Author Topic: Should we walk away from home purchase  (Read 5783 times)

dandarc

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Should we walk away from home purchase
« on: April 01, 2014, 08:41:37 PM »
So we want to move to cut down our commute.  Found a house we like in a great neighborhood that is much closer to work for both of us.

We're in the inspection period and it just seems that more and more problems are cropping up.  We knew the house needed a roof, and factored that in to our offer, however we keep finding out more things that are wrong that will cost more than we were planning on for repairs:

1.  We were told the place was under termite bond, but the WDO report indicates active infestation that needs to be remedied.  Not sure on cost to remedy - if the place is actually under bond, then the current owners policy should cover it.
2.  The trees - we love the trees.  An arborist thinks 3 big ones and a bunch of the smaller ones need to go to the tune of $5,000.  Getting another bid on this as everyone we know thinks it is high.
3.  Repairs - there's a lot of miscellany.  Will do much of it myself, but a lot of items are outside my depth.  A bit of everything - some wood rot to repair, a couple of electrical items, minor plumbing issues.  Nothing major except for the roof, but I am sure it will all add up when the estimate comes in.

In addition, we want to rip out some carpet and replace with bamboo or cork - we have cats and I am done with the cats tearing up our carpet.

So when do you pull the plug?  We could walk away and just be out inspection fees at this point.  I had it in my head that we could handle 10K in repairs, including the roof (estimate is 4-5k on that), but if we can't find a cheaper tree guy, or the repairs go higher, we're looking at closer to 15 or 20K by the time it is all said and done.

CarDude

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Re: Should we walk away from home purchase
« Reply #1 on: April 01, 2014, 08:45:39 PM »
I've spent too many years looking at poor homes to recommend them. I stopped giving yours a fair shake after I read "active infestation." Not worth it.

lizzzi

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Re: Should we walk away from home purchase
« Reply #2 on: April 01, 2014, 09:10:34 PM »
Location is very important, more so than the house itself, as long as the house is basically OK. I was in the same situation last year--found a suitable house in the location I had my heart set on--a little road with eight houses on it facing a large park with hike/bike trails. The house was not perfect, and I had to put around $6,000 into it immediately after closing. But there was nothing actually noxious--no health or safety issues--and the house had "good bones." It had been neglected by the frail elderly couple who had owned it for 20 years, but it was not junk--it was a good, basic house. I think you have to ask yourself if you can afford to repair the deficiencies in the house you're considering, and also if it will be worth it--or are there issues you would just be more comfortable walking away from.  If it is just too problematical, there will always be another house.

Nords

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Re: Should we walk away from home purchase
« Reply #3 on: April 01, 2014, 09:38:51 PM »
So we want to move to cut down our commute.  Found a house we like in a great neighborhood that is much closer to work for both of us.

So when do you pull the plug?  We could walk away and just be out inspection fees at this point.  I had it in my head that we could handle 10K in repairs, including the roof (estimate is 4-5k on that), but if we can't find a cheaper tree guy, or the repairs go higher, we're looking at closer to 15 or 20K by the time it is all said and done.
You went from "great" to "walk away" in about five paragraphs.  Just how good is the location, how much longer are you likely to be in those jobs, and how likely are you to stay in the house for at least five years (to recover the closing costs)?  So far the location seems to be worth all the downsides.

You're describing the classic "great location, crappy structure" bargain.  I don't know what a WDO is, but when you have the whole home professionally inspected then you can get an idea (or even contractor's estimates) of the repair costs.  (I think trees are also a repair cost.)  You can use the repair estimate to renegotiate the purchase price, and you can do the upgrades at your convenience. 

If this property is in such poor shape, then it's unlikely to be a quick sale... unless the price is drastically lower.

We've made our real estate profits from buying crappy homes in great locations, and then pouring a lot of sweat equity into them.  Otherwise you're going to end up looking for great homes in great locations (unaffordable) or great homes in awful locations (where nobody wants to live).

horsepoor

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Re: Should we walk away from home purchase
« Reply #4 on: April 01, 2014, 09:41:47 PM »
Have you gone back to the sellers with a lower price based on needed repairs?  I think it depends on whether they are willing to play ball or not.  They might come down 10K if they are desperate or it's a high-priced house, for instance.  If they won't budge, and there are other attractive properties for a similar price, there's no reason to stay with this particular deal.

Zamboni

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Re: Should we walk away from home purchase
« Reply #5 on: April 01, 2014, 09:47:05 PM »
The termites are the only cause for any concern; everything else is totally normal.  Find out exactly what is going on there and get a second opinion on it as well:  are they in one board of the deck out back, or is the entire frame about the crumble to the ground?  Then ask for a price reduction if you still want the house.  The seller will have to disclose the new information from the inspection in many states, so unless they are fools who don't want to sell, they will work with you and might come down some.

chasesfish

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Re: Should we walk away from home purchase
« Reply #6 on: April 02, 2014, 04:08:20 AM »
I'm going through this on both sides right now, I had kind of a lousy inspector on the purchase and an overzealous inspector on the selling side

I'd say you have to decide whats important to you and whats not, remembering a home purchase can sometimes be an emotional decision for people.  You should have the option to ask the seller to fix it all or get a lower price.

Cpa Cat

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Re: Should we walk away from home purchase
« Reply #7 on: April 02, 2014, 08:04:11 AM »
Here's the thing: You weren't actually shopping for a fixer-upper.

How many "better" fixer-uppers did you not look at because you weren't shopping for this kind of property?

I don't have a problem with a property that needs a lot of repairs if that's what the buyer is expecting.

You're looking at putting $20k into this house, plus time and effort. And that's what you know about. What kinds of houses would you have been looking at if you'd just raised your budget by $30k? What kinds of houses would you have been looking at if you'd lowered your budget by $30k and been willing to put the work into repairs?

Milspecstache

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Re: Should we walk away from home purchase
« Reply #8 on: April 02, 2014, 08:09:01 AM »
IMO, termite bonds are worthless.  I bought a house with damage that had a termite bond (paid good money to transfer it to myself, maybe around $600?) only to hear the termite company claim the damage was pre-existing prior to the date of their termite bond.  I could perhaps have fought it but didn't have the time/money to deal with them.  So I got them to do an intensive treatment and then canceled the policy.  Never again will I waste money on a bond which depends on a company to honor their warranty.

In my particular instance the damage was about 10' of sill plate that didn't affect structure.  I still have the house as a rental.

skunkfunk

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Re: Should we walk away from home purchase
« Reply #9 on: April 02, 2014, 08:35:08 AM »
So we want to move to cut down our commute.  Found a house we like in a great neighborhood that is much closer to work for both of us.

We're in the inspection period and it just seems that more and more problems are cropping up.  We knew the house needed a roof, and factored that in to our offer, however we keep finding out more things that are wrong that will cost more than we were planning on for repairs:

1.  We were told the place was under termite bond, but the WDO report indicates active infestation that needs to be remedied.  Not sure on cost to remedy - if the place is actually under bond, then the current owners policy should cover it.
2.  The trees - we love the trees.  An arborist thinks 3 big ones and a bunch of the smaller ones need to go to the tune of $5,000.  Getting another bid on this as everyone we know thinks it is high.
3.  Repairs - there's a lot of miscellany.  Will do much of it myself, but a lot of items are outside my depth.  A bit of everything - some wood rot to repair, a couple of electrical items, minor plumbing issues.  Nothing major except for the roof, but I am sure it will all add up when the estimate comes in.

In addition, we want to rip out some carpet and replace with bamboo or cork - we have cats and I am done with the cats tearing up our carpet.

So when do you pull the plug?  We could walk away and just be out inspection fees at this point.  I had it in my head that we could handle 10K in repairs, including the roof (estimate is 4-5k on that), but if we can't find a cheaper tree guy, or the repairs go higher, we're looking at closer to 15 or 20K by the time it is all said and done.

Never make a bad deal just because you like the house. I wish I had walked away from the one I bought, but it is too late for me. Have patience, and do not buy it if the owner will not lower the price to pay for the unanticipated problems.

Better to walk away and regret than to buy and regret. No. There is another.

greenmimama

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Re: Should we walk away from home purchase
« Reply #10 on: April 02, 2014, 08:43:16 AM »
Here's the thing: You weren't actually shopping for a fixer-upper.

How many "better" fixer-uppers did you not look at because you weren't shopping for this kind of property?

I don't have a problem with a property that needs a lot of repairs if that's what the buyer is expecting.

You're looking at putting $20k into this house, plus time and effort. And that's what you know about. What kinds of houses would you have been looking at if you'd just raised your budget by $30k? What kinds of houses would you have been looking at if you'd lowered your budget by $30k and been willing to put the work into repairs?

+1

Frankies Girl

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Re: Should we walk away from home purchase
« Reply #11 on: April 02, 2014, 09:11:09 AM »
Even if you really love the house and location, I'd still walk if they won't lower the asking price to accommodate the amount of money you're looking at having to spend to get it fixed up - so maybe ask them to drop it 25K or whatever feels right?

But if it was me, I'd walk. I wouldn't have an issue with a few things like that, but you're talking a bunch of major issues and it kind of seems to me like I'd be waiting for the next big thing to go wrong after doing that many fix-ups. Roof, trees, termites, electrical, plumbing... sounds like they weren't taking good care and maintaining the property for so many things to "crop up" now.

The tree cost does seem a bit high but I'm not sure how many smaller trees you're meaning; I've had multiple trees (some 60-100 feet) taken down and stumps ground in different parts of the country (central US and SE Gulf area) for around $500-700 a tree on the large ones, and around $250 for the smaller (under 30 foot). As long as you get someone bonded and insured, I'd get some more estimates.


OldDogNewTrick

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Re: Should we walk away from home purchase
« Reply #12 on: April 02, 2014, 10:32:09 AM »
You had me at "active infestation"

Our home inspector missed our infestation in the Florida room. We had to gut the room down to the outerwall stucco, replace studs, headers, wallboard, ceiling. Fortunately, hubby is pretty handy for a sales guy and did all the work himself. Still $3000.00+ in materials. Would have been 10k if we hired a contractor to do it.

I wouldn't.




Forcus

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Re: Should we walk away from home purchase
« Reply #13 on: April 02, 2014, 11:37:27 AM »
I think everyone covered it. The termite deal is certainly the deal breaker, if anything, for me, unless it is extremely limtied (doubtful). I certainly understand the perfect location part. In our area, we narrowed it down to where we wanted to be and we were willing to significantly downgrade the actual house to be there. If there is literally nothing else out there I'd see what the sellers will do. They might need reminded that termites are a Big Deal and they will have to do something about it for ANY buyer (except, I guess, cash). We got lucky, waited a bit longer on pulling the trigger, and found a perfect house in a perfect location. But it took us about 2-3 years of looking to do it.

On the flooring / trim / etc. I always assume I will have to do some replacement, even in a new home. Tastes are different, etc. I wouldn't necessarily count that against any home unless you just happen to find the one that perfectly matches your tastes (unlikely).

On the trees, I can understand that being a bit of a big deal. Hundred year old trees will obviously not grow back any time in your lifetime. The house we are selling really needs 3 big beautiful trees taken down and it will significantly alter the landscape (negatively), so we are leaving them up. It will not look nearly as nice afterwards and there's no real way to mitigate that except time. As far as the quote, it sounds high but if its a tricky area, power lines, hills, etc., and really big trees, I could see it. I think I paid $600 a couple years ago to cut up a downed tree that was 3 feet in diameter and that was without stump grinding. It took 3 guys the better part of a day to remove it.

« Last Edit: April 02, 2014, 11:41:53 AM by Forcus »

dandarc

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Re: Should we walk away from home purchase
« Reply #14 on: April 02, 2014, 12:27:45 PM »
Thanks for all of the good advice!

Rereading the WDO report, the Wood Destroying Organism (WDO) in question is actually a fungus, not termites - no idea if this falls under the prior "termite bond" or not.  Meeting with two other arborists today about the trees - hopefully the price is lower from them.

The difficult thing is that the other houses we saw in our price range / location were just not acceptable to us for one reason or another, or were in even worse shape than this one.  There was one condo that we liked that was move-in ready, but we'd kind of like to not share walls this time around.

I guess we'll wait on the rest of the bids to come in and decide if we want to adjust our offer accordingly.  Seller is already 10K off of asking price, which got us to what we thought would be a fair price knowing about the roof, and accounting for some repairs, but maybe they will come down further.  And there are other houses around, we'll just have to start looking again if it comes to that.

dandarc

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Re: Should we walk away from home purchase
« Reply #15 on: April 02, 2014, 12:33:38 PM »
Oh and on the tree thing - they wanted $2500 for one of the trees, and about $2500 for all the rest combined.  As I haven't seen anything over $1000 here mentioned by anyone for a single tree, I'm thinking this would have to be an extremely difficult tree to take down to justify that price, and these other tree guys would come to the same conclusion.

Sound about right?