I am on contract to purchase an investment property in Ohio and the inspection showed the house has knob and tube wiring even though it was built in 1959. I had an electrician go out today to inspect and give me a quote to fix and should receive the report tomorrow.
I talked to several insurance brokers and they both said majority of insurance companies do not provide coverage on homes with knob and tube wiring due to potential fire hazard. There are some that provide coverage but of course the premiums and higher.
I wanted to see if anyone has experience with or owns any properties with knob and tube wiring and what I should do. I will ask the seller for a concession to replace the wiring, which could be $10k-$30k, but I have a feeling they will reject.
My question is do I go forward with purchasing the property and deal with the higher insurance and potential hazard or is it smarter to walk away? Any advise is greatly appreciated on the subject!
If you don't mind having a 'financial bomb' waiting to ignite, go ahead and move forward with the wiring in place. While you might be able to find an insurer who will accept it initially, it's just a matter of time before they cancel the policy; your expense will also be higher.
I recommend making the wiring replacement a contingency - and for it to be completed prior to closing. The seller can pay for it at closing (the title agent will cut the check to the trade to ensure there is no resulting lien) and provide proof of the replacement to the insurance provider.
I've had this done - and the electrical panel will need replacing as well - in both investment properties and my home historical home. I have several quotes in the $20k-$30k range - before finding a 'mom and pop' licensed electrician who did it for $9k. It's laborious, messy - but it was far less damaging/challenging than the photos found on the internet...even with plastered walls.
Skip the financial bomb and deal with it upfront. It has to be done so it might as well be done on your terms and timing.
I am on contract to purchase an investment property in Ohio and the inspection showed the house has knob and tube wiring even though it was built in 1959. I had an electrician go out today to inspect and give me a quote to fix and should receive the report tomorrow.
I talked to several insurance brokers and they both said majority of insurance companies do not provide coverage on homes with knob and tube wiring due to potential fire hazard. There are some that provide coverage but of course the premiums and higher.
I wanted to see if anyone has experience with or owns any properties with knob and tube wiring and what I should do. I will ask the seller for a concession to replace the wiring, which could be $10k-$30k, but I have a feeling they will reject.
My question is do I go forward with purchasing the property and deal with the higher insurance and potential hazard or is it smarter to walk away? Any advise is greatly appreciated on the subject!
Thanks!!
I still have one house with some existing K&T. I have/had no problem getting insurance with it in place. I am in TN. The biggest hazard is generally the insulation falling off and overheating and setting something on fire, or arcing because of insulation gone and having the same issue. If the insulation is in decent shape and not covered by combustible insulation, and not terribly overloaded, it might last many more years. In the one house that I still have some existing, it's only on an overhead light circuit with no insulation around it, and I minimize the load on the circuit by using only low voltage LED lights.
I am on contract to purchase an investment property in Ohio and the inspection showed the house has knob and tube wiring even though it was built in 1959. I had an electrician go out today to inspect and give me a quote to fix and should receive the report tomorrow.
I talked to several insurance brokers and they both said majority of insurance companies do not provide coverage on homes with knob and tube wiring due to potential fire hazard. There are some that provide coverage but of course the premiums and higher.
I wanted to see if anyone has experience with or owns any properties with knob and tube wiring and what I should do. I will ask the seller for a concession to replace the wiring, which could be $10k-$30k, but I have a feeling they will reject.
My question is do I go forward with purchasing the property and deal with the higher insurance and potential hazard or is it smarter to walk away? Any advise is greatly appreciated on the subject!
Thanks!!
It probably also has 60 AMP service, which may be too little for today's appliances. We always replace knob & tube with romex and 200 AMP service. Who knows what new whiz gizmo tomorrow will bring that requires more umph. Also, rats eat knob & tube casing, so be carefull and have the lines inspected. If the lines are aluminum, we ALWAY replace that like we replace lead paint or lead pipes and asbestos ceiling and tile.
I am on contract to purchase an investment property in Ohio and the inspection showed the house has knob and tube wiring even though it was built in 1959. I had an electrician go out today to inspect and give me a quote to fix and should receive the report tomorrow.
I talked to several insurance brokers and they both said majority of insurance companies do not provide coverage on homes with knob and tube wiring due to potential fire hazard. There are some that provide coverage but of course the premiums and higher.
I wanted to see if anyone has experience with or owns any properties with knob and tube wiring and what I should do. I will ask the seller for a concession to replace the wiring, which could be $10k-$30k, but I have a feeling they will reject.
My question is do I go forward with purchasing the property and deal with the higher insurance and potential hazard or is it smarter to walk away? Any advise is greatly appreciated on the subject!
Thanks!!
I still have one house with some existing K&T. I have/had no problem getting insurance with it in place. I am in TN. The biggest hazard is generally the insulation falling off and overheating and setting something on fire, or arcing because of insulation gone and having the same issue. If the insulation is in decent shape and not covered by combustible insulation, and not terribly overloaded, it might last many more years. In the one house that I still have some existing, it's only on an overhead light circuit with no insulation around it, and I minimize the load on the circuit by using only low voltage LED lights.
Knob and tube is very difficult to insure. Under 100amp service - very difficult to insure. Fuse boxes, very difficult to insure, etc.
@Kyler Tarr it's good you haven't had an issue but you also mentioned your property has some knob & tube. Is your insurance aware of it? For instance, if it's a small portion and you indicated during initial intake/application that electrical is updated they wouldn't have any way of knowing. Most inspections are exterior only so insurance is going off of insured/agent application and any visual cues such as an outdated electrical meter.
Also, while it's been difficult to insure these things for many years now it's gotten tighter over the last 5 years in this hard market.
@Kyler Tarr If you terminate this deal I would just keep in mind this issue will come up again if you are looking in cleveland. Across the Midwest markets, this will be a common trend. A lot of homes have knob and tube wiring and plaster walls and most were built in 1900-1940. Usually, when I buy stuff in cleveland I do not replace any electrical wiring
Kyler, call your a couple of insurance companies and get a formal quote so you can take this back to the seller. If they can't agree to your reduction, walk away.
If you don't mind having a 'financial bomb' waiting to ignite, go ahead and move forward with the wiring in place. While you might be able to find an insurer who will accept it initially, it's just a matter of time before they cancel the policy; your expense will also be higher.
I recommend making the wiring replacement a contingency - and for it to be completed prior to closing. The seller can pay for it at closing (the title agent will cut the check to the trade to ensure there is no resulting lien) and provide proof of the replacement to the insurance provider.
I've had this done - and the electrical panel will need replacing as well - in both investment properties and my home historical home. I have several quotes in the $20k-$30k range - before finding a 'mom and pop' licensed electrician who did it for $9k. It's laborious, messy - but it was far less damaging/challenging than the photos found on the internet...even with plastered walls.
Skip the financial bomb and deal with it upfront. It has to be done so it might as well be done on your terms and timing.
Knob and tube has more negatives than most people think, As a GC doing lots of remodels in a old beach town, we replaced a ton of these. I would never leave it in place in any house I owned. I would require that it is replaced or you get a credit before COE. I'd estiamte a pricetag of $20k including panel upograde (although you didn't mention size of house).
Problems below vvvv
*Unsafe modifications are far more common with K&T wiring than they are with Romex and other modern wiring systems.
*The insulation that envelopes the wiring is a fire hazard.
*It tends to stretch and sag over time.
*It lacks a grounding conductor. Grounding conductors reduce the chance of electrical fire and damage to sensitive equipment.
*In older systems, wiring is insulated with varnish and fiber materials that are susceptible to deterioration.
*Compared with modern wiring insulation, K&T wiring is less resistant to damage.
*K&T wiring insulated with cambric and asbestos is not rated for moisture exposure.
*Older systems contained insulation with additives that may oxidize copper wire.
*Bending the wires may cause insulation to crack and peel away.
I am on contract to purchase an investment property in Ohio and the inspection showed the house has knob and tube wiring even though it was built in 1959. I had an electrician go out today to inspect and give me a quote to fix and should receive the report tomorrow.
I talked to several insurance brokers and they both said majority of insurance companies do not provide coverage on homes with knob and tube wiring due to potential fire hazard. There are some that provide coverage but of course the premiums and higher.
I wanted to see if anyone has experience with or owns any properties with knob and tube wiring and what I should do. I will ask the seller for a concession to replace the wiring, which could be $10k-$30k, but I have a feeling they will reject.
My question is do I go forward with purchasing the property and deal with the higher insurance and potential hazard or is it smarter to walk away? Any advise is greatly appreciated on the subject!
Thanks!!
If you can get it out of sight in basement, which shouldn't be too expensive, you are clear with insurance companies. I, my clients, my PM, have never had issues with it
I am on contract to purchase an investment property in Ohio and the inspection showed the house has knob and tube wiring even though it was built in 1959. I had an electrician go out today to inspect and give me a quote to fix and should receive the report tomorrow.
I talked to several insurance brokers and they both said majority of insurance companies do not provide coverage on homes with knob and tube wiring due to potential fire hazard. There are some that provide coverage but of course the premiums and higher.
I wanted to see if anyone has experience with or owns any properties with knob and tube wiring and what I should do. I will ask the seller for a concession to replace the wiring, which could be $10k-$30k, but I have a feeling they will reject.
My question is do I go forward with purchasing the property and deal with the higher insurance and potential hazard or is it smarter to walk away? Any advise is greatly appreciated on the subject!
Thanks!!
If you can get it out of sight in basement, which shouldn't be too expensive, you are clear with insurance companies. I, my clients, my PM, have never had issues with it
It's not (to me) about getting around the Insurance Companies. KT is an ancient and inherently dangerous product. And what about the grounding issues?
If you have contingency time left get 3 quotes to replace and ask for concessions for the highest quote you receive. Send that quote with your concession request. If they refuse, I personally would just walk away.
I am on contract to purchase an investment property in Ohio and the inspection showed the house has knob and tube wiring even though it was built in 1959. I had an electrician go out today to inspect and give me a quote to fix and should receive the report tomorrow.
I talked to several insurance brokers and they both said majority of insurance companies do not provide coverage on homes with knob and tube wiring due to potential fire hazard. There are some that provide coverage but of course the premiums and higher.
I wanted to see if anyone has experience with or owns any properties with knob and tube wiring and what I should do. I will ask the seller for a concession to replace the wiring, which could be $10k-$30k, but I have a feeling they will reject.
My question is do I go forward with purchasing the property and deal with the higher insurance and potential hazard or is it smarter to walk away? Any advise is greatly appreciated on the subject!
Thanks!!
If you can get it out of sight in basement, which shouldn't be too expensive, you are clear with insurance companies. I, my clients, my PM, have never had issues with it
You are not clear with insurance companies by hiding it. You are required to disclose knob and tube wiring to insurance companies. If the place burns down (which it very well could because K&T is a big fire hazard), and the insurance company finds out you didn't disclose there was active K&T, they will certainly deny the claim. I'm not sure about the potential for liability in a wrongful death suit if somebody is injured or killed in the fire, but definitely would not want to find out personally, nor would I want to live with that on my conscience.
I am on contract to purchase an investment property in Ohio and the inspection showed the house has knob and tube wiring even though it was built in 1959. I had an electrician go out today to inspect and give me a quote to fix and should receive the report tomorrow.
I talked to several insurance brokers and they both said majority of insurance companies do not provide coverage on homes with knob and tube wiring due to potential fire hazard. There are some that provide coverage but of course the premiums and higher.
I wanted to see if anyone has experience with or owns any properties with knob and tube wiring and what I should do. I will ask the seller for a concession to replace the wiring, which could be $10k-$30k, but I have a feeling they will reject.
My question is do I go forward with purchasing the property and deal with the higher insurance and potential hazard or is it smarter to walk away? Any advise is greatly appreciated on the subject!
Thanks!!
The last electrician who was competent at splicing knob and tube wiring connections died in 1984. Kind of kidding, but not really. The stuff is sketchy.
The good news is that this is the perfect hidden health and safety inspection item with which to negotiate a price reduction. Get some quotes to update the electrical system and ask for that off the purchase price. I just did a deal like this and the buyer's insurance gave her a policy as long as she agreed to fix the K&T within 60 days which she is doing now.
If the seller refuses to discount the price or fix it, I'd walk. They'll have the same issue with the next buyer and you can always come back in a few months and make them a much lower offer once the property has fallen out of contract a few times and they are extra motivated to sell.
I am on contract to purchase an investment property in Ohio and the inspection showed the house has knob and tube wiring even though it was built in 1959. I had an electrician go out today to inspect and give me a quote to fix and should receive the report tomorrow.
I talked to several insurance brokers and they both said majority of insurance companies do not provide coverage on homes with knob and tube wiring due to potential fire hazard. There are some that provide coverage but of course the premiums and higher.
I wanted to see if anyone has experience with or owns any properties with knob and tube wiring and what I should do. I will ask the seller for a concession to replace the wiring, which could be $10k-$30k, but I have a feeling they will reject.
My question is do I go forward with purchasing the property and deal with the higher insurance and potential hazard or is it smarter to walk away? Any advise is greatly appreciated on the subject!
Thanks!!
I still have one house with some existing K&T. I have/had no problem getting insurance with it in place. I am in TN. The biggest hazard is generally the insulation falling off and overheating and setting something on fire, or arcing because of insulation gone and having the same issue. If the insulation is in decent shape and not covered by combustible insulation, and not terribly overloaded, it might last many more years. In the one house that I still have some existing, it's only on an overhead light circuit with no insulation around it, and I minimize the load on the circuit by using only low voltage LED lights.
JD your one K&T light circuit with an LED light is a much different scenario than a whole house still on K&T. Old skool K&T systems are simply not designed for the electrical loads that houses have today. I don't think any insurance carriers will give you a new policy these days if there is active K&T.
I am on contract to purchase an investment property in Ohio and the inspection showed the house has knob and tube wiring even though it was built in 1959. I had an electrician go out today to inspect and give me a quote to fix and should receive the report tomorrow.
I talked to several insurance brokers and they both said majority of insurance companies do not provide coverage on homes with knob and tube wiring due to potential fire hazard. There are some that provide coverage but of course the premiums and higher.
I wanted to see if anyone has experience with or owns any properties with knob and tube wiring and what I should do. I will ask the seller for a concession to replace the wiring, which could be $10k-$30k, but I have a feeling they will reject.
My question is do I go forward with purchasing the property and deal with the higher insurance and potential hazard or is it smarter to walk away? Any advise is greatly appreciated on the subject!
Thanks!!
If the electrician’s quote for replacement is reasonable, it might be worth negotiating with the seller for a concession or price reduction. Point out the insurance hurdles could help your case. If they reject the concession and the replacement costs eat too much into your margins, it might be smarter to walk away unless the property has other strong advantages.
I’d also weigh the long-term costs. Even if you can find insurance now, premiums will likely remain high, and resale value could be impacted unless the wiring is updated. It’s worth calculating the total investment (purchase price + wiring replacement) and comparing it to what the property could yield after the upgrade. If it doesn’t make financial sense or feels too risky, there’s no shame in passing on this one.
Lots of great responses on here. I'd say, if you can renegotiate the purchase price and get the knob and tube replaced I'd recommend it. If you are going to have this asset for a long time it'll be worth the peace of mind knowing its updated. You renters will also appreciate it.
@Kyler Tarr I have had to remove all K&T wiring because my insurance company will not cover it. I have even had to remove the skeletal remains of disconnected K&T that was totally cut and not in use due to my insurance company wanting all existing components whether functional or disconnected to be removed.
There are hundreds of other deals available. If the Seller will not reduce the price to where it still makes sense to you then do not do this deal.
If it’s a good enough deal you may not require a full 100% reduction by the amount of the estimate. Sometimes I am willing to put some of my money in because the deal is just that good. Only you can determine this.
I don't care if 99 of 100 homes in the area have K&T, I would NOT buy it and leave it with K&T anywhere. Period, full-stop, no exceptions.
So onto the deal and how to navigate it.
You should have a MAO to this deal. Your maximum allowable offer.
If not, then you got into this way wrong from the get-go, and get that MAO sorted now.
Next, I'd get my electrician in there STAT to give me there quote to get it done. maximum scope, account for all variables, not a "hopefully it's just..." NO, I want the "guaranteed it won't be more than.." number.
So yeah, I actually get 2 quotes. Our best case which I keep to myself, and our worst case which is fully written up official quote yada-yada.
Next Step:
With with sparkies quote, I'd get that quote over to sellers and with an amendment all written up ready for there signing giving me a credit at closing for exactly that amount.
Negotiation tip #47, make it as simple as possible for the other party to accept your terms. No verbal talkie-talk on it, no, send it over WITH the amendment for them to sign.
I make sure there agent get's the inspection and quote reports with all this because this "mother fk's" them. I call it that because most commonly the listing agents call me and says "you mother f...." to me in response, lol.
Because now, legally, they have to disclose that if this all falls out. Because it's a material fact to them. Specifically, the cost to have it corrected is now a known material fact.
Now knowing my MAO, if they counter, I just look to that MAO, does the deal still make sense?
If no, I tell em no. Simple.
And depending how it goes down, maybe I counter there counter just for the fun of the sport, all depends. (yeah, maybe I shouldn't be broadcasting my sick twisted forms of entertainment and strategy should I)
BUT, most importantly is KNOW YOUR MAO and follow the math.
If it does not fit, you must aqui.... I mean walk away, if it doesn't fit walk away.
Keep it simple. No emotions just business. The moment you get emotional on any property you should run away not walk. No place for emotions in negotiations.
I am on contract to purchase an investment property in Ohio and the inspection showed the house has knob and tube wiring even though it was built in 1959. I had an electrician go out today to inspect and give me a quote to fix and should receive the report tomorrow.
I talked to several insurance brokers and they both said majority of insurance companies do not provide coverage on homes with knob and tube wiring due to potential fire hazard. There are some that provide coverage but of course the premiums and higher.
I wanted to see if anyone has experience with or owns any properties with knob and tube wiring and what I should do. I will ask the seller for a concession to replace the wiring, which could be $10k-$30k, but I have a feeling they will reject.
My question is do I go forward with purchasing the property and deal with the higher insurance and potential hazard or is it smarter to walk away? Any advise is greatly appreciated on the subject!
Thanks!!
I always replace the boxes with 200 AMP. There is going to be some if not all knob and tube wiring in almost all of the 100 year old houses in Cleveland. Don't spend 20k+ rewiring a whole house that is insanely expensive.
