What is the threshold to walk away because of what the inspection report reveals?

Question

missing Chimney flue liner and missing rain cap; significnt shingle granule loss, missing drip edge flashing, vent pipe flashing missing, cabinet handle missing, siding pieces missing, gutter down spot missing, Old wood/aluminum windows, prior water penetration observed (Efflorescense),

Bill B. · Answer

Ps. Please don’t say my offer was X and now I need new windows and roof (That I could see when I made my offer.) so now I want the same house with new windows and roof for the same price.

Could they get $5-10k more if they listed it with a new roof? (I’d never replace non-leaking windows, just like you wouldn’t on your personal home.)

Try getting an inspection on the home you’re living in right now and then tell me how many of those things you fix within a month or a year.

If you don’t want the house use the list as a reason. If you want the house that list won’t stop you.

Dan H. · Answer

Nothing scares me if the price is right.   However, each item that needs work requires time from me and most have a risk.   For this reason if a new roof is $20k, I need a discount in excess of $20k as I do not work for free (my time is valuable).

Windows and roof, the rest of the items seem minor.   did you notice old windows?   I typically notice before I get out of the car.   On single story properties you can often tell the roof is near end of life by looking at it. Missing siding is typically easy to see unless behind shrubbery or in some other way covered up.

If I was the seller and you were asking for a discount for items that are clearly visible, I would not be too receptive.   Old Windows = no discount.   Roof depends on whether visible and how bad condition it is in.   Missing Siding also depends on how visible but if visible, no discount.

The rest of the stuff a decent handyman addresses in a day.  Probably less than $1k parts & labor.

If you are still in your due diligence you can use these items to get out of the contract but I do not think you should.   Reputation is valuable.   Tarnish a reputation for these items can have unseen consequences.

good luck

JD Martin · Answer

None of that would make me walk away but if I didn't already know some of those things (end of life for roof, for example) I might revisit my offer. It depends on how aggressive my offer was in the first place. Old windows should have been obvious when you walked the house. Missing siding same. The rest of that stuff is piddly except for the roof. We don't let tenants use fireplaces anyway but I would definitely have a cap installed.

Joshua Janus · Answer

This depends on your contract. Here is language in a common contract used for residential transactions in Cleveland.

Marcus Auerbach · Answer

A 50-page inspection report will make you question your life choices. What confuses me is that you have $20 issues mixed with 10,000+ issues. Roof and windows you have probably seen before you wrote the offer, also the missing siding pieces. Were you looking for a project and got it at a decent price?

Karolina Powell · Answer

I'll say the same thing as above - if I got a deal, this would not scare me away.  Additionally, a lot of this should have already been factored into my offer - I can see the state of the windows, gutters, and roof before I make an offer.

Scott Mac · Answer

I think this might be a different answer for everyone

For me for instance it would depend on the actual structure and this is something I could do myself quickly, or would I not not do it myself for some reason  such as fear of Heights, too much grunt work, etcetera ... , or would I have to pay for labor.

The curb appeal of the property, or potential curb appeal.

What amount of rents could I get for the property compared to the amount invested in fix up and purchase.

The location of the property, and the direction I see that area going in as far as valuation increasing or decreasing.

And is this something I would want to have in my portfolio.

And is there something unique about it that renters might find attractive, such as it's in the same block as a 7-Eleven, or the backyard backs up to Burger King parking lot, or something like that.

But I think this decision will be different for everyone, based on their desires, skills, and what they intend to do with the property if they buy it.

Good Luck!

Chris Seveney · Answer

looks like you need new roof and windows. My threshold varies depending on how I thought the condition of the house was. If I went in knowing it was needing a lot of work, most stuff would not scare me, we recently looked at one that appeared to need cosmetic only then found a foundation issue that was $30k, so we walked on that one as the timing to do the repairs would impact our holding costs and seller did not want to fix it.

Allan C. · Answer

Sounds like you just need to get a roofer and solid window guy. Windows are often more expensive than the roof to replace, but I would budget $15-30k for the repairs, depending on size of home. I've had properties where I've chased leaks for years, so Joe's point is a real and common one.

Ying Tang · Answer

@Cliff James I ran your list through ChatGPT, it gave me a price range of $7000-20000+ to fix these. I usually don't walk away unless it's a big issue that will cost too much to fix and very hard to fix (foundation issue for example). Usually I just negotiate the price down.

What is the threshold to walk away because of what the inspection report reveals?

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