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We're buying a house, and the home inspection found that:
1) The wood siding needs to be repaired / replaced. We had a siding contractor take a look, and he said that it all needs to be replaced, and gave us a ballpark figure of $20,000-$30,000.
2) The attic lacks sufficient ventilation, lacking both vents for intake and vents for exhaust.
3) Furnaces are both over 25 years old, look like they haven't been serviced in forever.
It also found other things that are clearly covered by the contract.
The inspection section of the contract states that the inspection will cover HVAC, plumbing, electrical; that the foundation and structure of the building are sound; roof doesn't leak; doors and windows are in good condition.
I would think it's reasonable for us to ask that the Seller replace the siding (or lower the sale price, or give us the money, or something similar). But what about attic ventilation, or some money towards replacing the furnaces?
Does siding / attic ventilation fall under the structure of the building? If the Seller refuses to do anything about the siding, can we cancel the contract, or would that be considered a breach of contract?
We need more info - is your contract written by an attorney? The Realtor Association? The State that you are buying in? A template bought at a local store?
Do you have an inspection objection & resolution period? Do you have a Buyer's Agent?
Where is this house?
Would you lender object to the amount if credited from the Seller?
We need more info - is your contract written by an attorney? The Realtor Association? The State that you are buying in? A template bought at a local store?
The local Realtor association.
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Do you have an inspection objection & resolution period? Do you have a Buyer's Agent?
Yes: 10 days to ask for repairs, 5 days to get a response, 3 days to cancel the contract. We technically have a Dual Agent, as our Buyer's Agent showed us a property that's being sold by his firm by a different agent.
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Where is this house?
NJ
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Would you lender object to the amount if credited from the Seller?
I don't know, and hadn't thought to ask. Is that something we need to ask our lender, or is that something that comes up when they do the lender appraisal?
We're buying a house, and the home inspection found that:
1) The wood siding needs to be repaired / replaced. We had a siding contractor take a look, and he said that it all needs to be replaced, and gave us a ballpark figure of $20,000-$30,000.
2) The attic lacks sufficient ventilation, lacking both vents for intake and vents for exhaust.
3) Furnaces are both over 25 years old, look like they haven't been serviced in forever.
It also found other things that are clearly covered by the contract.
The inspection section of the contract states that the inspection will cover HVAC, plumbing, electrical; that the foundation and structure of the building are sound; roof doesn't leak; doors and windows are in good condition.
I would think it's reasonable for us to ask that the Seller replace the siding (or lower the sale price, or give us the money, or something similar). But what about attic ventilation, or some money towards replacing the furnaces?
Does siding / attic ventilation fall under the structure of the building? If the Seller refuses to do anything about the siding, can we cancel the contract, or would that be considered a breach of contract?
The biggest ticket item here appears to be the siding, which you say was evaluated by a siding contractor. This is a person who makes money by installing new siding, so his opinion may not be seen as objective by your seller. What did the home inspector have to say about the siding?
Are the furnaces working? You may want new ones because of the age of the current ones, but the contract language probably calls for them to be working.
As with all contracts, yours may be different from others. You & your attorney should review YOURS to understand the situation correctly.
The biggest ticket item here appears to be the siding, which you say was evaluated by a siding contractor. This is a person who makes money by installing new siding, so his opinion may not be seen as objective by your seller. What did the home inspector have to say about the siding?
I don't have the full report yet, but while walking around the house the home inspector said that the siding was in really bad shape, hadn't been maintained at all, and had paint bubbling and dry rot all over the place. He said it needed to be repaired or replaced.
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Are the furnaces working? You may want new ones because of the age of the current ones, but the contract language probably calls for them to be working.
The contract stipulates "good operating condition". They need to be inspected for cracked heat exchangers, given their age, but appear to be working otherwise. I've heard other buyers get / sellers give credit towards new furnaces in the case that they were 26+ years old, but I don't know if that's common or rare.
Our agent said that the contract doesn't cover exterior, which is the cause of our concern. I would have thought that siding would fall under "foundation and structure of the building", since you can't have a house without siding, but I guess it's considered external? That seems like some BS to me.
Our agent said that the contract doesn't cover exterior, which is the cause of our concern. I would have thought that siding would fall under "foundation and structure of the building", since you can't have a house without siding, but I guess it's considered external? That seems like some BS to me.
Once you have a signed contract, and are looking for interpretations of that contract, you should be talking to your attorney. I've never seen a contract that "doesn't cover exterior."
I've been a WI licensed broker for over 10 years AND I've turned my former hobby of renovation/rehabbing my first house into what is now a full time business buying distressed homes/rehabbing/reselling for a profit, which sometimes isn't much at all and other times has been pretty great! (I hate the term "flipping" due to the many clowns all over the country attempting to "flip" a house or houses and cut corners, hide problems, etc and make it tough for guys like me who are in this for the long term and truly care about what we end up selling someone!) Anyway, my point is that I think I'm qualified in both ways to give some advice here.
Now, I don't know what differences are out there legally as far as NJ vs WI, certainly there are some but I'd guess it isn't anything too different there overall. I also participate a lot in several forums, both for RE agents/brokers and another for RE investors all over the USA and even though every state has its own little differences, generally things are pretty similar all over. My advice is based on WI law, rules and the "unwritten rules" as well, but I'm pretty confident my advice applies to you in NJ quite well too.
Also, before I start I also want to say that in WI and I'm sure it is the same by you, we have a home inspector state license you MUST pass an exam for to get, but simply passing that test doesn't guarantee too much, I've seen some inspectors that know houses from top to bottom like the back of their hand and some who I can't believe even passed that not too hard exam and everything in between, so I encourage every buyer to shop around and do your own vetting of a few inspectors AND some inspectors may specialize, such as in older homes, high end homes, or other niches as well, so if you can find one well matched to type of house that you're buying, that's a great thing!!!
Now, I'm REALLY looking for some more details on this deal you got accepted and I'm very suspicious about the part where both sides agents are with same firm, its not automatically a problem at all, IF both are truly looking out for THEIR client, not both looking just to sell this house to you, one way or another and don't care if you get screwed along the way! I have no clue what the truth is, so I'm just advising you to be a little extra aware on that.
Now, as far as this whole "home inspection" part of your contract, here we have a "contingency" buyers can opt to include in their original offer for a home inspection by licensed inspector and for what we call "retail" sales (vast majority of all sales are retail sales, basically when current owner is selling house in good or excellent shape, really should be "move in ready" although many homes, even fairly new ones may have some issues here and there, but shouldn't have any major issues that must be fixed ASAP. The "non retail" sales, more commonly called "distressed" sales include what we call "REO's" (Real Estate Owned) which means it was foreclosed on and is now owned by the plaintiff that sued to foreclose, usually always a bank, but occaisionally someone else. Also, estate sales are often "distressed" when maybe grandma dies at 93 and house is in OK or decent shape but the heirs just want it gone and don't want to fix anything, etc so as is almost always true with REO's too, it is clearly sold "AS-IS" and if you go and look at it and you see some major issue like say a basement wall is ready to collapse within the next 6 months, well that's your problem to take it or leave it, sellers don't care! (BUT, you'll get a nice discount on the price as compared to the neighbors with exact same house. I've bought at least 10 this way last few years.
For retail sales here in WI (I'm in Milwaukee area) I'd say 95+% maybe 99+% of retail sales get offers with the inspection contingency included, its nearly universal for retail sales. HERE'S THE PART YOU NEED TO KNOW AND MAKE SURE ITS SAME NJ vs WI, but I'd be surprised if its not the same in NJ-If your inspector comes through and does a proper inspection and hands you report with basically ANY issue above something really trivial, YOU then have the right to cancel your offer and walk away no questions asked, BUT it must be withing time period picked on the accepted offer, which you mentioned the 10 days to ask for repairs, 5 days for response, 3 days to cancel. In WI its worded SLIGHTLY different, but its essentially same deal. So, that's what you get then, you are able to walk away, get all earnest money returned ASAP and its all over with. That's it though, even if the inspector says "every part of this place is bad, top to bottom" or whatever, you have no legal right to force seller to fix a damn thing, you can walk and that's it! Seller isn't required to fix a single thing!
Now, that's where the BIG part that no one's even come close to talking about here yet that I'd say is the real story here and that is how THIS DEAL fits in with comparable sales in immediate area, including price wise and does it make sense for the seller to want to fix everything or is he/she an idiot to offer to fix even a $5 item?? Here's what I'd need to know to tell you my opinion:
-WHAT IS THE SELLING PRICE???? This is so HUGE here because I know in NJ you have some areas like certain fancy, super fancy and super duper fancy burbs near NYC where $1M, $5M, $10M and even more expensive homes are all over the place AND you've got some parts of NJ where homes are dirt cheap! (and on that block alone, they've already had four murders this year!) So, spending $25k to replace wood siding is pocket change on lets say a $3.5M mansion sale and I'd think seller ought to consider it for sure, but if this is a $125k house and you asked me to spend $25k for all new siding, plus other stuff, after I got done rolling on the floor laughing for 5 minutes straight I'd say thanks for the offer and good luck on finding something else! See ya! Also, the "value" of your deal has to be taken into effect as well. Your agent SHOULD be able to give you advice, BUT just like how some home inspectors are a joke, some realtors are too! If its me and you're MY client, I go on the mls and pull up some "comps" (comparable sales, thus something in immediate area, as close in size as well as level of finishes, etc and as recent as possible, usually 6 months or less, but sometime you need to go back up to a year maybe.
So, if you're realtor is hopefully one like me and not one of the brain dead ones, he/she should be able to take an hour or two at most and find some good comps and then present them to you-THEN THIS IS THE PART THAT NEEDS SOME BRAIN WORK!!-give their professional opinion as to your deal vs recent comps. That could be "Hey, you're getting a kick ass deal on this place, look at these three all quite similar to yours and these two just sold for $80k more and this one went for $110k more, just pay for the damn siding yourselves and you're still getting a kick ass deal!!! Drop the contingency and seller's locked in, who cares if you have to pay for it, THIS IS KICK ASS DEAL!! Or maybe it is "you're not getting any great deal here at all, tell seller he fixes it all or you're outta here!!!" Again, hopefully your agent has functioning brain!
Finally, if it is like a $150k deal and you are now asking for $25k + in repairs???? Then I'd say that they ought to put your picture in all new dictionaries, right next to the definition of "chutzpah"!!!!!
I hope this helps and I'd sure like to know your offer amount and any other of my details that I've mentioned here and I might to be able to give you more of my opinion on it.
Yes: 10 days to ask for repairs, 5 days to get a response, 3 days to cancel the contract. We technically have a Dual Agent, as our Buyer's Agent showed us a property that's being sold by his firm by a different agent.
NJ
I don't know, and hadn't thought to ask. Is that something we need to ask our lender, or is that something that comes up when they do the lender appraisal?
Areas I've bought and sold in, having your own agent who is not also the seller's agent is not a dual agency. Could be different in NJ. And, in dishonorable unethical firms, could be very different anyplace. I have not had a problem with both agents being from the same company myself. Your agent can tell you things the seller's agent cannot and vice versa.
So...you agent doesn't sound helpful on the home inspection for one thing it seems.
Your contract really says it doesn't cover the outside?
Is this a condo by any chance?
In NJ, you can't cancel the contract during the due diligence period without explanation?
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