First-time homebuyers under contract for a 60-year-old house-- how serious/expensive are these problems: aluminum wiring, friable asbestos insulation, termites, undisclosed window leak causing water damage? Along with original plumbing and an old HVAC, is this a pretty standard situation that falls under the umbrella of "all houses are going to have some problems, no house is perfect" and is this the kind of stuff they mean when they say you'll be spending 1%-ish of your home value on this kind of stuff every year? Or are these costs and issues on the high side, and this is probably on top of another 1%-ish every year on other repairs and maintenance? Help us put this in perspective!
(We need to decide whether to give the sellers' relocation company the right to cancel our contract by requesting repairs. And we need to figure out what we should fix and how much it'll cost if we go ahead and buy the house without repairs.)
Details and more specific questions below, or feel free to skip and just give us your general opinion based on the question above the fold:
The inspector found the house has aluminum wiring-- the sample of outlets he checked were switched to copper but using methods the CPSC recommends against. We talked to an insurance broker who said 6 of the 8 companies he checked with will not insure a home with any aluminum wiring. For safety reasons I'm pretty sure we'll want to at least do one of the CPSC approved fixes
that costs probably $1000-2000 I think (AlumiConn connectors, or maybe do the better but more expensive Copalum crimping), but maybe we should be thinking about re-wiring the whole house, which costs tons? Does anyone have insight on this? How scary and unsafe it really is, how much it costs to address it different ways?
Inspector was almost certain it's asbestos though you can't say so without testing. It's just one square. It's friable/will come apart in the air if disturbed. It's in a small room that holds the water heater, HVAC, etc and where we'd probably keep the cat litter, so I'm guessing we'd probably bump into it at least occasionally. How important is it to contain or remove it and how much might it cost?
They disclosed termites were present through 2009 when they switched termite companies and treatment (to the Sentricon system.) They claim the termites are under control since, there has been some eating of the bait but no visible termite infestation or damage. In 2013 they replaced the whole back wall which had prior damage (they claim it was "just to be on the safe side," and they installed some nice new floor-to-ceiling windows), and have a certificate from a structural engineer saying it's sound. Their termite guy says the termites probably came up through a crack in the foundation (slab on grade, no basement.). We're having a termite inspection tomorrow but they only look for visible presence/damage and I keep imagining hidden termite damage everywhere. How big a deal is this? (House is in Maryland, by the way.)
They failed to disclose it, we found out about because they filed and then retracted a homeowners insurance claim which came up when we started looking for homeowners insurance. They said water came in once in a big storm and leaked down to the bedroom on the level below (and that they have only had one other very small window leakage problem in their 7 years there.) They say it was a problem with the caulking which they repaired, and that the damage was all cosmetic and they just patched the drywall. Because they failed to disclose and we didn't find out until after the inspection, our inspector did not give any special focus to this area to check whether there is mold or other damage. Is there a serious chance that there is mold or other damage that they covered up? (Is there anything I can check/figure out regarding this when I go back to the house tomorrow for the termite inspection?) Should we be worried that because they didn't disclose this (the form clearly asked "whether water problems or dampness conditions ever existed"), there's other undisclosed stuff we didn't know about?
This is on top of things like the plumbing and sewage line being original to 1951 and probably needing to be replaced soon, the HVAC being 20 years old, lots of big old trees in the yard that may eventually need to be removed, etc. And the fact it was a flip in 2007 so someone was doing work on the house without worrying they'd have to live with the consequences. On the other hand, it has a great newish aluminum roof and our inspector said it's really well built and most building materials are above-average quality. The other problems he found were relatively minor and would probably take a couple thousand to fix total (as best as we can tell.)
We're buying this through a relocation company and they put an addendum in the contract (which states it overrides anything else in the contract if it conflicts) that says that they will either 1) fix all problems or 2) cancel the contract, although the homeowners are the ones who made the decision on picking our offer. We were initially under the impression that the relo company typically just fixes everything you ask them to (and that's why we made an offer at the very high end of the price range we were looking for), but unfortunately the selling agent didn't understand the addendum and originally told the homeowners that we had waived our right to request anything and now keeps threatening that if we report any defects they'll be glad to take the opportunity to cancel the contract and find someone else. (Our agent thinks she's pissed at us and making us the bad guys with the homeowners because she dropped the ball on explaining to them how the addendum worked and that we do have the right to request repairs.) We're worried they'll do it... their requested close date is still more than 6 weeks off, and we were one of 3 offers within five days on the market, and we beat the runners-up by only $1000 through an escalation clause (although the runners-up only had 10% down and we have 30%.)
We really like the house in general and love the location, and the market is SO slow right now (although we don't have to move urgently) and we've locked in a great interest rate that maybe we'd never get back to again. And we are tired of house-hunting and don't want to have to redo all the inspection and mortgage stuff somewhere else. And we have enough in savings to cover these repairs easily. And we're not sure whether they'd actually agree to fix the wiring or remediate the asbestos even under normal circumstances, let alone the current situation where our agent thinks their agent really doesn't like us. But we also feel kinda ripped off and bullied and frustrated about the idea of not asking for anything, and are also nervous about additional undisclosed stuff. It seems like a game of chicken.
As first-time homebuyers we're having a hard time figuring out how to put these problems and costs in their proper perspective (despite tons of stressed-out internet research.) How important is it to fix these problems and how much might it cost us? Should we just accept these issues and risks, given that we can afford to fix them? Are they within the typical bounds of "all houses have issues, a different house will just have different issues"? Or should we put in a request for them to rewire the house (or do a cheaper remediation) and fix the asbestos, and see whether they'll cancel the contract on us or not? (I know you can't really answer that and it depends on our risk tolerance, but any advice appreciated.)