Hi all, I recently made my first offer. It’s been quite overwhelming so far, but everything seemed to be going smooth until my inspection report yesterday. The “highlights” are copied below. Is this a deal breaker? Should I renegotiate? Or maybe tell the seller that he will need to fix this before I can move forward.
“Knob and tube wiring, older wiring, and exposed splices throughout attic. Ungrounded receptacles throughout the home. Undersized wires and double tapping at the main electrical panel. Electrical in the laundry room.
Recommend home is re-evaluated by a licensed electrician for repairs.”
“S trap plumbing throughout the home underneath sinks. (See Kitchen and Bathrooms) Recommend re-evaluated by a licensed plumber.
-Recommend the receptacles in the kitchen, bathrooms, and exterior are GFCI protected.
-Possible mold or mildew. Recommend tested. (See Office).”
“Siding and trim is damaged / deteriorated throughout. Recommend repairs to reduce moisture damage. (See Exterior) -Toilet leaks when flushed. Recommend repairs. (See Half Bathroom)
-Water heater appears to be actively leaking at the connection. Recommend re-evaluated by a licensed plumber.”
Home details- 1954 with only kitchen and laundry remaining from original structure. Everything else has been added over the years. 27,000 sq ft, seller asked 165k originally, reposted for 145 and we agreed on 135k.
The electrical is my main concern. The plumbing I can handle and I was aware of the exterior damage. It should be an easy fix. But is this a typical report for an older home are is this a deal breaker?
That’s actually 2,700 sq for not 27,000!
This all depends, are you getting for the right price? Can you afford to make the corrections after the closing, if you get it for the right price? If you cannot get the Seller to make corrections before the closing, and you cannot afford to fix after, can they credit you money back at closing? Are some of these really an issue, if the home was built in the 50's and no permits have been pulled, for major renovations, most of these items are grandfathered in by the age of the building. Home inspectors can site things like S-traps, that are not allowed now, but were in the 50's (guess what, if they didn't work, don't you think someone would have changed them by now?). Remember first rule in Real Estate "Everything is negotiable", biggest issue I see, on what you posted would be the electrical, for insurance purposes (call an electrical contractor, or Seven, to see what a ballpark price to re-wire a 2700 sq. ft home would be. Use that to negotiate. Mold or mildew should be tested and source the problem, its usually a simple exterior fix and remediation of the damaged area. I focus on the safety items in inspection reports, you are buying a 60+ year old home, its going to have issues (which are all fixable, as long as the deal makes sense)! Hope this helps.
None of those would be "deal breakers" assuming you have budgeted the costs to fix. Only thing I personally would want to look into prior to closing, would be the electrical. Have a licensed electrician evaluate everything to determine safety/costs to upgrade.
I agree with @Andrew B. , none of this stuff is a deal breaker. If you have a GOOD DEAL I wouldn't worry and move towards closing. Don't bank on the seller fixing anything. I would repair and replace most of this anyways if it's distressed property.
I don't think this is a deal breaker, @Jesse Aaron , it's a negotiation. You definitely want to get an electrician in there. Then lower your offer by 150% of his estimate.
What's the ARV? Are you planning to flip or BRRRR?
The one thing that stuck out to me from the report was "knob and tube wiring." A house from 1954 is very unlikely to have K&T. That was pretty much phased out by the 1940s.
Interesting on he K&t wiring. I wasn’t aware of that. But also consider this is a very rural area. I work for the power company so I can confirm there wasn’t electricity in most of these areas until the late 40’s.
I am actually buying as a permanent residence. I’ve being doing the FIRE thing and living in a mobile home on some family property but we’ve just outgrown it. So my plan is to buy this home (mortgage is $563 per month), rent the mobile home for $700, and eventually sell the home to build a house on the family property.
The electrical just scared the hell out me because I know nothing about electrical. Guess that seems ironic since I work for the power company right 😂.
Thanks for the input. I do however have a little leverage because they already bought a second home out of state. So I think at the least, they would negotiate a discount.
Go for it !!!
That's the type of property we love to tackle & the electrical is the fun part. I have upgraded quite a few electrical systems over the years & I am amazed that a lot of the K&T junction boxes I pulled out, attached to charred studs/joists, never caught fire. My last complete re-wire was >1900 sq ft & I took out every old charred mouse chewed circuit & then upgraded to 200 amps. So I called for a permit.
Me "do I need a permit"
Rural Town bldg inspector "Nope"
Me "But that's dangerous work"
Rural Town bldg inspector "haven't lost anyone yet"
So I proceeded & then had a state inspector sign off on all the circuits & new panel; etc.
I think it ran about $2,400 for all the materials including the weather-head & all ancillary conduit.
BUT build a shed or a deck & you'll need a permit ???
You're getting $30,000 off of list before finding this out, so would you say that the house is the 'fair market value' or below with that initial reduction? If not, then get a couple of electricians to quote the new wiring throughout the home with the permits included in pricing and then ask for half that amount in a reduction or even to be held in escrow specifically for the repairs to let the seller know, 'Hey, this money is for that, promise!'
It's very possible the knob and tube wiring was left in the original part of the house (and it's very possible this house was built earlier than you think). I would be surprised if when they added onto the house they left this knob and tube wiring operational but you would absolutely want to get an electrician to inspect to confirm what is actually going on. But no it's not a deal breaker. Just work it into your numbers.
Something tells me you’re more handy than I am 😂. But in any case, I think the consensus is that it shouldn’t discourage me. Thanks for the input.
@Jesse Aaron Everyone has limits on a real estate transaction. Lots of people of BP have high levels of tolerance for work or adding value by updates. You have to follow your own intuition and level of pain. If it seems like a lot to you, get other contractors out to see work. Share the inspection report and get feedback from experts in those areas (like electrical).
For me, this is all very easy to work with. I've seen a lot so my threshold for pain is much higher. You're asking good questions and it sounds like you're I'm the right track. I agree with what other people on this thread are saying about permits and the credit amount. For me if the Work is limiting the ARV and the seller isn't willing to give more credits or renegotiate then walk away. If the those numbers don't work. There will be other opportunities!