house questions - owner's responsibility or me as the potential buyer?

[rh71]

I just got my potential home inspected... going into contract in a few days. The owner isn't aware of the findings yet. Obviously it's too late in the day to ask my lawyer, so I wanted to clarify with you guys (I just need to know now).

1) Oil tank removed from being buried undergound - now there's a silver-tank with a lid left from above where the tank is. I believe a permit is required for this remaining object. If the owner doesn't have a permit, will THEY need to get one or can they even tell me I can apply for the permit after I buy the house? I'm concerned about the town asking me to get rid of it (I'll have to pay out of my own pocket).

2) Electrical outlets (for most of the house) aren't grounded. Must they ground them before selling the house to me? The owners' father-in-law is an electrician and perhaps he did the shotty job. Is it in my right to make them ground all wires before I purchase?

Thanx.

 

[T2T III]

I think the two cocerns that you listed are quite minimal. I'd certainly have something placed in the contract that both items need to get resolved prior to the settlement on the house. Let's look at it another way: Consider that you buy the house without the outlets being grounded, but intend to get the issue resolved during the first few weeks that you occupy the house. Then, a few days after you move in, there's a fire. You're the owner, you're responsible. I'd ensure that the issues get resolved before you move in the place.

If the owners don't want to resolve the two issues, then go for a price concessions on the house. Get some estimates of what it would cost to remove the fuel tank and ground all of the outlets - then, get the owner to reduce the price by that amount.

However, if I were you, I would ensure the owner takes care of both issues rather than you having to arrange to get it done - even if they provide the price concession. Also, I'd have something placed in the contract that the owner of the house will pay to have the house re-inspected prior to the closing to ensure the issues have been resolved.

 

[EagleKeeper]

Contact the local town building inspector regaring the codes.

They should be able to let you know right away the answers to both questions.

If the house needs to be brought up to code, the safety issue is also a concern.
Grounding should be done before closing. Who pays for it is up for negotiation.

 

[rh71]

Will do so tomorrow. Thanx. Any more advice ?

 

[UltraQuiet]

rh71- It's all well and good that you had the house inspected. Very smart move on your part. However the owners aren't responsible for anything that isn't clearly defined in the contract. I sold a house last year and the people who bought it had it inspected. The inspector was very thorough and made out a 15 page report which they stapled to an offer sheet saying that it all had to be corrected. I'm still laughing. I agreed to correct one thing on the report and the things the VA said had to be done (city water, GFI outlet) and we signed a contract. I had to have proof that those things had been done at the closing and we sold the house.

Bottom line-- if it wasn't on the offer sheet you both signed or in the contract, he isn't responsible.

 

[HomeBrewerDude]

Originally posted by: wje
I think the two cocerns that you listed are quite minimal. I'd certainly have something placed in the contract that both items need to get resolved prior to the settlement on the house. Let's look at it another way: Consider that you buy the house without the outlets being grounded, but intend to get the issue resolved during the first few weeks that you occupy the house. Then, a few days after you move in, there's a fire. You're the owner, you're responsible. I'd ensure that the issues get resolved before you move in the place.

If the owners don't want to resolve the two issues, then go for a price concessions on the house. Get some estimates of what it would cost to remove the fuel tank and ground all of the outlets - then, get the owner to reduce the price by that amount.

However, if I were you, I would ensure the owner takes care of both issues rather than you having to arrange to get it done - even if they provide the price concession. Also, I'd have something placed in the contract that the owner of the house will pay to have the house re-inspected prior to the closing to ensure the issues have been resolved.

I disagree.

As the buyer YOU want to make sure the house is updated the way you want it updated. That means you have to protect your 'right to cure'. That should of been laid out in the offer to buy, which I assume you already have in place since you have gone to the expense of getting the house inspected. Don't ever waive your 'right to cure'. Otherwise, the seller can fix it any old way, including having his father in law muck around with the wiring.

The thing I believe you should do is:

1) check with the city code concerning the tank issue. If you are going to have to remove the structure to get the house up to code then you can get an estimate for how much that will cost and ask the seller to deduct that amount.

2) have an electrician inspect and provide an estimate to get the electrical up to code. You box might very well be 60 amps, which isn't enough to power a modern house. That estimate should include the cost to upgrade the outlets to grounded (THAT could be very expensive depending on the type of wiring in the home. Again, ask the seller to deduct the amount that work will cost.

Another option for you is to ask the seller to credit you a dollar amount at closing. This amount will be applied to your closing costs, allowing you to reduce the amount of money you have to lay out to get into the house, giving you more money to fix the house up.

Good luck!


EDIT: BTW, the seller will most likely renegotiate with you if you are being reasonable especially if your inspection has revealed DEFECTS (i.e. items in need of repair). A seller must disclose all known defects, so no matter who he sells to, he will have to somehow justify not repairing the defects identified with your inspection.

 

[dman]

You got an inspection done which is good...

Other Suggestions:

Before going to contract:
- Find out what other homes sold for comparable around there BEFORE making your offer.
- Drive by the 'hood at night (After dark but not too late) and park. Get out and walk around the block, get a feel for what's happening. Do it on the weekend too if you can.
- See if you can make an appt to visit the house at night. Go around and turn on the lights and take a look at the walls and ceilings in the different lighting (Vs. daytime). Turn off all the lights, see which ones are convenient or not.
- Bring a woman friend who's not afraid to examine the kitchen and bathrooms. Pay close attention to the orientation of the cabinets and how they are laid out. Be nosey and look inside them, see how 'crowded' they are.

- Drive by one morning and do your commute to work during rush hour from that house. See what it's like.
- If you get a chance check the 'hood out when it's raining OR talk to someone nearby who can tell you if there are any drainage probs (for the commute OR the neighborhood).
- Drive (and time -- don't just assume it's close enough) to the grocery store and walmart, target, homedepot, compusa, best buy, fastfood places, dinner places.



Soon:
- Read AND understand the terms of your contract and know what options you have to break it should their be a problem out of your control.
- Find out what the HO Insurance cost is ahead of time.
- Find out what the Taxes are and then remember you'll have to adjust upwards for the price you paid (out of your escrow account most likely but might be more than you expected-- if they've been paying 'em for 20yrs and you buy the house for double what they paid the taxes are going to be double too).
- Be prepared to spend $1000/mo for a few mo's @ Home Depot and appliance stores fixing stupid little crap that shouldn't cost that much.
- Remember to switch over the water, electric, postal, cable, telephone before closing for the closing date.

After Closing:
- Enjoy the fact you own your home, well, in 15-30yrs you do. At least you can (probably) deduct the interest from your taxes.


Congrats!

 

[HomeBrewerDude]

Are you doing this without a realtor? And is this your first house? In the U.S.?

I don't know what you mean by going to contract... I assumed earlier that you meant closing.

Now I think you mean that you are going to make an OFFER.


When you make an offer, you can build in stipulations and contingencies.

Usually, people include an Inspection Contingency. This means the buyer can try to renogiated the price given the results of the inspection. Another common contingency is a financing contingency which means that if you can't get financing, the seller has to give back your earnest money. This is where a buyers realtor can come in handy, or possibly your lawyer.

 

[rh71]

Originally posted by: DaveSohmer
rh71- It's all well and good that you had the house inspected. Very smart move on your part. However the owners aren't responsible for anything that isn't clearly defined in the contract. I sold a house last year and the people who bought it had it inspected. The inspector was very thorough and made out a 15 page report which they stapled to an offer sheet saying that it all had to be corrected. I'm still laughing. I agreed to correct one thing on the report and the things the VA said had to be done (city water, GFI outlet) and we signed a contract. I had to have proof that those things had been done at the closing and we sold the house.

Bottom line-- if it wasn't on the offer sheet you both signed or in the contract, he isn't responsible.

There hasn't been a contract drawn up yet. Our 2 lawyers have not talked specifics and they will do so later this week. Inspector's full report can be faxed to my lawyer within 2 days. We made our offer to the sellers before doing the house inspection (very normal around here, I don't know about you guys). The inspection was basically for our peace of mind and we'd try and adjust the price of the house should we find anything major - which we don't believe we have. So I'm just asking about the minor stuff and who's responsible for what - in your opinions.

 

[rh71]

Originally posted by: yamahaXS

Originally posted by: wje
I think the two cocerns that you listed are quite minimal. I'd certainly have something placed in the contract that both items need to get resolved prior to the settlement on the house. Let's look at it another way: Consider that you buy the house without the outlets being grounded, but intend to get the issue resolved during the first few weeks that you occupy the house. Then, a few days after you move in, there's a fire. You're the owner, you're responsible. I'd ensure that the issues get resolved before you move in the place.

If the owners don't want to resolve the two issues, then go for a price concessions on the house. Get some estimates of what it would cost to remove the fuel tank and ground all of the outlets - then, get the owner to reduce the price by that amount.

However, if I were you, I would ensure the owner takes care of both issues rather than you having to arrange to get it done - even if they provide the price concession. Also, I'd have something placed in the contract that the owner of the house will pay to have the house re-inspected prior to the closing to ensure the issues have been resolved.

I disagree.

As the buyer YOU want to make sure the house is updated the way you want it updated. That means you have to protect your 'right to cure'. That should of been laid out in the offer to buy, which I assume you already have in place since you have gone to the expense of getting the house inspected. Don't ever waive your 'right to cure'. Otherwise, the seller can fix it any old way, including having his father in law muck around with the wiring.

The thing I believe you should do is:

1) check with the city code concerning the tank issue. If you are going to have to remove the structure to get the house up to code then you can get an estimate for how much that will cost and ask the seller to deduct that amount.

2) have an electrician inspect and provide an estimate to get the electrical up to code. You box might very well be 60 amps, which isn't enough to power a modern house. That estimate should include the cost to upgrade the outlets to grounded (THAT could be very expensive depending on the type of wiring in the home. Again, ask the seller to deduct the amount that work will cost.

Another option for you is to ask the seller to credit you a dollar amount at closing. This amount will be applied to your closing costs, allowing you to reduce the amount of money you have to lay out to get into the house, giving you more money to fix the house up.

Good luck!


EDIT: BTW, the seller will most likely renegotiate with you if you are being reasonable especially if your inspection has revealed DEFECTS (i.e. items in need of repair). A seller must disclose all known defects, so no matter who he sells to, he will have to somehow justify not repairing the defects identified with your inspection.

There was no offer-to-buy statement written. This is a for-sale-by-owner property and everyone was bidding verbally. I made him sign something (of my own creation) stating he would reimburse me should he not choose to sell to me after I send in an inspector. It's good to know about the "right to cure", but since nothing of the sort has been laid out at this stage (pre-contract), can we pull this trick now via our lawyer if they choose not to "fix" the minor 2 things I listed?

Disclosing all defects... is this the case for a for-sale-by-owner or only with a real estate agent (they only disclose as part of having agents do the sale) ?

 

[rh71]

Originally posted by: yamahaXS
Are you doing this without a realtor? And is this your first house? In the U.S.?

I don't know what you mean by going to contract... I assumed earlier that you meant closing.

Now I think you mean that you are going to make an OFFER.


When you make an offer, you can build in stipulations and contingencies.

Usually, people include an Inspection Contingency. This means the buyer can try to renogiated the price given the results of the inspection. Another common contingency is a financing contingency which means that if you can't get financing, the seller has to give back your earnest money. This is where a buyers realtor can come in handy, or possibly your lawyer.

Yes our first house, with the help of parents advice (they have a property about 5 minutes away bought in 1986). We made them a VERBAL offer without stating the possibility of any contingencies. They knew we would bring in an inspector. I guess all this would be the true benefits of having a real estate agent handle it... but this is - for-sale-by-owner. Our lawyers will talk, but I feel confident since nothing has been written in stone yet. The sellers are closing on their own house tomorrow so they are eager to sell and I'm the only one they want to deal with at this point. Again, we've made an offer, contract will be written up for us to sign in a few days... after I submit the inspector report to my lawyer.

 

[rh71]

Originally posted by: dman6666
You got an inspection done which is good...

Other Suggestions:

Before going to contract:
- Find out what other homes sold for comparable around there BEFORE making your offer.
- Drive by the 'hood at night (After dark but not too late) and park. Get out and walk around the block, get a feel for what's happening. Do it on the weekend too if you can.
- See if you can make an appt to visit the house at night. Go around and turn on the lights and take a look at the walls and ceilings in the different lighting (Vs. daytime). Turn off all the lights, see which ones are convenient or not.
- Bring a woman friend who's not afraid to examine the kitchen and bathrooms. Pay close attention to the orientation of the cabinets and how they are laid out. Be nosey and look inside them, see how 'crowded' they are.

- Drive by one morning and do your commute to work during rush hour from that house. See what it's like.
- If you get a chance check the 'hood out when it's raining OR talk to someone nearby who can tell you if there are any drainage probs (for the commute OR the neighborhood).
- Drive (and time -- don't just assume it's close enough) to the grocery store and walmart, target, homedepot, compusa, best buy, fastfood places, dinner places.



Soon:
- Read AND understand the terms of your contract and know what options you have to break it should their be a problem out of your control.
- Find out what the HO Insurance cost is ahead of time.
- Find out what the Taxes are and then remember you'll have to adjust upwards for the price you paid (out of your escrow account most likely but might be more than you expected-- if they've been paying 'em for 20yrs and you buy the house for double what they paid the taxes are going to be double too).
- Be prepared to spend $1000/mo for a few mo's @ Home Depot and appliance stores fixing stupid little crap that shouldn't cost that much.
- Remember to switch over the water, electric, postal, cable, telephone before closing for the closing date.

After Closing:
- Enjoy the fact you own your home, well, in 15-30yrs you do. At least you can (probably) deduct the interest from your taxes.


Congrats!

Good suggestions. I was raised in the next town and am familiar with the area. We've been to this property at night as well. We're offering a good ballpark figure for the property, in this condition (nassau county, LI homes are RIDICULOUSLY inflated/inflating). I made the commute to work today from the property after the inspection and it was just as expected.

As for the switch-overs of the utilties, etc... we won't be moving in right away (we live close enough to afford the time)... so I suppose we can do this whenever. Thanx for the reminder.

 

[HomeBrewerDude]

Originally posted by: rh71

Originally posted by: yamahaXS
Are you doing this without a realtor? And is this your first house? In the U.S.?

I don't know what you mean by going to contract... I assumed earlier that you meant closing.

Now I think you mean that you are going to make an OFFER.


When you make an offer, you can build in stipulations and contingencies.

Usually, people include an Inspection Contingency. This means the buyer can try to renogiated the price given the results of the inspection. Another common contingency is a financing contingency which means that if you can't get financing, the seller has to give back your earnest money. This is where a buyers realtor can come in handy, or possibly your lawyer.

Yes our first house, with the help of parents advice (they have a property about 5 minutes away bought in 1986). We made them a VERBAL offer without stating the possibility of any contingencies. They knew we would bring in an inspector. I guess all this would be the true benefits of having a real estate agent handle it... but this is - for-sale-by-owner. Our lawyers will talk, but I feel confident since nothing has been written in stone yet. The sellers are closing on their own house tomorrow so they are eager to sell and I'm the only one they want to deal with at this point. Again, we've made an offer, contract will be written up for us to sign in a few days... after I submit the inspector report to my lawyer.

How much earnest money have you put down? If you haven't put any money down, then the seller has NO leverage. You can just break the contract.

Since you don't have anything in writing, you will be okay regardless.

Get estimates to fix those major things BEFORE you sign the "offer to buy". Use those estimates as leverage and get the seller to reduce his asking price (OR credit you the amount at closing - you float the amount on your mortage, but if you are tight on cash you will be able to get that stuff fixed up asap).

BTW, you might be able to ground those outlets yourself. Home Depot WIRING 1-2-3 is a pretty good book.

 

[mithrandir2001]

Originally posted by: DaveSohmer
rh71- It's all well and good that you had the house inspected. Very smart move on your part. However the owners aren't responsible for anything that isn't clearly defined in the contract. I sold a house last year and the people who bought it had it inspected. The inspector was very thorough and made out a 15 page report which they stapled to an offer sheet saying that it all had to be corrected. I'm still laughing. I agreed to correct one thing on the report and the things the VA said had to be done (city water, GFI outlet) and we signed a contract. I had to have proof that those things had been done at the closing and we sold the house.

Bottom line-- if it wasn't on the offer sheet you both signed or in the contract, he isn't responsible.

I opted to have my home inspected before closing. My offer was already accepted but the contract I signed said that I could revoke it based on the outcome of the housing inspection. The inspection found problems - of course - and I told the seller they had to fix 4 of the "biggest" items. This included replacing the heat pump because it had signs of vandalism damage, replacing the patio door because the seals were shot, unclogging the bathtub drain and removing the satellite dish from the roof. I thought that had to do these things but apparently I was wrong, much to my chagrin. I suppose I had the ability to just walk away at that point and get all my money back but the seller knew I probably wasn't going to do that since there's a housing shortage here. I basically negotiated a $1300 credit for these inspection items. The heat pump and patio door cost me $5600 to replace (I went the premium route). The owner unclogged the drain and the dish remains on the roof.

The silver lining is that I paid $132,000 for my house in April (before $1300 concession) and I had my home reassessed last month for $140,000 (because I refinanced).

 

[rh71]

Originally posted by: yamahaXS

Originally posted by: rh71

Originally posted by: yamahaXS
Are you doing this without a realtor? And is this your first house? In the U.S.?

I don't know what you mean by going to contract... I assumed earlier that you meant closing.

Now I think you mean that you are going to make an OFFER.


When you make an offer, you can build in stipulations and contingencies.

Usually, people include an Inspection Contingency. This means the buyer can try to renogiated the price given the results of the inspection. Another common contingency is a financing contingency which means that if you can't get financing, the seller has to give back your earnest money. This is where a buyers realtor can come in handy, or possibly your lawyer.

Yes our first house, with the help of parents advice (they have a property about 5 minutes away bought in 1986). We made them a VERBAL offer without stating the possibility of any contingencies. They knew we would bring in an inspector. I guess all this would be the true benefits of having a real estate agent handle it... but this is - for-sale-by-owner. Our lawyers will talk, but I feel confident since nothing has been written in stone yet. The sellers are closing on their own house tomorrow so they are eager to sell and I'm the only one they want to deal with at this point. Again, we've made an offer, contract will be written up for us to sign in a few days... after I submit the inspector report to my lawyer.

How much earnest money have you put down? If you haven't put any money down, then the seller has NO leverage. You can just break the contract.

Since you don't have anything in writing, you will be okay regardless.

Get estimates to fix those major things BEFORE you sign the "offer to buy". Use those estimates as leverage and get the seller to reduce his asking price (OR credit you the amount at closing - you float the amount on your mortage, but if you are tight on cash you will be able to get that stuff fixed up asap).

BTW, you might be able to ground those outlets yourself. Home Depot WIRING 1-2-3 is a pretty good book.

No money down at all... so far our only commitment to the house has been the $420 for my inspector. The seller said that (and signed for reimbursement) if I use any money toward his house, he will consider me a serious buyer and will stop showing the house. Well the ad doesn't appear in the paper anymore and the for-sale sign isn't on the front lawn anymore... but he always has his backup offers (which we supposedly outbid). They played games with us and subsequently, we gave them $2k more than what we wanted... but I wanted the house bad enough to throw it in. Let's hope that they will go with the fixes themselves without much hassle. If I feel I bargained them out of money, then I wouldn't mind doing it myself.... but I mean, I gave them what they wanted... I should get an all-working-condition home.

I will definitely go with the estimates if they say they won't fix it themselves.

 

[Ly2n]

I believe that the tank would be the sellers responsibility, a complettion of the original tank removal. However the electrical problem is another case. If the house has a CO, the electical passed whatever codes existed at the time, therefore it is not a defect. If a fire started, your insurance woul cover you. Since you don't have a purchase offer in, you could try to reduce the price. And depending on how badly the seller wants to sell, they might help pay some of the cost for the upgrade. Since they will have a lawer there, I'm sure that the lawer will tell them that it isn't their responsibilty. At this point in time you can try anything, just don't expect to get away with it. Lynn

 

[amdskip]

Just make sure you don't pay them anything before getting some sort of document signed by both parties about fixing the problems.

Enjoy your new house if you do get it and pics please

 

[rh71]

Pics (w/ the current homeowner's stuff)