Asbestos, Electrical & Lead - Oh My!
I could really use the advice and opinions of all the experienced homeowners and realtors who look at these boards. I love this board and find it a great source of unvarnished opinion and great advice. I used to post a lot but we unexpectedly expanded our family a year ago and I was relegated to being a lurker. This is a bit long but I want to be clear and give enough information to get some good advice, if you don't mind.
I recently placed a purchase contract on a 70 year old but charming home in a great neighborhood in my area. I'm in Metropolitan DC which saw a huge run-up in price between 2000-2006 . We have seen some of that escalation erode but not as much as other areas like California, Florida etc.
One expects various problems when purchasing a home built in 1940 but I'm a bit overwhelmed by the results of the inspection.
There are various minor issues like a few cracked window panes, a leaky faucet here and there, a deteriorating driveway, a 30-year old hot water heater, a main drain pipe at the point of failure etc. that I'm willing to overlook and handle myself without asking anything from the seller. However, the inspection uncovered five areas of great concern to me. Actually, that's an understatement. I'm somewhat freaked out.
1. Electrical The inspector thinks the electrical system is shot. The electrical panel was hanging away from the wall. The main panel is a spaghetti pot of wires that reflect the history of American wiring in the 20th century. It's all present from Knot and Tube to BX to Romex. There is aluminum branch circuit wiring . Aluminum is spliced to copper. It is overloaded and has two loose circuits. The panel is so crowded that inspector had trouble removing and replacing the cover. 90% of the plugs in the house are two pronged plus there are no GFCI outlets in the older bathrooms. The panel is connected to two large, old BX electrical cables which also seem to be holding it up. The only smoke detectors are outside the bedrooms.
Also, the above ground electrical wires to the house are drooping down to about 10 feet above ground. They are hanging down over the front entry sidewalk. Funnily enough, these wires do not appear in any of the marketing pictures taken when the house was put up for sale. Anyway, the utility company should fix the problem but will likely have to add an additional mast to the roof or possibly a new utility pole in the front yard. Imagine what that will do to curb appeal. Also, the utility company will likely cut the top off a gorgeous pine to free the wires from their current home among the branches. We asked the owner about it and received a blank stare and a shrug.
2. Lead-based paint Â it's an old house so, of course, lead-based paint is present. There are multiple layers of wallpaper with at least two coats of paint on top.....everywhere. Now, if we have to go cutting into walls to rewire the house are we at risk of creating a lead-based paint problem with all the dust?
3. Friable Asbestos Â There is friable and degrading asbestos in the crawlspaces and in an old, unused boiler in the basement. The crawlspace also needs to be re-insulated. This crawlspace is situated under the master bedroom. The inspector strongly recommended asbestos remediation which can range from encapsulation to complete removal. I have a compromised immune system and am afraid of the health risk to kids, cats, dogs, and me.
4. There is a de-commissioned underground heating oil storage tank. The owner believes it was emptied but does not know if it was filled with sand. The inspector recommended it be removed and said the EPA has money available to assist. He also said it would be a good idea to have the soil tested. We are already having the well water tested.
5. The kitchen in the house was remodeled along with the master bathroom a couple of years ago. The inspector took one look at the electrical box and wondered if permits had been pulled for the work. We asked the seller and he said yes, permits had been pulled. We asked to see them. He e-mailed us today that he checked with his contractor and permits were not pulled because his contractor felt the electrical and plumbing work involved was so minor it didn't warrant permits. Any thought on this?
Now, this house was priced $130,000 over the comps in the area. It's been on the market a year. The sellers lowered and we came up but the house is still priced $80,000 over the comps. I bit because the house has a unique charm and character that is rare in my area and the lot is terrific. It also has a first floor master which I really want plus a remodeled master bath. On the positive side, the heating system is brand new and the roof is in great shape.
The owner believes I am "stealing" his property at the current price. He bought the house in 2004 and initially wanted $300,000 more than he paid. He has lowered substantially in the last year. However, sales prices in his zip code and the neighboring zips are now about 5% below 2004. The seller is FSBO and disclosed none of the above. I don't know if he had an inspection in 2004 and is just unaware of the problems listed above. The owners were packing on inspection day and had taken down all the pictures and packed up the knick-knacks. There are three contingencies in our contract that have yet to be satisfied so I was most surprised. I have a realtor and am putting down 55% of the purchase price in cash and financing the rest.
I haven't talked to my realtor since I got the inspection results this morning. Are these significant problems? Should I run for the nearest exit, ask for a massive price drop, have them correct, or renegotiate and arrive somewhere in the middle? Opinions wanted. Thanks in advance.