Wednesday, September 10, 2008

Should Have Known Better

I knew I started posting about the house too soon! Things are not looking good, people. I'm operating on about 4½ hours of sleep. This is going to be a long day!

Some things I've learned since the last time I was in the market:

  1. Buying or selling, I've come to the conclusion that you need a (competent) real estate agent. A buyer's agent is not just there to find you houses; they are also going to be the person on your side when it comes time to negotiate. That probably sounds like a "Duh" to many people, but I honestly thought for years that they just weren't worth it -- if you could find the property on your own, you didn't need one. Wrong! Edited to add: Some agents are just sleazy. If the agents we're working with now were on our side, we wouldn't want them on our side. John has a friend who has told us wild horror stories. So, don't work with one you don't feel comfortable with.
  2. It's worth it to pay a lawyer for a couple of hours to review purchase agreements. We don't know how much we have to pay ours, because he's my brother's coworker and we never discussed money, but he saved us some serious hassles since we didn't do #1, above, and the seller's agents have a) lied to us at every turn, and b) tried to slip little changes into the documents between versions. (Example of a lie: the listing agent, a contractor himself, swore to us that the sump pump was new and operational. It's ancient and grody and not plugged in, because the floater is broken. There is a supplementary pump for the cellar entrance that is newer, but that's not what we asked him about.)
  3. It's VERY worth it to hire a nop-notch inspector. We watched this show a couple of weeks ago, and one of the participants mentioned the National Association of Home Inspectors (NAHI). First, we tried getting a recommendation. My rep (work) just bought a bank-owned house in the spring, and highly recommended her very thorough inspector; however, he isn't licensed in the county the house is in. So, we turned back to NAHI (we'd already looked him up there).

    Dontcha know, the inspector John hired is, like, the god of home inspectors. He founded NAHI. Probably the single most thorough inspector, ever, and even then couldn't inspect everything (during the seven hour orderal) because of the problems with the house. He was more expensive than some others, but worth every dime. He must have royally pissed off the listing agent, because she kept commenting on how long it was taking (she was of the opinion - shared with me - that inspections should take no longer than two hours). Near the end, he kicked her out because she was hovering and he wanted to talk to John without her. He revealed to John that they (the seller's agents) had lied to him from the get-go.
This entire deal is probably off. Based on Pat's inspection, we are either walking today or making a really low-ball offer. He estimates that it would cost $20k - $30k to get the house in great shape, or at least $15k to get it in livable condition. Right now, even if little things like the ventilation and the walls were complete, it's highly unsafe. It's not worth close to the price we negotiated.

What's right:
  • He raved about the floors. The dining, living and maybe all the other rooms besides the bathroom and kitchen are 3" oak, beautifully done.
  • The ceilings are original plaster and in the best shape he's ever seen in a house from that time (built in the 60s).
  • The cabinetry is absolute top-of-the-line.
  • Roof and attic are in good shape, although it needs more insulation.
  • He actually thought the not-yet-completed first floor laundry room was a good idea and pretty well done.
  • If we do get it for our next offer, and invest the ~$30k (probably more, b/c isn't that the way it goes?), the house will immediately double in value: double the combined cost of the house and the repairs.
  • What amazed me is that he didn't say "RUN!" He thinks it's doable, and a nice house, just not worth remotely what they're asking, or what we were going to pay.
What's wrong:
  • The only thing the previous owner* did right was the floors. The electrical wiring, while all new, is very badly done. Some of the wiring is backwards, not grounded, etc.. There is actually a live (hot) wire hanging down from the ceiling in one room; if someone touched it, they'd be dead. (Pat flipped that circuit off and noted it in the report.) There is an outlet by the front door (exterior) that is neither grounded nor waterproof.
  • There is not only not a new well, as the agents informed Pat**, there isn't an official, legal well at all. There is a shallow, "bubba" well, probably hand-dug when the home was built, but no water supply to the house, not really. Getting a new well is the biggest part of the estimated cost.*** All the other stuff is smallish, but adds up.
  • Weird little things like: wall tile on the floor of the bathroom. Pretty and shiny, but guaranteed to cause a slip and fall.
There is more, but that's all I can remember right now. If we make an offer and they reject it (probable, because we'll be dropping our offer by about $25k) or we walk, we'll be printing up a couple dozen copies of the report (with our personal info. removed) and giving them to the next door neighbor. Then I'll be posting the address here, so a Google search might bring it up, and offering copies of the report to any interested buyers. I'll even consider driving over there once in a while to stick copies of it around the property.

The offer will be in the form of an email with a number and the attached inspection. Nothing more.

This will be my last update about this or any house until we're done.

*A little detective work by our intrepid inspector turned up details about the previous owner. He bought it for him and his girlfriend, and did the work himself, but she dumped him and he abandoned the whole shebang. He is probably NOT the one that removed things like the water filter.

**They told him that they hadn't been able to locate the documents, but assured him that there was, indeed, a new well. Nope.

***We really like that Pat said he would not consider bidding on the job, because he felt it would be a conflict of interest. (I agree, just didn't expect to hear that. After all, the listing agent is foaming at the mouth to bid on it.)


Anonymous said...

Oh! That's so terrible! Good inspectors are awesome, and it sounds like you got the best! Hooray for him for taking his time and explaining everything to you! I'm sorry the house isn't as good as you expected, but better to find out now!

Wendy said...

Aw, bummer. Big bummer. I hope they take your lower offer and you get a good contractor (can you get that lucky twice)? ;) Because what I saw looked lovely.

How on earth can the house "not really" have water? Yikes. That realtor reminds me of our "buyer's agent" who expressed surprise that we were actually reading all the documents we were signing when submitting our offer. Sounds like an awfully skeevy experience. REOs are a different arena of what the agents are expected to know and be responsible for, but I wonder if a complaint with whoever oversees realtors in your area might be a good idea, maybe save some other people from this swine.

Melissa said...

naiad-kitty: I'm sorry I wasn't able to be there, but couldn't have survived seven HOURS. My gosh. Anyway, I told John: I'm glad he found the problems, I just wish they didn't exist to find.

wendy: One thing I didn't say about our super-inspector is that he can recommend some excellent contractors. We'd have to interview a couple-few, but it will be a good place to start.

The whole thing has been very shady. The sellers agents for this house have repeatedly expressed surprise that we knew about many things. The thing with the water is that there is a well, but it's shallow and can't get enough pressure to actually run. So, it's there, but not really.

We definitely plan on filing some complaint. An agent who ran across my blog sent me the name of the organization for this area and hinted that I might need it in the future.

gwensmom said...

Good realtors and inspectors are worth their weight in gold. Thank goodness your inspector saved you from a potential nightmare!