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first home-buying experience issues (long)
I'm new here and looking for opinions or insight. A week and a half ago, I put an offer on a house listed at $129,500. I offered $121,000 + seller pays $3800 in closing. My agent had sent me comps, which were around $124,000, finished basements, 1200-1400 square feet. This house has 912 square feet and an unfinished basement (the listing agent is calling it a finished basement b/c there are some walls. The floor is still bare concrete, and the ceiling is unfinished).
The seller came back with $128,000 + $3800 in closing costs. I offered $125,000 + $3800 in closing. They came back with $125,800 + $3800 in closing costs. I accepted.
The inspection was Wednesday. My best friend's husband is a structural engineer and came with me. Nothing major came up except the roof, which we all knew was at the end of its life. The listing agent acknowledged the seller is aware they may need to replace the roof. However, the inspector said I may have a hard time getting the seller to pay for it b/c it could have a few more years. He did write in his report that it needed repairs - sagging rafters, hail damage, etc.
My agent and I did a form to re-negotiate based on unacceptable conditions. I asked for the roof to be replaced based upon a bid the seller had already received. I also asked for the power line in the backyard to be raised (it is too low because of a deck the seller added), and for the electrical outlets without proper ground to be grounded.
Verbally, the seller said they'd replace the roof based upon a second bid they received for $4500 but would not fix any of the electrical issues. The interior electrical isn't a huge issue for me b/c my dad is an electrician and said he could take care of it. He would rather not deal with the power line, but the inspector said that could cost $1000-$2000 with the city involved. As a side note, if the power line issue were not to come up in appraisal, I'd be willing to deal with it in the future on my own. However, if it comes up in appraisal or insurance inspection, then I prefer the seller to fix it. The listing agent is convinced it will not come up; my dad and my agent feel its a 50-50 shot that it comes up.
Yesterday, my agent told me the $4500 roof bid did not include everything, and the roofer expects an additional $1400 in decking. The seller said he will not pay anything above $4500. The listing agent offered to contribute $400 toward that. The seller asked for my agent to contribute also, and asked me to get rid of the home warranty (~$490) and use that toward the roof.
I just got off the phone with my agent and told her that if they can't pay for all of the roof and the power line (if it comes up in appraisal/insurance inspection), I need to walk away from this house.
I'm not willing to give up the one-year home warranty that was written in the original contract. I'm trying to be as flexible as possible by not bringing up the seemingly minor things that came up in inspection - I just wanted the roof replaced. Its 20 years old (according to the seller's disclosure).
As of right now, I would only be out $395 for the inspection. Part of me feels like I'm being unreasonable by asking for these two things as my bottom line, and I'm trying to not be stubborn. It is a good house. The price we agreed upon seems fair. Any thoughts? Questions? Should I suck it up and agree to pay part of the difference in the roof price and pay for the power line if it comes up? Or should I walk away if they won't agree to those two terms?
Re: first home-buying experience issues (long)
I think that where you are already under contract at a price that is already on the high end of what the house is probably worth I'd walk if they aren't going to replace the roof properly, including the decking.
I would possibly consider sucking up the electrical issue and paying to have that fixed if I liked everything else about the house.
We went through a similar experience after inspection where there was a ton of stuff wrong and the sellers offered pennies to fix it. We walked.
If you can't pay for a new roof out of pocket or you think it will push your money in to the purchase over your limit, then you may just have to walk.
My realtor just called and said the seller still will not pay more than $4500. She said they suggested I bring in a third roofer to try for a lower bid. The listing agent emailed my agent to say "Rena is getting a great house. There is nothing comparable in the area. She is essentially getting the house for $117,000, so I understand why my seller isn't budging on the price".
This is where I start to feel like I need to not be stubborn and just pay anything above $4500 on the roof. It'll be tight financially but won't break my budget - maybe I'm arguing more on priniciple b/c I feel like they need to just replace the roof.
In my opinion, when you buy a house you're offering a price that's fair market value w/the assumption that everything is in good condition (unless otherwise disclosed up front or the house is sold "as is").
It sounds like you offered FMV for this house. The sellers are being stingy. Unless you're willing to go the extra mile ($$$) for this house b/c it's special, I would walk. $4500 is pretty cheap for a roof issue. Once they start tearing layers off to fix things, the price could climb fast with new discoveries. Our new roof cost a little over $15K. Do the math - If the roof and wire issue actually cost $8000 and the seller gives you $4500, will you regret buying this house at that price?
Is it accurate to say that there are no comps on the market in the area? We closed mid-April and my advice to you would be to stick to your guns and make sure you get a fair deal.
After we moved in, we realized there was a lot more that needed to be fixed/changed in the house than we originally thought. There were food stains on walls, stick people drawn with crayon on our fireplace, an issue with the electrical circuit board that the inspector missed, an ant infestation.... it adds up and you're going to kick yourself if you feel like you didn't get the best deal you could.
If the purchase price is $125,800 and you're getting $3,800 toward closing costs from the seller, you're essentially buying the house for $122,000. That's what the seller nets in the deal. Not $117,000. They don't get to count the cost of replacing the roof that didn't pass inspection as a "credit" to you. That's their expense. The roof didn't pass inspection, that's not your fault.
I wouldn't want to go to additional contractors to get a cheaper price. $4500 already seems pretty low for a roof replacement. If you get a cheaper bid, it could end up being shoddy work done by a less experienced contractor or lower grade materials used, which doesn't really help you in the long run.
It seems like you're paying a fair price for the house. If the seller won't foot the bill for the roof replacement, I'd walk away from the deal. It sounds like there are other houses in the area available.
Mr. Sammy Dog
The seller sounds... difficult. Keep in mind that this is a financial transaction. Try to keep the emotional part (the big, cheery kitchen! Having a move-in-ready house!) out of it.
I agree that when you buy a house, unless you are buying it specifically for it to be a total gut job (like an old colonial or Victorian that needs to be completely re-done, and you're a contractor), I would expect it to be liveable for the forseeable future. That means a 10 year old roof would probably be okay, maybe with a few patches. A 20 year old roof is a no-go. That's a tear-off job. It did not pass inspection. It is unlikely that a 20 year old roof WOULD pass inspection, especially if it snows in your area. You are asking for something functional, not a huge upgrade with state-of-the-srt shingles.
Come on. Plenty of people do things like re-painting, re-carpeting, tiling a back splash in order to sell their homes. That's all cosmetic. A roof is structural. Seller sounds like a piece of work.
You also have to realize how much you'd be putting into the house, even if you could afford it. I mean, anyone can buy marble flooring with enough money, but will you recoup the cost when you sell? If $122k is a fair price, will spending upwards of $8k on a roof on top of the purchase price make sense for you?
I'd walk. He might budge. He might not, and then someone else will just have to deal with him.
40/112
Given that the roof may last several years, I'd ask for $5k ($4500 from the sellers and $500 from the agent or however they want to do it) and hold onto it until you need the roof replaced. You'll have a one year warranty so you'll be good for the next year and then if it gets more hail damage insurance may pay for it. If not, you'll have the $5k in the bank accruing minimal interest until you need it.
This is what we did when we bought in 2009. We took cash from the sellers to cover the estimated cost of repairs from the inspection and fixed what we wanted, when we wanted.