Real Estate

Negotiating inspection issues...

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[OP]
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Mar 23, 2008
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Edmonton

Negotiating inspection issues...

House was sold as having "upgraded electrical". Everything on the inspection went ok, except that knob and tube wiring was discovered as being live. Cost from electrician for just the electrical was $8400 + GST, as entire house needs to be brought up to current code. We can knock off $1200 if we do the required demo to give them access. Waiting for quote from contractor for repair work after electricians are done. I'm assuming this will be in the thousands as well. Part of the cost might be mitigated due to a kitchen remodel and a willingness to sacrifice part of the basement development to ease access to main floor.

We still like the house, and figure this can all be dealt with. The seller has said they're willing to work with us on this. Assuming total cost is in the $15,000, how much would you expect to try to knock off the agreed upon price? We paid very close to list price, and thought we got a decent but not "outstanding" deal. But we swooped on it, and got the deal locked up before the listing had been on the realtors' websites more than 24 hours. Based on the interest, it would likely have gone into multiple offers the next day, and our realtor figures that might have gone for $10k above list (which is why we acted fast to lock it up). So if we go too hard-core on it, we risk the seller saying "Screw that, we'll just put it back on the market". They do, however, now have to disclose the electrical issue, which they claim to have not known about.

Thoughts?

C
10 replies
Member
Dec 15, 2014
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Vancouver, BC
Are subjects removed yet?
Deal Addict
Dec 18, 2006
2004 posts
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Markham
CNeufeld wrote: House was sold as having "upgraded electrical". Everything on the inspection went ok, except that knob and tube wiring was discovered as being live. Cost from electrician for just the electrical was $8400 + GST, as entire house needs to be brought up to current code. We can knock off $1200 if we do the required demo to give them access. Waiting for quote from contractor for repair work after electricians are done. I'm assuming this will be in the thousands as well. Part of the cost might be mitigated due to a kitchen remodel and a willingness to sacrifice part of the basement development to ease access to main floor.

We still like the house, and figure this can all be dealt with. The seller has said they're willing to work with us on this. Assuming total cost is in the $15,000, how much would you expect to try to knock off the agreed upon price? We paid very close to list price, and thought we got a decent but not "outstanding" deal. But we swooped on it, and got the deal locked up before the listing had been on the realtors' websites more than 24 hours. Based on the interest, it would likely have gone into multiple offers the next day, and our realtor figures that might have gone for $10k above list (which is why we acted fast to lock it up). So if we go too hard-core on it, we risk the seller saying "Screw that, we'll just put it back on the market". They do, however, now have to disclose the electrical issue, which they claim to have not known about.

Thoughts?

C
You can always submit an amendment with a figure that may satisfy you and see how the sellers respond. They may either accept it (in this market, very unlikely), they may counter it (if you ask for 7500, they may settle for 4000) or they may reject it outright and literally say take it or leave it, otherwise it's going back on the market. I would be prepared for the last outcome, however if you're able to get anything out of it, it would be icing.

If you're working with an agent, you may want to ask them for direction.

Good luck!
[OP]
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Mar 23, 2008
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No, conditions weren't removed yet. We had subject to financing (which is good to go) and inspection, which is where this was discovered, so we haven't removed this yet. Dates are up middle of the week.

As far as what our realtor says... He says we should ask for the moon, but prepare to settle for less. Our contractor quote was pretty darn high (like $2000 per wall to be repaired, and there was 7 walls on the main floor alone that the electrician needs to deal with). I need to talk to our electrician about how he can modify his plan to reduce the impact.

Thanks so far! We really like the house, and don't want to lose it on this.

C
Deal Expert
Aug 2, 2001
16886 posts
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It really depends on the market you are in - how hot is the Edmonton market? Alberta as a whole is not doing so great, and while Edmonton seems to be better off than most of Alberta, from what I recall their days-on-market is higher than it was before. Are there really that many houses selling within the first week on market still?

If your realtor was right in the price was low enough for multiple offers, then the other agent clearly did not do their job by accepting your offer so soon. Does that make your agent right? Or is your agent wrong, in that the situation was not one where the potential was high for multiple offers? What I am trying to say is I really would not put too much stock into the opinion of a realtor that the property would generate multiple offers, especially in this market (at least my opinion of it, which could be wrong).


That said, you have discovered a pretty major issue. Especially since the seller seems to have indicated the electrical was upgraded. I would definitely be asking for a large portion of the money it will cost for repair. Start high, work to reach a compromise. Remember, the ball is in your court because any momentum of a new listing hitting the market is now gone and they will have fallen off the radar for a lot of people.

Above all else keep in mind - there are many "perfect" houses for you out there. Don't go crazy over this one property - very few are ever that unique that you will not find another within a reasonable period of time.
[OP]
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Mar 23, 2008
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Some areas and price points in Edmonton are hot, some are not. There was a lot of interest in the house from the start. At the time we were doing our showing, there was multiple vehicles on the street with people looking. I think there was 6 groups scheduled the next day. And yes, I think their realtor did them a disservice by not letting it go multiple, but maybe they were ok with getting close to their list price.

As far as value, similar homes in the area that needed significant work (approximately equal work, IMHO) were asking 60k more than we offered. Of course, some of those homes are still on the market a month after being listed...

I think we have a plan in place to deal with it. I'll post back once it's resolved. We'll ask for a chunk of the repair work and earl of the electrical, but try to settle for a minimum of the electrical. The rest will get rolled into our reno projects we want to do.

C
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May 29, 2006
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Edmonton is about to hit an all time high for house prices.
[OP]
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Mar 23, 2008
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rocking23nf wrote: Edmonton is about to hit an all time high for house prices.
Thanks for the market update, but that wasn't really the question...

C
[OP]
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Mar 23, 2008
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As a followup... We asked for both electrical and repair costs back, which p*ssed off the seller. He apparently listed for 20k less than he wanted to based on his realtor's advice, so when we asked for such a significant further discount, it pushed him over the edge. They came back and said no discount for either, take it at the agreed on price or leave it.

We let it sit overnight to let cooler heads prevail, came back the next day and asked for electrical only. My GF wrote a nice letter for the other realtor to give to their client about our plans for the home, and explaining our situation (responding to a variety of "quotes" from people reluctant to provide a quote without being able to do an in-depth visit). In the end, we got them to pay for the electrical, and we'll take care of the repair costs.

Now to start posting in the H&G forum... Major gut job and reno work to come. Possession on June 24!

C
Deal Expert
Aug 2, 2001
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CNeufeld wrote: Now to start posting in the H&G forum... Major gut job and reno work to come. Possession on June 24!

C
Congrats on your house!
[OP]
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Mar 23, 2008
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Edmonton
TrevorK wrote: Congrats on your house!
Thanks! We're pretty fricking happy, even with all the ups and downs. In the end, it will be a great place. And it's in one of (IMHO) the best neighborhoods in Edmonton, within about 100' of one of the most classic houses in Edmonton. So retaining property value shouldn't be a problem (famous last words, I'm sure...).

C

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