the market isnt changing anytime soon and I might be able to make that $8k I missed on the credit by falling prices.

    I suppose I need to get less attached to this house and look at it as a money making opportunity, rather than dumping all this money in and not making any return on it when I sell. I know its much more than "money making", its your home, and truthfully I probably wont make much money on any house when I sell it, but of course its best to think of ways you can improve a house than ways you can just do "expensive upkeep", like this is...
     
  14. May 11, 2010 #14

    oldognewtrick

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    The results of the inspection report has to be made available to any prospective buyer. Any problems uncovered cannot be covered up or not made known. Failure to fully disclose carries pretty stiff penalties. You may have a bargaining tool here.

    And remember, Realtors don't work for the buyer, they are paid buy the seller. The agent wants to make a sale, you have to live with their eagerness to earn a living. When you start to question whether its a good deal or not, sometimes it isn't. As inspector refereed to, don't let the Realtor not do their job. Theres other Realtors and other houses, in fact a lot right now.

    If you bought the house, made the repairs, would that put you upside down on value? Also what are the market value trends in this neighborhood?

    Hang in there, house buying ain't easy.
     
  15. May 11, 2010 #15

    blackandgold8

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    Well, the house is selling for 171k. Id have to put about 20k into it for repairs, minus the tax credit, so about 12k out of pocket. Id also have to remodel the kitchen and bathroom, so another 12k if I go budget with Home Depot/Lowes. This puts me about 195-200k into the house.

    There are homes in the same circle selling for 230-240k range, but they are bigger ranches (1400-1600 sq ft), compared to this one being only 1090 sq ft. So maybe I could sell it for 210k? Not much profit, if any, right now unless I should be anticipating an upswing in 5 years.
     
  16. May 11, 2010 #16

    handyguys

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    You may want to factor in more things in your math. What are loan costs, interest fees, taxes, insurance. Its not only being upside down. If you are considering buying, and then selling in 5 years, you might be better off renting.

    What will your mortgage + taxes be? What can you rent for that dollar amount?
     
  17. May 17, 2010 #17

    Wuzzat?

    Wuzzat?

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    Look on the realtor's card to see what professional orgs she belongs to and write to all of them detailing her conduct.
     
  18. May 17, 2010 #18

    So then the Realtor is only worrying about their cut and not about getting you into the right home for your money. I would walk. Find a new Realtor and a new home. It doesn't sound like this is going to work out well for you.
     

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