Greeting Mustachians,
I hope your collective wisdom can help me decide how to proceed in this scenario. My gf and I have made an offer on a home that was accepted. We are in the midst of our due diligence period and inspections have revealed some unexpected issues. Our realtor is of the opinion that these are typical considering the age and price of the home (built 1930). Nonetheless, they are additional expenses we will need to pay out of pocket.
The numbers:
Price: $92,000
Down Payment: 20% $18,400
Payment: $646/month. 15 year fixed, 3.375%, P and I of $522, taxes $85/month, insurance $40/month (estimated)
Our current rent: $850/month
Est. Closing Costs: $0 (sellers are paying up to $3k, doubt closing costs will go over that).
The damage:
Termite damage to the supports in the crawlspace- This is the first issue. The sellers treated the home to kill the active termites, we had a contractor take a look at it, and the repair was estimated at $3,600. The sellers refused to cut the price or contribute towards the repairs.
Various electrical and plumbing issues- This came up in the general inspection that was recently performed. An electrician has taken a look and estimated it will cost about $1k to fix some electrical issues (wires hanging around in the crawl space and attic being the bulk of it). We also believe the gas furnace unit would need to be replaced, which could be an additional $1k-$2k. The water heater likely needs replacement, (another $1k?). So potentially something like $8k in repairs, not all of which need to necessarily be completed immediately after purchase (water heater could last a while) but probably all need to be completed in the first six months to one year.
As I said, our realtor believes these are pretty normal issues, and certainly this house is on the cheaper side of the area we are looking in (Durham NC). Given that the sellers have already expressed unwillingness to compromise on the price, what do you think we should do? I currently oscillate between 3 modes of thought:
1. It's a great deal! We'll save $200/month vs our rent AND be building almost $300/month in equity! The sellers are paying all closing costs! Suck it up and pull the trigger!
2. Run away! Why buy a house only to sink $10k into repairs right away?
3. Play hardball! Make some offer like "Take $5k off the price or we walk." Then presumably be willing to walk.
Other stuff:
We plan to stay here for at least 3 years, possibly longer. We are into this about $1,200 so far (inspections and due diligence money) so that is what we lose if we walk (but it's a sunk cost and shouldn't make our decision for us). We have more than enough in liquid moolah to cover these repairs. Still, no one likes shelling out a bunch of money. The house is a similar commute for both of us to our current location.
Any and all advice is appreciated.