Knob and Tube Insurance Help // Seller repairs

[Pavel Quinane]

Help! Minnesota home purchase at a standstill. 

I have signed a purchase agreement and the electrician's inspection showed that the knob and tube wiring requires $10-$13k in repairs to bring to an insurable condition. Sellers are in their 80s and don't want to oversee the repair prior to closing due to pandemic. They must be grandfathered in with their insurance as if they tried to insure the house in its condition today, they would have to do the repairs first. Is there a way forward with the purchase, where the buyer takes on the repair? The problem I've found is that I won't be able to close on the house without home insurance and noone will insure it in its current condition, given the electricals? Help please!

[Andrew Wicklow]

@Pavel Quinane

You can buy builders risk insurance in order to upgrade the electric and any other repairs you are considering. This will not only satisfy the lender but is actually the correct coverage for a repair of this magnitude. Plus you can do the upgrade and not the sellers. The caveat is the house will need to be vacant during the construction period, which it may be anyway considering it is the electrical service.

Let me know if you have any other questions. I’d be happy to point you in the correct direction.

Andrew