Author Topic: Negotiating Property Undercontract - HVAC Issue  (Read 1021 times)

Enough

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Negotiating Property Undercontract - HVAC Issue
« on: July 18, 2017, 12:02:06 PM »
Summary: Under contract to purchase an owner occupant triplex.  Sales price is at a premium which I am O.K. with given how the property was represented (recent gut/rehab, nothing needed, ready to rent, etc.) and that multifamilies in this neighborhood are rarely sold in this condition.  However, the inspector noted that while all HVAC was functional, there may be some performance issues with the HVAC and we followed up with an HVAC contractor inspection.

When the HVAC guy was there, he found that one of the AC units was not working at all (compressor running, but no heat transfer).  He also noted that the lineset sizing was likely too small (1/4" liquid lineset patched into 3/8" at the condenser and evaporator) but did not say for sure that that was the issue.  HVAC inspector turned off the AC given it wasn't doing anything.  So on the inspection response, we didn't specify what needed to be fixed other than that the AC be repaired for that unit.  The sellers realtor then came out, same day, turned it on, and it worked.  Consulting with the AC inspector, he said that it is possible the compressor got hot, and because it was turned off and cooled down, it worked on when restarted, but he didn't provide a reason that it would have gotten hot other than "perhaps" the line set issue.  Lastly, when the HVAC inspector was there it was 80 degrees outside - relatively cool for this time of year and the area. I feel if it fails to cool at 80 degrees it will definitely fail at 100 degrees.  Unit is vacant, so we can't ask an occupant if the AC is working properly on the reg.

Bottom line is I am not sure how to negotiate and complete the repair an intermittent issue that doesn't have a defined cause in the 27 days prior to closing.  Only idea that I have is to negotiate a rough replacement cost of the AC off of the purchase price of the home, but putting myself in the sellers shoes, I wouldn't pay that given that it works at least some of the time.  So how would you proceed?  Also, I have ~24 hours to determine how to handle this.

Other details: home is a Victorian in a historic district, ~4000 sqft, ~130 years old.  The rehab was extensive and, up until we reviewed the HVAC in detail, appeared to be done professionally.  This AC unit with the issue is for the upstairs unit and they routed the lineset through the interior walls to a utility closet in the center of the building - this would make the lineset difficult to replace.  There are no inspection stickers on any of the HVAC units and the metro website shows 'partialpass' on two of the units from 2012 inspections with no detail on what that means.  In the inspection response, I've also requested the inspection stickers or proof of final inspection pass for all 3 new installs.  We have twice requested that the sellers provide any HVAC warranty information but it is likely they went with a budget installer that did not provide a warranty - inquiry still open.
« Last Edit: July 18, 2017, 12:07:26 PM by Enough »

Jon Bon

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Re: Negotiating Property Undercontract - HVAC Issue
« Reply #1 on: July 18, 2017, 02:15:15 PM »
Ask for $1000 call it a day?

I would not ask for a repair, because they are going to do it in the cheapest and usually worst way possible. Ive after for work to be done rather then cash at closing and needless to say I wont be asking for work to be done anymore.

Its also entirely possible the seller just says no, from what it sounds like your market is relatively hot. I think most sellers have some sort of threshold for inspection repairs. If I am selling the house and you want $1000 for a new hot water tank on a 300k house? Fine, sure, here is the money lets close. If you find out all the outlets are ungrounded and you want them grounded for 5-10k, heck no, find somewhere else to live.

As for the undersized line, well your HVAC guy did not tell you what the problem was. He just said it might be this? An undersized line would still work, you might not have the capacity you need. You might need a new HVAC guy before you need new coolant line.

Yeah I'd say ask for some money and see what  happens.

Cwadda

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Re: Negotiating Property Undercontract - HVAC Issue
« Reply #2 on: July 19, 2017, 08:43:57 AM »
Ask them to either make fixes or give a credit back to you. Maybe ask for half of what the cost would be? That seems fair enough.

Enough

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Re: Negotiating Property Undercontract - HVAC Issue
« Reply #3 on: July 21, 2017, 10:40:37 AM »
I agree that asking for cash outside of closing is probably the best path forward.  Still going back and forth about how much.  replacement will likely be $3-5k, going to ask for $2k.

To buy some time, we just asked them to fix it and some other issues, they are having their own inspections and estimates done at the moment..