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I KNOW our Realtor thinks we're nuts!

Posted by tinker_2006 (My Page) on
Fri, Apr 8, 11 at 6:20

We have all the estimates in to repair the old house we are in negotiations to buy. It need a new roof, septic tank and drains, all new electrical, window restoration and lots, and lots of other littler items (repair dry rot, showers, ceilings, etc)

The estimate is high (as we expected), in the $390,000 dollar range. We'll end up doing some things ourself, but for all the major items, we'll hire a contractor. We're pretty sure we'll be able to get this lower, to the $290,000 range.

The home is in SW Florida, very depressed housing market, but there seems to be a little heart beat of life starting...

So here is the current issue:

House is over-priced.

The house sits on a beautiful bay-front property, and the homes that sold here in when the market was good, was in the range of 1.5 -2.5 Million. The street has a mixture of houses, 75-80% are newer, Key-West style and others, old 1920-1930 cute cottage, beach style homes, and a few just old, 1960 plain ranch style.

Currently, one of the Key-West homes is on the market at 875,000 - but it's a short sale (and has been on the market a while). Another, ugly newer home is on the market for 1.3 million (and hasn't sold yet - on the market 6 months). One old, renovated home, no charm, just a plain style ranch was purchase last year for $595,000, remodeled and is on the market for $895,000. There is also another old, not cute house in foreclosure that is just under $500,000 (they are selling for land value only).

Okay, back to our property in question... I think the house is charming, a 1920-1930 old house, with beautiful floors and a sunny layout. The contractor is not an old home lover, and thinks we should buy and knock the house down and rebuilt new. Although my Realtor didn't come out and say that in so many words, he alluded to this thought as well. The land value is prime, and holds a higher value than the other home because it is 2x's as large, and has a beautiful pool area. We are trying to get the price down (have to get the price down) to make sense in investing money into this old home, and making all the repairs needed. There is no doubt that the location will always be sought after, and when property values eventually start to grow again, this area will rebound.

HOWEVER, once the repairs are made, and the house is beautifully restored, we'll still have an old house, wood framed (people view as a BIG, big disadvantage here in FL). It's not the "normal" Florida home, doesn't have all the hurricane codes, and we most definitely will limit the future, potential buyer market when we sell someday. DH thinks that the land value and location will always make it a salable property...?? So here I am, just throwing out some concerns I have been pondering about! Please tell me I'm not crazy for wanting this old house!

Here is a link that might be useful: house shows nice, but lots of repairs, updating needed.


Follow-Up Postings:

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RE: I KNOW our Realtor thinks we're nuts!

Like you said the house in not large...why on earth is the estimate so high. Unless you are going top-end with absolutely everything...like a slate roof, etc.

Also, from your pix...your roof looks fine, your windows look fine (way better than my 100+ year old original double-hungs that I love and am restoring and will last another 100 years hopefully).

I suspect you may be the type of homeowner who insists that everything be perfect...that's your right, not saying it's wrong....it's just the only way I can possibly see this house possibly getting an estimate for that much...if you told a contractor "fix everything that is not perfect". If this is not the case, then I'm just puzzled on how that house (and it is a very lovely house with tons of character compared to the FL homes I've been in, BTW) could possibly need 400K worth of work.

I would have been stunned if you told us your estimate was 100K...I mean on a moderate sized house, am I crazy in thinking you can get the place rewired for 10-15K tops? Septic for 20K? Roof for 15? How is this possibly adding up to 400K?

Sorry if you've answered these in your other posts, I know you'ev posted a lot about this lately, I have not read them all.


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RE : I KNOW our Realtor thinks we're nuts!

Also, and I say this because I've been through this with inexperienced home buyers when selling a previous (old..1930's) house, the home inspection is something you as the buyer do to get an idea if there are major issues needing repair that the buyer didn't tell you or didn't know about, to allow you to either decide not to buy, or to renegotiate based on the findings. So yes, if you wiring needs to be replaced to be up to code, then you do have rights to renegotiate if that was not made aware to you when you made your offer. If the wiring passes inspection, but you WANT all new wiring, that's not a valid cause to ask for a price reduction...same for the roof, the windows, etc.

What an inspection is NOT intended to be for is to generate a list of things that the buyer can either demand be fixed, or want money off the house for. That happened to me when I sold my first house, new buyers thought the home inspection was basically to generate a "punch list" of things I had to fix. Not the case at all!

From the looks of that house, I think the roof probably has life left it it (maybe a repair here or there...but that is not a roof that looks like it is at the end of its useful life), and the windows, while maybe not perfect, or the style you like, look to be structurally sound and functioning.

Old houses (and I've only ever purchased old homes) will always need work...the house in your pix is 20X better shape than the one I bought last year (1870's Victorian)...and I didn't ask for a nickel off the agreed price, despite the 100 or so things that the inspector pointed out to me, because I knew what I was getting...old windows, uneven floors, crooked door frames, missing storm windows, cracked plaster, etc.

Now if the inspection showed the furnace was shot...or the roof needed total replacement and not just the obvious few slate shingles replaced, that would have been a different story.


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RE: I KNOW our Realtor thinks we're nuts!

Twenty years ago a homeowner in an area I was building in was adamant he was going to preserve his 1950s bungalow rather than see it replaced by a "monster" home, so he spent hundreds of thousands in renos, additions and improvements. It was sold earlier this year for land value and demolished. IOW, whatever you spend to make the house safer or more livable is consumption not investment. The value is in the land.


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RE: I KNOW our Realtor thinks we're nuts!

Can't judge a book by the cover.. the pictures LOOK great, but we have had a home inspector AND a roofer there. The women JUST replaced a leaking roof, but didn't remove the old stuff or fix the rotten plywood. The roof is still leaking and the ceilings are moist and damage is still ongoing until the roof is repaired correctly. Now that she through another layer of shingles on, she drove up the roof price - because now both layers need to be removed (more labor, more dump fees).

Roof $23,000

(from report: Reviewing the county permits showed a roof permit pulled and closed October 2010. Description of permit is Re roof - Shingle over 1 layer
Shingle Only. The re roof does show some questionable techniques used and appears to have followed the design of the previous shingle roof.

The metal valleys are exposed (all valleys) which can lead to premature failure/leaks, lifting shingles above valleys which are filled with debris and
valleys run under the shingles in some areas and capped with roofing tar. All these conditions can lead to future leaks as the roofing tar will eventually
fail, water can and will run under the shingles and water will get in under the lifting shingles. Some valleys also do not extend past or flush with the eaves
and have caused leaks.

Other deficiencies noted are lifting shingles that have exposed the wood roof decking and loose metal flashing covering the rolled roofing above a
building header. This rolled roofing wraps above an existing piece. There is also one missing metal shingle that has exposed the roofing felt/paper.

There is a roof cricket near the front chimney that had exposed peel and stick for the rolled roofing and did show active leaks and wood decking damage
at the time of the inspection.

It is recommended to have the roof further inspected by a licensed roofing contractor. Corrections and repairs are needed to the recent re shingle.

Also important to note is that a re shingle (2 layers of shingles) will reduce the life expectancy of the roof.)

I will admit, I am picky, but the repairs that need to be done are not for the most part cosmetic.

Septic system, need to be replaced, per 2 septic companies. Tank is bank, drain fields don't work... Because of our water table, this has to be done differently.

Septic $13,000

Electric, no question this HAS to be replaces - we will not get insurance until upgraded. We spoke to 4 insurances, and it was confirmed. Although we only received one price quote, it was from a licensed electrician, it is possible we might find a lower price..

Electric $28,000

Windows, boy.. they are in poor, poor shape, none of them work, all need repair.. there are 45+ windows in the house, and we received 2 prices, one $110,000 (yikes) and the lower price @ $850.00 per window (which we will end up using, but still $ 40,000

More from the inspection:

From Report:
2.2 Door/wall leading into the kitchen area from the east side of the hose is not properly framed. There is no framing in the knee wall below the
window. This decreases structural strength to the wall. Recommend repairs.

2.3 Multiple areas of deterioration noted to most of the wood windows, common for the age of the windows. Recommend repairs. Several windows
are missing their screens.

2.4 The support base for the metal circular stairs to the roof is almost completely rusted out and shows other areas of rust that make using the stairs a hazard. Recommend stairs not be used until removed and replaced. Recommend replacement.

7.1 Several areas of wood damage to the exterior siding which do extend into the interior wall framing. No framing under the window to the left of
the exterior door leading into the kitchen area. Interior cracks noted in the master bedroom which may be caused by settlement. Recommend repairs.

7.2 Structural floor damage noted below the shower enclosure in bathroom 4. Recommend repairs.

7.3 Several damaged truss tails which make up the ceiling and roof structure and multiple areas of active roof leaks. Recommend repairs.

9.1 Typical of a house this age there are multiple panels through out the home, main panel and multiple sub panels. The panel located in the
improved section of the garage has several knock outs which leads the inspector to believe that the breakers that were used have been removed and re
located.

DUE TO THE MULTIPLE ELECTRICAL DEFICIENCIES FOUND THROUGH OUT THE HOME IT IS HIGHLY RECOMMENDED THAT THE
HOME BE FURTHER INSPECTED AND ESTIMATES OF REPAIR/REPLACEMENT BE MADE BY A LICENSED ELECTRICAL
CONTRACTOR.

9.2 Several open splices noted, open wires, hot open junction boxes and multiple sub panels noted. Typical add as you go condition found in older
homes. Recommend further inspections and estimates of repair/replacement by a licensed electrical contractor.

This whole report is long and goes on and on. The house is old, and hasn't been cared for and need repairs, and the photo's just don't tell the story do they?


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RE: I KNOW our Realtor thinks we're nuts!

I am going to suggest that you post your original post on the General Forum at oldhouseweb . com.

You will get tons of insight from old home owners, many of whom have hired out work and many of whom have done work themselves. It's a much more active forum.

Hopefully I will see you there.


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RE: I KNOW our Realtor thinks we're nuts!

It wouldn't cost you any more--and maybe less--to replicate this house rather than effectively rebuild it.


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RE: I KNOW our Realtor thinks we're nuts!

worthy, maybe in your location it wouldn't cost as much, but here.. it would be WAY, WAY more. We JUST built a brand new home 3 years ago, and we already received ball park figure for our new home we were going to build, and that new home did NOT have 3 wood burning fireplaces, heart pine flooring.


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RE: I KNOW our Realtor thinks we're nuts!

I'm thinking this is probably not the house for you...

A house like this is better served by someone who can tolerate the imperfections and flaws of an older house and tackle the issues, over time, after living with them for a while and realizing which ones are critical and which ones are just the inspector doing his job.

My inspection report was full of all the same kinds of stuff....most old house inspections are. I'll probably live in this house for another 10 years or so...until my kids are both off to college or jail (joke). Will I get to even 50% of the things pointed out to me in the inspection...probably not. I'll probably only get to the ones that are either critical to prevent serious issues down the road, or the ones that are important to me, like making sure the windows in my kitchen and bedroom operate smoothly, since those are the ones I use, stuff like that.

But I know I will leave the house in much better shape than I bought it in...and that should be the goal of anyone who owns an old home.

Good luck which ever way you decide to go!


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RE: I KNOW our Realtor thinks we're nuts!

mkroopy, thanks for your opinion, but I'll make that final decision. I have lived in 3 other historic homes, with imprefections, where not talking imperfections here.. a leaking roof, unsafe electrical wiring, a septic system that won't hold crap (pun intended :/ ) I'm more than willing to live with imperfections! Our previous homes we broke our backs doing 90% of all the restorations, this time, we're older, have a bit more $$ and will hire someone to fix the major flaws.. that is *IF* we get the house.


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RE: I KNOW our Realtor thinks we're nuts!

Spending $290,000-$390,000 to repair that property illustrates a certain tenacity. Best of luck!


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RE: I KNOW our Realtor thinks we're nuts!

Tinker if this is what you want to do, I say go ahead. You have outlined your situation and it sounds like you understand full well what you're getting into.

That said, a couple of stories:
We have lived in the same neighborhood for 15 years. We rented for about 6 or 7 years, then started to house hunt--only in our neighborhood. We found THE house. We bid higher than reasonable and were confident we would get it, and didn't. It was bought by a developer for 30% more, who reconfigured the antique house so that the lot could be split and added two really ugly condos. We were aghast, and I can't believe I still have to look at that thing every day (we pass it on the way to dd's school).

It was the best thing that ever happened to us, because we learned that you can lose your dream home, and life goes on, and unbelievably, better dream homes came along. We bid on 3 more "dream homes" in our neighborhood, getting a little more cocky and skeptical every time. I live in the fifth house we tried to buy, 4 years later, and we're very happy with it. We got a great deal, and it's head and shoulders above the first house we went for.

So, as much as this house speaks to you, keep in mind, other houses can still do that too. I recommend taking 48 hours and looking around in some other places, with a different realtor. Look on craigslist--you will see things that don't show in mls listings. I have a friend that was house hunting in two of the most expensive towns in our area, my modest mid-range town wasn't even on her list. But she stumbled on a listing in Craigslist, and now has twice as much house, just as good a commute, and far better schools than she expected. Before you commit to this house, think outside the box. Heck I wish 2000 people like you would descend on Galveston, TX and invest in those crumbling victorians. Or Brunswick, GA. Just look at this:
http://www.realtor.com/realestateandhomes-Detail/817-Egmont_Brunswick_GA_31520_M63142-27459

or this:
http://www.realtor.com/realestateandhomes-Detail/815-Albany_Brunswick_GA_31520_M60146-44621

I'd buy the second house just to get a tree like that.

Finally, if you are open to spending that kind of money on preservation, from a stewardship standpoint, it makes more sense to spend the money on a house that won't be torn down when you move on. Could you look in a more historic district where these types of homes are valued? If you can live with the idea of your work being undone, then I guess you're ok, but knowing with certainty that the work I put into my house would be ripped up would drive me nuts. But that's just me.


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Why not a castle?

if you don't mind bidding against me :-)

Here is a link that might be useful: trube castle in Galveston


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RE: I KNOW our Realtor thinks we're nuts!

slateberry, oh my gosh.. love those houses you listed! Some great advise given, thank you. The main point you mentioned is that we could buy this house and someday sell it to someone who will tear it down, that is food for thought. Here is my biggest issue at looking at other old homes in our area.. they just aren't here! There is no historic properties (just one small section of about 10 house and it's over my budget). Most all old homes have been destroyed to build newer. Other old homes left are just in neighbors I wouldn't drive through. There are some old historic towns nearby, but that's not an option for us.

We just realized another major issue, and that's with FEMA (Federal Emergency Management Agency). On this home we can only spend 50% of the house's tax appraisal value, which means, we can only spend about $85,000 to fix this house. If we want to go in and fix everything, we would be forced to raise (elevate) the entire house. We would be able to spend another chuck of money after 1 yr of finishing the first chuck.

A lot to think about, but knowing this, the house at this time is really only worth the land value, and the seller may not agree. I'm not sure what we'll be doing!!


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RE: I KNOW our Realtor thinks we're nuts!

I hear you tinker, when we were house hunting in Phoenix, there were so few older homes. It's not called Phoenix for nothin'--burned to the ground and risen from the ashes 3x. There are a few neighborhoods of older homes left, but really not a lot. When we were looking there was only one house remotely in our size range on the market. But like yours, it was a beauty.

Can you rent for a while? we submitted 3 lowball bids on our current home, 3 months apart. Never changed our offer price. After various deals fell through, the seller was glad to deal with us. With all the issues with the house you're interested in, it may be easy to let other buyers demonstrate its value (land value) with their offers. Nothing like sitting on the market for a few months to bring them down to reality. Of course this will only work if you can live with some nutcase overbidding and getting it. It does seem that anyone who goes through the inspection process would arrive at the same conclusions you have, but you never know.


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RE: I KNOW our Realtor thinks we're nuts!

slateberry, we are fine where we are, and can stay with no pressure. The house actually has been on the market over 1 year, and NO offers, we are the first.

Went for a drive today, to another town over, and found some really nice older homes! Moving to another town is just NOT an option, but I'm surprised how little our city has compared to the next city over. House after house, I gobbled up the exteriors!

Well, the seller is away till after Easter, and I myself and leaving in the morning for a couple weeks... so it is a wait and see at this point!


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