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January 19, 2008
Pre-contract inspection revealed several issues- what would you do?
We had a pre-contract inspection done. The inspector identified and line-itemed $87k of issues that need to be fixed, stating some as critical and others as potential. (Heimer Inspectors). The biggest ticket items seem to be:
- old plumbing system- needs update
- old sewer system- needs update
- needs new roof
- stair risers all uneven so we need new stairs
- evidence of leaks in basement which need to be addressed
How does a buyer typically address this with the seller? This is an old home, like almost all homes in Brooklyn- so are these problems customary?
Also, it seems that all old homes would have old sewer and water pipes- does the owner just take the risk that they are not living there when they finally break? Or do most owners try to replace them? And when buyers buy homes that have not been updated as such, do most negotiate this into the price?
Any advice would be appreciated. I'm particularly curious as to what other people do, as some of these items seem to be ones that would surface on any pre-contract inspection of an older home.
Comments
I have never heard of anyone buying a house in Brookyln that did NOT need all this work done! These are very typical items on an average renovation, when buying a house from an older, longtime homeowner. If you buy a full updated house you'll pay more than $87,000 more for the fact those renovations are done. Do try negotiating with the seller to lower the price. But don't feel entitled to the lower price; the seller might very well say "no".
In my first home, I lived with old pipes a couple years before replacing them. No biggie. Have a plumber fix the immediate potential breaks or issues, and you can wait to replace all the plumbing and/or electric. We're replacing electric gradually right now in our current house, not all at once. You do NOT need to remove the walls to replace plumbing and electric. My people did it by making small holes everywhere in the plaster. Contractors here in Brooklyn insist you have to remove all the walls only because it makes their job easier, and they make more money off the job. It's not a necessary thing at all.
Posted by: guest at January 19, 2008 1:19 PM
Thanks 1:19. I did get the feeling that most of these were just normal things that pop up on everyone's list. I just wondered how people typically address them. Do they try to negotiate? Do they not? Etc. Thank you!
Posted by: U510545 at January 19, 2008 1:39 PM
Definitely still attempt to negotiate, especially if you are the only offer so far. Did anyone give you recent comps in the neighborhood to use as a comparison? Ask your realtor or attorney to find some for you, or look on the various websites people reference here, to get that info. Good luck!
Posted by: guest at January 19, 2008 1:50 PM
If you do NOT want a house that needs work, don't buy. If you are willing to put in the time and money to give the place some TLC, use it to negotiate a lower price (unless the place is already priced appropriately for a house that needs work) and plan on making it your own! Good luck.
Posted by: bklyn_girl at January 19, 2008 1:58 PM
If this post is real--and I hope it's not--just this point: Aside from the obvious fact that old houses have old stuff inside them, the inspection is not the time/place to renegotiate unless you discover significant problems that were previously unexpected or concealed. Unless the seller represented to you that the house had been redone with shiny copper pipes, old plumbing does not count.
Posted by: Rehab at January 19, 2008 2:00 PM
Rehab- this post is real. And I agree that there was no misrepresentation. However, this home has been recently gut-rehabbed so we assumed some updating was done (although it hasn't been). I just wanted to know how others addressed these topics when going into contract on a home. I don't find that such an absurd question to ask.
Posted by: U510545 at January 19, 2008 2:08 PM
You should at least be able to get credits/repairs for the roof & the basement leaks. Being that you are pre-contract this is the best time to re-negotiate. Heimer's figures are always way over what you will actually pay for the repairs. I would ask for 10-20k off depending on the price etc. Good Luck.
Posted by: guest at January 19, 2008 2:27 PM
Better yet, ask for 35k off and negotiate from there.
Posted by: guest at January 19, 2008 2:30 PM
Heimer found many similar issues in our house: plumbing, electrical, some rotten joist at the back of the garden floor, and many many other more minor things. Their estimate for repairs was $35000. However I was with the engineer during the inspection, and he thought the house was in pretty good shape, and that those findings were common for a brownstone.
Now whether or not you should use the inspection report as a negotiation tool depends on many factors. We decided not to ask a price reduction, because we thought the price we offered before the inspection was already a good deal and took into account the less than pristine condition of the house. You need to be familiar with comps for similar houses in the neighborhood. Also at this point of the process you should have an attorney involved, and if he has experience with brooklyn brownstones, he may be able to advise you whether or not you can expect a price reduction from the seller. Our attorney thought we were getting an excellent deal and advised not to try negotiating. Also the seller was getting another offer, and we really wanted the house... But keep in mind that this was a year and a half ago, and the market may have changed.
Then after we move into the house, we did not want to do all the work recommended by on Heimer's report, we didn't think it was necessary. We had a good plumber and electrician to look at the house and determine was what truely critical, and we did a few thousands dollars of work. Now, after a coat of paint the house is totally livable, and everything else will be done gradually.
Another thing you need to know is that after you move in the house, you WILL find additional issues that the inspector could not see during a simple visual inspection. But that risk exist for any old house, and is worth taking. Good luck!
Posted by: guest at January 19, 2008 3:33 PM
3:33 Here... I forgot to mention that Heimer tend to significantly overestimate the cost of repairs... Also a new roof is a major issue that we didn't have, you should probably try to negociate something based on that.
Posted by: guest at January 19, 2008 3:40 PM
"this home has been recently gut-rehabbed so we assumed some updating was done (although it hasn't been)"
IMO something is VERY wrong if the seller is representing the house as having been "recently gut-rehabbed" , as the OP states in his/her 2:08 post, and none of this work has been done.
Posted by: Bob Marvin at January 19, 2008 4:35 PM
Come to think of it, this reminds me of the very first Lefferts Manor house I looked at in1974. The broker pointed to the pipes in the celler, which were OBVIOUSLY lead, and proudly said "see--they're all brass." Needless to say, we looked further. The house we bought also had the original lead plumbing, but no one assumed we were fools and tried to misrepresent the situation.
Posted by: Bob Marvin at January 19, 2008 4:41 PM
I agree with Bob--big time. Run, don't walk. If someone has gutted the finishes but not touched mechanicals that are at the end of their useful life, the quality of the 'gut reno' is dubious, at best.
Find a better building.
Posted by: bugleg at January 19, 2008 5:05 PM
I think the technical term for that kind of work, known only to those in the building trades, is "schlock" :-)
Posted by: Bob Marvin at January 19, 2008 6:27 PM
I agree w/Bob Marvin also. If they did a gut rehab w/o updating the important stuff, you don't know what is lurking behind walls and under floorboards. If you stick with this house, negotiate big time. Take into account whether or not the sellers came down on their price when they accepted your offer. If they never used the words "as is" go for it!
Posted by: rh at January 19, 2008 10:27 PM
Okay, well, I guess somebody's claim that a house is "gut-rehabbed" does open the door for a buyer to verify whether it actually was gut-rehabbed.
I reacted the way I did on first post because it seems like lots of buyers try to use trivialities found on inspection to reopen negotiations. Bad idea, if you want the house.
I have to argue that even the cost of a new roof on a brownstone, which is, what, $3K to $5K?, is miniscule when you're paying a million bucks, let alone two million. Not worth screwing up a deal.
Just to keep it in perspective.
Posted by: Rehab at January 20, 2008 1:34 AM
Yes, but fixing the plumbing and electric, after the house is renovated is going to be expensive, isn't it?
Posted by: guest at January 20, 2008 10:22 AM
How could a house that has been renovated, gut or otherwise, need the kind of work you're describing?
Posted by: guest at January 20, 2008 11:41 AM
11:41,
That is exactly the problem. I don't think having the problems the OP pointed out is especially unusual in old houses, but the seller's claim to have done a gut rehabilitation, while leaving the old mechanicals, raises all kinds of red flags.
Posted by: Bob Marvin at January 20, 2008 3:28 PM
Sounds like a small time developer renovation to me. "Gut rehab"...yeah right!
Posted by: guest at January 20, 2008 7:20 PM
OP here - maybe I used the word "gut" too loosely. It has been been renovated and updated- probably primarily cosmetically. The electrical has been updated but beyond that with the mechanicals, it doesn't seem like much has been updated. We are indeed worried about settlement issues on the top floor b/c it has a slant (as in, are they ongoing or are they just settled now at a slant). But we did get this place at a discount and we were told by our lawyer that there is an "all cash offer" waiting in the wings. Now, I don't know whether we can trust this but our lawyer said he was pretty sure there were. Of course for how much we don't know. Anyway, I think we have decided to ask for $10k, to address the roof and basement. We will have to take our chances on the plumbing and sewer, in the knowledge that we will likely have to update them at some point.
Posted by: guest at January 21, 2008 10:16 AM
SO, the seller did NOT claim to have done a "gut rehab."
If that is correct, the issues the OP raises are, more or less, common to most old houses and I, for one, have wasted my time writing about "red flags" that seem not to exist.
No hard feelings towards the OP--buying a house is a nerve wracking process, and having doubts is to be expected.
Posted by: Bob Marvin at January 21, 2008 10:50 AM
I'm thinking about using Heimer Inspectors. Can you tell me what your experience was using them...good/bad/indifferent? Also if you are comfortable sharing what was the cost for the inspection?
I'm looking at several properties in Williamsburg/Greenpoint and really need an excellent inspector.
Thanks in advance!
Dan
Posted by: dgreen at January 21, 2008 9:38 PM
Dan- OP here. Heimer was fine. Seemed to be relatively thorough (but I have no point of comparison really). The report was 80+ pages long and pretty alarmist, but I did follow up with a question to the actual inspector and he explained things more thoroughly (on a particular point). They charged us $855 for a 3 story plus underground cellar.
Thanks to everyone for the comments. As it turns out, we did ask for $10k in what I thought was a very nicely worded email (as in, kindly worded) and the seller's response was "the deal is dead". We have no idea whether he was just looking for an excuse to get out, or what. The agent said he took offense to it b/c of the amount of work he had already done.
So... all things considered, I'm pretty regretful that we asked for anything. And I guess I'm a bit upset at how alarmist that inspection report was, all things considered. If you can read those reports with a strong grain of salt, I would recommend it. WE are first time homebuyers and pretty shocked that we are potentially losing the place over a $10k ASK (we didn't even demand, just asked, nicely, and explained how we were going to eat a bunch of the costs ourselves, yadda yadda).
Anyway, we have the contract so we are signing it tomorrow and hoping he reconsiders once he has a signed contract in hand. But clearly we might lose the place over something very trivial.
I tell this story in the hopes that it might help another couple wondering what to do with the inspection report. Our situation doesn't apply all the time of course, but I guess we are living proof that it really is a gamble. (Incidentally, I do not AT ALL understand how a seller can be soooo emotional that just a request for $10k kills a deal. I suspect there was a backup offer that was more attractive anyway).
Posted by: guest at January 22, 2008 5:20 PM
There's no back-up offer, 5:20. The seller is just a tough negotiator. And it worked. He won. You can sign the contract as you say, OR you could say yourself "Fine, good luck, deal's off. Let us know if you change your mind".
Anybody who has had to negotiate as part of their profession (lawyers, agents, etc) know that the one who wins is the one who threatens to walk away and means it.
The seller might be offended at taking $10,000 off the price but if the house sits on the market another month or two he'd be lowering the price another $10K anyway. Do what makes you feel comfortable though.
Posted by: guest at January 23, 2008 5:46 PM
Sometimes you walk away and the seller says bye bye.
End of story!
Posted by: Ysabelle at January 23, 2008 9:40 PM
No worries OP...on to the next potential purchase. We all learn by doing so no big loss in the long run. Good luck!
Posted by: dgreen at January 27, 2008 10:35 PM
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