[kayleen4246]

We are in the process of selling a rental property.
We are currently under contract with a buyer but following their home inspection, they want the exposed knob and tube wiring in the attic to be replaced.

I believe the wiring is fairly readily accessible up there (no drywall) but it's a small space (you can crawl and move around but you can't really stand up).
I bought the home about 6 years ago and don't remember this being an issue at my home inspection. The house is small (580 sq ft- 1 bed/1 bath) and built in the late 1920's.

Sometime in 2003/2004ish they converted the power from an old 4-fuse box to a standard electrical panel and it passed city inspection at that time. (I'm sorry if those aren't the right terms but I hope it makes sense).

Both the old fuse box and panel have power going through them, they're just hooked together. We live in South Dakota. I was wondering if anyone could give me a rough estimate on repair costs for this type of thing? Thank you!!

 

[Ocelaris]

There's no way to know how far the knob and tube wiring goes, if it's in the attic it's probably throughout the house, and you can't just replace "some" of it; you would have to replace the entire line from panel to end. So it might be very expensive if you don't see the entire line exposed.

I'd balk at that request and tell them you won't do anything, that's not a small request, and it could be very expensive, i.e. 10,000$ to replace a bunch of circuits, tearing walls apart. But it's very hard to say without any more details about the house, pics etc...

You'd be better off abandoning the knob and tube wiring and running entire new wires. Point is you can't replace just "part" of the knob and tube wiring circuit, it's everything or nothing. With that said I'm not an electrician and could be wrong, but that's how I see it.

 

[Speedy Petey]

This is NOT a "repair". It is an upgrade.

Tell them you priced the house as it is. If they want this upgrade the price will be higher.

 

[Daniel Holzman]

I basically agree with Petey, except I would frame it this way. Tell the buyer the house is for sale as is, allow them to determine their own price based on the assumption that they will have to fix the knob and tube wiring. If you don't like their price, of course you can reject it. I would never get involved in making fundamental repairs to a house for sale (structural, electrical, plumbing, flooring). I would consider making cosmetic repairs that might increase the sale price of the house, or allow it to sell faster, such as painting, wall coverings, landscaping, seal driveway, but leave the heavy lifting to the next owner.

 

[mpoulton]

As others said, the price you set and they agreed to was for the house you have, not some other house they might want to have. The existing wiring was code compliant when installed, and is safe to continue using. It does not NEED to be upgraded. They might as well ask you to paint the exterior and put in new carpet, too.

 

[kayleen4246]

The house was only listed at $63,000 and her offer was only for $61,000. We agreed to the $2000 loss because her real estate agent had agreed that the house would essentially be sold "as is". (This was communicated through our real estate agent to us). Well, she got a home inspection and came back at us with 11 different things she wants done. Some are small and not a big deal- some are a lot more complicated like replacing a window (it's not broken but the seal between the panes is open?) and wants the wiring in the attic re-done. I really don't want the deal to fall through but I can't afford a 5-10,000 dollar fix either.

I don't know if this will help or not but pics can be found on this site:
http://www.brenderealestate.com/

Go to "Our Listings" and our house is the second one down- Gray, selling for $62950.

Thank you so much for your replies. I feel like I'm totally out of my area of knowledge at this point.

 

[bbo]

agreeing and putting in writing are two different things.

I agree with Daniel, I would not do any of the heavy lifting, if you would like to counter offer and give them back an allowance, that is something to be negotiated. It all depends on what you decide to do.

For the electrical, I would not agree to replace all the K&T ... what happens if some is discovered in the walls after closing? do you have to pay for that too then?

good luck on the negotiations.

 

[Ocelaris]

You don't have to do any of the requested repairs, but like the previous poster said, you can give a discount, usually in the form of a "seller's concession" under the guise of covering their closing costs, and just list the stuff you WILL fix. They're just trying to bring the price of the house down further, and this also depends whether they had an inspection contingency in the contract. i.e. if they put a home inspection contingency, then they can get out of contract without penalty, if they didn't put a home inspection contingency clause in, they don't really have any bargaining power (i.e. they lose their deposit). Assuming they do, it's really up to you whether you think they'll walk, a small concession would be all I would offer, maybe $2,000 and fix some of the small things, but certainly no wiring or window replacement (I'd just seal it). Just make sure when you send back the counter offer you make it explicit only what you will repair, and everything else as "as-is".

 

[TheBobmanNH]

I know one experience from one person isn't much, but... we asked for a similarly large list of things when purchasing our first home several months ago... not expecting to get many of them done, and we didn't. Sometimes, it can't hurt as a buyer to ask even if none of it is a dealbreaker. Give a small concession, see if the buyer's come down at all in their demands, and move from there. If they don't budge, they really do want it all done and it'll be time to consider if it's worth letting them walk.

 

[mpoulton]

I buy and sell houses on a somewhat regular basis (rental properties). I do not use inspection items for negotiation when I buy, and I do not allow buyers to do it when I sell. I wouldn't fix any of those issues. If they don't want the house, they can find a different one. Someone else will buy it.

 

[sgip2000]

I have always wondered why people spend so much money on making a house "look" pretty when doing a flip instead of fixing the bigger issues.

I saw many houses like this when looking for mine. One owner moved a wall to make the kitchen larger, but took space from a bedroom.

Makes no sense to me.

 

[wkearney99]

I have always wondered why people spend so much money on making a house "look" pretty when doing a flip instead of fixing the bigger issues.

Because pretty is usually cheaper than actually fixed. "Lipstick on a pig" comes to mind. Yes, you might have the integrity and sense to want to do it right. But a lot of people 'flipping' actively plan on being as cheap about the effort as possible. They want to get it sold for as much as possible, with as little invested as possible.

I would not agree to the wiring upgrade. If they want to negotiate on the price, maybe. But that's only based on whether or not you want to get it sold now, or wait for another buyer. That's something only you can answer.

 

[firehawkmph]

I get a kick out of some buyers looking at a hundred year old home and expecting it be brand new. I once had a fellow come into a small new house we were building on an older street. The inside didn't have drywall yet, outside was basically done. He was acting as the buyer for his handicapped aunt. He asked how much the house was and I told him, $165,000. He then says he needed a deck with a ramp on the back, ramp on the front, some doorways widened, and I want the house for $162k. First off I told him he wasn't buying a used car, and as far as the extras, we could do that. But it would be $165k, +the deck, +the ramps, etc. He started balking at that so I then told him, "I won't have any trouble selling this house, there's the front door, why don't you use it." He calmed down, ended up buying the house and paying for the changes, and became very friendly after that. Everybody feels like they have to try and beat everybody out of their money. Sometimes you have to call their bluff.
Mike Hawkins

 

[kayleen4246]

Thank you everyone for your replies. It helps so much to hear from people who have experience doing this type of thing. The only I wanted to say, in response to sgip2000- I was never trying to flip this house or just trying to make it look pretty. I bought the house 6 years ago but it quickly became too small after being married and having children. My brother than lived in it for a while but was laid off and couldn't cover the mortgage anymore. I'm not really wanting to pursue being a landlord to a stranger so I put it up for sale. Any issues that I knew of I fixed correctly prior to putting it on the market so I was just very surprised when 11 requests for repairs/changes were sent back to us following the inspection. Especially with the attic wiring because that was never even mentioned as a problem to me when I had my inspection done about 6 years ago. We're going to have an electrician come in and look it over to verify everything is fine with the wiring (i.e. it's safe) and than will most likely send a counter offer back saying we will fix the smaller things she asked for but that the wiring will be left as is. Again, thank you all for your help. Happy New Years!

 

[wkearney99]

Especially with the attic wiring because that was never even mentioned as a problem to me when I had my inspection done about 6 years ago.

Which doesn't say much for the thoroughness of that inspection. Not all are done as well as you might think. But you're on the right track having your own electrician take a look at it. Who's to say the prospective buyer and inspector aren't over-stating the concern? It's all about negotiating and some folks have more stomach for it than others. Me, I don't mind a good haggle now and then. After all, if you don't ask... you don't get.

 

[bbo]

sometimes with a first offer, you need to set boundaries too, as both buyer or seller.

when we went to buy this house, we actually bid on another house. we determined that X$ was what we could afford with payment, interest rate, taxes, utilities,, etc.

with first house we bid on, the seller wanted more than X$ and his Realtor told ours that it would just break his heart to take less than asking. we walked away without counter-offering and had word passed to them that we made our max bid and would be looking elsewhere. That house ended up selling for 10k less than our offer about 1 year later.

the next house we bid on we left some room for negotiation as it was in a community with lower taxes. we never mentioned it to the Realtor showing houses so she told the selling Realtor that we just walked away from another house after that seller tried to counter offer. they accepted ( I liked this house better myself.)

moral of the story, do what's best for you since you are the one looking out for yourself. Real estate agents are most interested in quick sales, not getting the highest price for the seller or the lowest price for the buyer. realize that the more time they spend on a client, the lower their hourly pay goes. Only you can determine what price you will accept or pay, don't get forced into something you are not comfortable with.

That said, let us know how it works out.

FYI, for such a small house, it does look very appealing from the photos.

 

[sgip2000]

Thank you everyone for your replies. It helps so much to hear from people who have experience doing this type of thing. The only I wanted to say, in response to sgip2000- I was never trying to flip this house or just trying to make it look pretty. I bought the house 6 years ago but it quickly became too small after being married and having children. My brother than lived in it for a while but was laid off and couldn't cover the mortgage anymore. I'm not really wanting to pursue being a landlord to a stranger so I put it up for sale. Any issues that I knew of I fixed correctly prior to putting it on the market so I was just very surprised when 11 requests for repairs/changes were sent back to us following the inspection. Especially with the attic wiring because that was never even mentioned as a problem to me when I had my inspection done about 6 years ago. We're going to have an electrician come in and look it over to verify everything is fine with the wiring (i.e. it's safe) and than will most likely send a counter offer back saying we will fix the smaller things she asked for but that the wiring will be left as is. Again, thank you all for your help. Happy New Years!

I wasn't saying you were trying to flip it. I was just making a general observation.

When I was in the market, I saw several that were "flips" and didn't make an offer on any of them as they were just "polished turds".

 

[kayleen4246]

Just an update- We had two electricians come in and look at the wiring. Both said it was safe and in great condition with no need to replace it. Their estimates were between $1000 & $2000 to completely replace the knob & tube wiring. We counter-offered saying we would do everything but the wiring and the window on her 11 item list. Her agent said that her loan would be contingent on the wiring being changed so we offered to go half and half. She wanted no part of that and demanded that every single item on her list be completed PLUS she wanted us to come back in the spring to fix "anything else" that may come up. I didn't even know that a buyer could ask for that. We chose to walk away at that point. The house is going back on the market and *hopefully* we'll get another offer soon. Thanks everyone for your help!

 

[bbo]

Just an update- We had two electricians come in and look at the wiring. Both said it was safe and in great condition with no need to replace it. Their estimates were between $1000 & $2000 to completely replace the knob & tube wiring. We counter-offered saying we would do everything but the wiring and the window on her 11 item list. Her agent said that her loan would be contingent on the wiring being changed so we offered to go half and half. She wanted no part of that and demanded that every single item on her list be completed PLUS she wanted us to come back in the spring to fix "anything else" that may come up. I didn't even know that a buyer could ask for that. We chose to walk away at that point. The house is going back on the market and *hopefully* we'll get another offer soon. Thanks everyone for your help!

It's hard to walk away from an offer, I understand, but the last part about coming back in the spring to fix "anything else" serves as a red flag that there would have been something major.

 

[rrolleston]

That's crazy she not only wants a house in perfect condition she also wants a maintenance contract. Maybe the realtor should suggest she buy a new home with a maintenance contract.:laughing: