House buying question

[masraum]

Lets say you were looking for a home that had good value. It seems that almost everyone these days is looking for something that's 100% ready to go, pretty, up to date, and spotless. We don't mind having to do a little work, and kind of like making something our own vs buying something that someone else suited to their tastes.

We are looking at a home that was built in 1968 (so not really that old for some of you). I think it's been lived in by the same family since new. It appears as if nothing, or very, very little was changed in that time. The only deed change on file is when the husband died 22 years ago and left the home to his wife who died a year ago. It seems the kids are selling it now. I think it's been empty for at least the last year. Foundation repair was performed as disclosed, and evident by some cracking in the corners of some walls.

They are currently asking too much, probably not a bad price if the place was perfect and updated, but insane for a place that appears sound, but very dated.

My question is this, if the power and water are currently turned off, it's not possible for an inspection to confirm whether the plumbing is good, electric is good, HVAC is good, etc....

What would YOU do in that situation? Assume it's all bad and make adjustments for that? Assume some may work and some may not and make a partial adjustment for it?

It's interesting, there's a tiny bit of furniture still in the house, the garage is full of junk including a workbench, there's even a closet that's full of what I assume are family photo albums.

On top of needing updates, we would probably do some major work on bathrooms and moving walls. It's odd, a 3 BR home with a single tub/shower near the 3 BR, but then there's 2 separate rooms with sinks, and then the master bedroom has a small room with a vanity with a sink. On the opposite side of the home near the kitchen and laundry room is another small bathroom with a shower (thinking that might have been a modification).

[craigster59]

I don't understand how someone would list a house for sale with no power or water. All it does is place a ton of contingencies in the contract prior to inspection.

The other thing is, if a lot of updating is needed (bathrooms, kitchen, HVAC and some "while you're in there" electrical) I hope you enjoy living in the middle of a construction zone. That's just my take.

Tell your realtor you won't close until a full inspection is done with water and electric working, even if they and the sellers agent have to put it in their name for the time being.

[IROC]

Originally Posted by craigster59

Tell your realtor you won't close until a full inspection is done with water and electric working, even if they and the sellers agent have to put it in their name for the time being.

Realtor's can get the power and water turned on to support an inspection. I've seen it done.

[masraum]

Originally Posted by IROC

Realtor's can get the power and water turned on to support an inspection. I've seen it done.

That's good to know.

[Sooner or later]

My current house was in worse shape when I bought it. The owners had moved to Cali and rented the place to in laws who absolutely destroyed it. I ended up paying 80 grand for a 2600 sp ft home in a nice quiet neighborhood.

I basically wrote a 10,000 dollar check every week during reconstruction. Took about four months to complete. I lived in the gameroom for most of that time. I ended up firing one contractor and did about a quarter of the work myself. I ended up putting another 120,000 into it and ended up with a 300,000 place.

It was a PIA but the 4 months of headaches was worth the 100,000 I saved. I didn't need financing so that was a headache I avoided. I wouldn't recommend my path to everybody.

[Pazuzu]

Originally Posted by masraum

That's good to know.

Actually, i think it's required here in TX. I seem to remember some words in one of the realtor contracts that we read that power, water, access, etc are all required while on the market for viewing.

I can contact my realtor (who is my friend) if you need more info, he's very willing to help with things like that.

[masraum]

Originally Posted by craigster59

I don't understand how someone would list a house for sale with no power or water. All it does is place a ton of contingencies in the contract prior to inspection.

The other thing is, if a lot of updating is needed (bathrooms, kitchen, HVAC and some "while you're in there" electrical) I hope you enjoy living in the middle of a construction zone. That's just my take.

Tell your realtor you won't close until a full inspection is done with water and electric working, even if they and the sellers agent have to put it in their name for the time being.

My assumption is that it's the kids which are probably in their 60s doing the selling, and they think or hope that the home is worth more than it really is. They also assume they should be able to tell you "it worked when we turned it off" and that would be good enough.

It's been my experience that regardless of what the item, some folks just seem to see their stuff at inflated values. They've got the home priced as if it's in perfect working order, where I think it needs to come down by at least 33%. My wife thinks it's overpriced, but not by as much as I think.

Yeah, our previous home was built a year earlier, and in the nearly 20 years that we lived there, it was frequently a construction zone.

[masraum]

Originally Posted by Pazuzu

Actually, i think it's required here in TX. I seem to remember some words in one of the realtor contracts that we read that power, water, access, etc are all required while on the market for viewing.

I can contact my realtor (who is my friend) if you need more info, he's very willing to help with things like that.

Interesting.

I'm kind of leaning towards another house that only needs a little cosmetic updating and would be MUCH more comfortable. I may reach out to you with some questions for your friend next week.

Thanks

[Pazuzu]

Originally Posted by masraum

Interesting.

I'm kind of leaning towards another house that only needs a little cosmetic updating and would be MUCH more comfortable. I may reach out to you with some questions for your friend next week.

Thanks

Let me make clear, those things are required if you have a Realtor accessing them. If you're shopping on your own, then you don't get the right to any of that. I learned that, unfortunately, without a Realtor you don't have many/any rights when buying a house.

Also, overpriced homes will get fixed when the bank runs an appraisal, they will refuse to loan you money if the house is overpriced. Then the seller either needs to drop the price, or the deal falls apart unless you personally want to add cash to the deal to compensate for the difference...which you shouldn't.

[E38Driver]

Given the age of the house I would be concerned about Asbestos. Popcorn ceiling and mastic used for the vinyl flooring. Also if the HVAC is original asbestos insulation.

[masraum]

Originally Posted by Pazuzu

Let me make clear, those things are required if you have a Realtor accessing them. If you're shopping on your own, then you don't get the right to any of that. I learned that, unfortunately, without a Realtor you don't have many/any rights when buying a house.

We have a realtor.

Also, overpriced homes will get fixed when the bank runs an appraisal, they will refuse to loan you money if the house is overpriced. Then the seller either needs to drop the price, or the deal falls apart unless you personally want to add cash to the deal to compensate for the difference...which you shouldn't.

Yeah, this house went "under contract" once and is back on the market. I'm assuming the home didn't appraise high enough for the asking. We are having our realtor try to feel out the listing realtor to see if he can tell if that's the case. They both work for two different offices of the Gary Green BH&G realty offices.

they are currently asking $240k. I think they need to be asking $140-160k, but even if I'm off and it's $180-190k, it's still way off. To get to $240k, it'd have to be tip top with some modern amenities and upgrades.

[fintstone]

Originally Posted by E38Driver

Given the age of the house I would be concerned about Asbestos. Popcorn ceiling and mastic used for the vinyl flooring. Also if the HVAC is original asbestos insulation.

All those...plus possible aluminum wiring or pipes with lead or cast iron depending on area. Most drains to the street were cast iron or clay tile and often need replacing...especially if they run near mature trees. Usually very little insulation before the 80s.

Wiring is also often not properly grounded (two prong outlets vice three). Sometimes the outlets have been replaced with three prong ones to accommodate modern electrical items but there is not ground on third prong...so you cant tell without a meter (or removing the outlet covers). Also check the fireplace damper. Many from the 60s rusted out long ago.

Look at the age of the hot water heater. Last 60s home I bought had one that was 30 years old (like the HVAC). Neither lasted long...nor were very efficient before then.

[icemann427]

Since they are selling it FSBO without a Realtor and they are attempting a sale at 25%-35% over real value, you are wasting your time. Move on, and in case they quickly hire a Realtor that brings them into the real world, you can reassess at that time if you haven't already purchased a home. I guarantee there is a lot more wrong with that house than you think.

[Mike80911]

Not sure if it is the same thing but the last store I opened the water, electric and HVAC were off when we signed the contract. I had the other party sign a written guarantee that it was all in perfect working order and put money in escrow till everything was on and working. But I did have a problem with the electrical. Seems the prior owner failed to pay the bill for years and for some reason they could not gain access to shut the power. When I went to turn it back on they required me to give them a $2000 deposit and first have a complete inspection of the system Took me a month to get it turned on and I had to get a lawyer involved.

[lindbhr]

If they are unwilling to turn on the water and power, then the price will need to reflect that relative to other houses in the area. Basilcally, they are asking you to take risk. That house will likely have galvanized piping which will need to be replaced. Maybe $10k....Good luck

[john70t]

Originally Posted by masraum

They are currently asking too much, probably not a bad price if the place was perfect and updated, but insane for a place that appears sound, but very dated.

Kids thoughts:
They can let it sit for a very long time, waiting for the best price, because they don't pay for utilities.
Meanwhile the market will always keep going up.
Yeah right.

Throw that fish back.

[masraum]

Originally Posted by fintstone

All those...plus possible aluminum wiring or pipes with lead or cast iron depending on area. Most drains to the street were cast iron or clay tile and often need replacing...especially if they run near mature trees. Usually very little insulation before the 80s.

AL wiring is a very real possibility. Our previous home was built 1 year earlier and less than 2 miles from this one, and our previous home had AL wiring. I'm very familiar with AL wiring. We never had any pipe problems. I think this one has had some work done on the plumbing between the house and the street as there's a big capped PVC pipe (6" or 8", if memory serves) sticking up out of the middle of the front yard

Wiring is also often not properly grounded (two prong outlets vice three). Sometimes the outlets have been replaced with three prong ones to accommodate modern electrical items but there is not ground on third prong...so you cant tell without a meter (or removing the outlet covers). Also check the fireplace damper. Many from the 60s rusted out long ago.

Look at the age of the hot water heater. Last 60s home I bought had one that was 30 years old (like the HVAC). Neither lasted long...nor were very efficient before then.

Right, all of that's a consideration and why I think this house needs to come down at least 33%.

[masraum]

Originally Posted by lindbhr

If they are unwilling to turn on the water and power, then the price will need to reflect that relative to other houses in the area. Basilcally, they are asking you to take risk. That house will likely have galvanized piping which will need to be replaced. Maybe $10k....Good luck

Right, that's my thought. Our previous home was galvanized. We didn't have any issues, but I think it's just a matter of time.

I'd briefly considered gutting it and doing a full re-wire (assuming AL) and at the same time could do the plumbing, especially since we'd probably try to take one full bath and some space and turn it into 2 full baths. But then that's a ton of money, time and trouble, and I don't want to live in it when it's that much of a construction zone.

I think the house could be really cute/nice, but would take a lot of work and $$$.

This home was originally listed at $269k, and then reduced to $239k. The last time that we looked at this one before it was under contract our realtor contacted the other realtor who advised that there wasn't any point in offering much under the new figure because they'd already had lower offers that weren't accepted.

I think the sellers have an inflated since of the worth of the home, and are going to sit for a while and then eventually take less once they get tired of letting it sit or they get desperate.

[Rtrorkt]

$50k for the kitchen, $15k for each bath with the master being more if there is one. $10k for electrical upgrades (more if it has aluminum wiring which was done in that era), maybe $10k for plumbing upgrades depending on conditions (more if main drain is old direct buried cast iron. Then an additional 25% to 40% for the stuff you can't see. So if a house in the neighborhood in good condition is valued at say $300k, then the offer should be $100k to $125k less

[IROC]

Originally Posted by masraum

Yeah, this house went "under contract" once and is back on the market.

It's probably haunted.