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October 9, 2007
Inspection revealed several costly issues- typical to try to negotiate with seller?
We had a pre-contract inspection done and the inspector identified several issues that need addressing ASAP (need new water heater, need to replace lead main piping, need to buy new circuit breaker, need to reconfigure some gas venting). These will likely total around $20k.
Is it typical to work through your lawyer to get the seller to pay these costs? Is that likely to happen, or does it rarely happen? Before I piss off the seller (who has another offer waiting in the wings), I want to understand how much risk I am taking by insisting that he cover these items.
Thank you.
Comments
If the house has been on the market for several months and had no offers you could give it a try. But the seller is unlikely to take off expenses that a new owner would incur doing the basic renovations. Everybody replaces the water heater, we did, everybody puts in a new circuit breaker, we did. The lead main doesn't "need" to be replaced unless it's broken. To do so is the new owner's choice.
The inspector told you these things so you can calculate the costs into everything you'll pay for the house. He's not saying to make the seller pay for your renovations. But like I said you can try.
Posted by: guest at October 9, 2007 8:14 PM
Thank you 8:14. So do most people get this inspection done pre-offer even? What I'm trying to say is that we already have an accepted offer. I would love to just reduce my offer by $20k or so but don't think I can. So I'm just trying to figure out how to recoup these costs, if there is any way at all to do so.
Do most people just deal with the extra costs? $20k seems awfully high.
Posted by: guest at October 9, 2007 8:52 PM
Sorry that post a minute ago was from me- the OP!
Posted by: guest at October 9, 2007 8:53 PM
<-- Agent
In most residential contracts, the SELLER must deliver the premises with HEATING, ELECTRIC, and PLUMBING in working order, and the roof has to be free of leaks, unless the contract specifically states that the buyers is purchasing the property AS-IS.
Just because the seller has other offers, it doesn't mean that the NEXT buyer will accept the house as-is either. The next buyer might find 100K worth of problems, maybe YOUR offer is the best.
Did the sellers lawyer send the contracts to your lawyer yet?? Ask your lawyer if the mechanicals were addressed in the contract.
The water main issue probably will not be addressed by the seller, but the other items probably will be. ASK!
Howard
howard@communityhomesales.com
Posted by: howrealnyc at October 9, 2007 8:54 PM
OP here- thank you Howard- that is very helpful! I will talk to my lawyer about all of this and will ask for the items we feel should be covered. Many thanks!
Posted by: guest at October 9, 2007 9:16 PM
I think it really does depend on the asking price of the house and whether it takes into account the cost of repairs in the first place. Clearly, if you are paying a lower price than other properties, and there truly is someone waiting in the wings, the owner may just say "forget it", I'm selling as is and I'll go to someone else.
However, in NYC, the inspection is often done pre-contract, and it's done to inform the buyer of what repairs s/he might have to make. It is certainly reasonable that a buyer decides after inspection that the cost of all the repairs needed is too high and the buyer has every right to withdraw the offer, or ask the owner to lower the price. (That's why it's usually done pre-contract).
However, if a property is desirable, the owner very likely will say take it as is or leave it. If the request it made reasonably, I don't think the owners will be "pissed off", they would just say no and you have to decide if you want the property despite the high price of repairs.
Posted by: guest at October 9, 2007 10:14 PM
Only ask for money off the purchase price if you are willing to lose the house. And then only ask for a part of that money. But expect none of it. The market is so strong that most sellers won't give money off unless there are major surprises to what the condition of the house is based on how they represented the home; ie: "completely renovated house" shouldn't need immediate emergency repairs, etc.
Also DOB rules on circuit breakers keep changing. They changed again as recently as June, 2007. So I bet most everybody owning a home in Brooklyn has stuff in their electrical system that needs updating to be in compliance with today's code. My contractor who finished our job just recently has to do another round of updates to our electrical panels and various outlets around the house because of these new code changes. And of course this is all for safety reasons and is a good idea. But it's not something that most sellers will offer to pay for you to do. It's an upgrade and they are selling their house in this market, "as is." We are only doing these updates because we have to in order to get our sign-offs.
Ditto for replacing the lead main for the water to the house. Most old homes haven't had this done. It eventually needs doing, but that's up to the buyer if they do it. And it's not an emergency or anything. If you are worried about lead in your drinking water get a filter system or a brita. As for gas line venting, and the other stuff - the prices you get from your inspector usually is much higher than the real cost to you if you hire a plumber or a competitive contractor. So while it could cost you as much as that, it probably won't. Good luck with your purchase.
Posted by: guest at October 9, 2007 10:40 PM
Question: how did the inspector know the lead main wate pipe needs replacing. I've been seeing references to this on the site including someone saying the DEP offers free testing bottles, but I found no reference to that on the DEP site. thx.
Posted by: Brooklynnative at October 10, 2007 12:25 PM
A lead main is a health hazard, but one many people choose to live with.
It will eventually fail and need to be replaced, so plan to replace it.
Posted by: guest at October 10, 2007 12:31 PM
If there is a lead main visible, inspectors always say it needs replacing. That way you can't sue them about it.
There are two issues -- leeching lead and water pressure. For leeching, conduct a test. I believe the City provides you with a kit and will test your samples for free once. As for water pressure, it depends on the diameter of the pipe, whether it has sagged at all (lead is soft) and how much pressure you need (single family two story less of a problem than four story three family house).
We replaced ours because it was a 1/2" pipe and had flattened a bit. Cost us about $5600, which is on the high side because the main unde the street was on the other side of the street.
So, while it is not always necessary to replace, you may want to.
Posted by: slopefarm at October 10, 2007 12:37 PM
I wouldn't let your seller actually make these repairs. If you do get him to agree to do these repairs just reduce the price of the house. Otherwise your seller will get the cheapest water heater known to man, the cheapest guy in the world to replace the water main, the worst electrician etc etc. You want to know this work is done right and a person who is about to sell his house has little incentive to make sure work done on it is done well. Otherwise you will just end up paying someone else to redo all that work.
Posted by: guest at October 10, 2007 4:29 PM
4:29 is right, but this shouldn't be an issue if you are pre-contract,a s OP states. What you are looking for pre-contract is a reduction in the sales price to account for the cost of remedying the defects you found. You don't need to do anything more elaborate. The question is simply whether these are a dealbreaker for you if seller won't reduce the price. Seller is within his/her rights to say that the defects are reflected in the price and OP is within his/her rights to see a reduction. If seller believes soemone else will pay the price without reduction, seller may not budge. If OP must ahve some reduction, OP may need to be prepared to walk. Part of OP's strategy if OP seeks a reduction is to persuade seller that any buyer will want the same reduction.
One issue is whether the same agent is getting the commission for the buyer waiting in the wings (and see archives re phantom buyers waiting in the wings). If the agent on your deal stands to make more money if your purchase goes through than if someone else gets teh contract and there is a different agent involved, the agent on your deal, while representing seller, will propbably try to persuade seller that s/he won't do better with another purchaser.
So find your leverage and use it, but just be receptive to the fact that you might not have as much as you need to get the price down.
Posted by: slopefarm at October 10, 2007 4:58 PM
We actually had this issue when we bought our home. We had an accepted offer, and after the precontract inspection, although there were a number of issues that the inspector mentioned, he insisted that the roof would need to be replaced at a cost of approx 15K. We negotiated down with the seller, but we were still about 10K apart and neither party refused to budge. Although he, too, had "other offers", we approached him again about two weeks later, he came down another 5K and we bought the house. So you can certainly try to negotiate, and though you risk "pissing them off", chances are if they accepted your offer the first time, they'll probably either negotiate or tell you AS IS, unless they perceive you as a "difficult buyer" who may give them problems throughout the whole process (doubt this).
Posted by: guest at October 11, 2007 4:23 PM
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