Zillow is often very inaccurate..so that may not be your best bet in determining fair selling price.

That said...if the work is DIY..no permits or finals...you really don't want the headache of having to handle that as the new owners...because you have no idea what they did...and his liability for anything done improperly will then be your liability....especially in a state such as in our lovely NJ..just about the most litigious state in the country.

In addition, some towns here fine for no permits..charge back taxes..etc..and as a new owner..that becomes your hassle..

..that said, check if the town has a website..or call them...find out what is and is not needed..and the penalties involved (if any) for DIY without permits and finals...then discuss the options with your attorney first thing...and get his opinion on the best way to proceed in terms of handling the issues...as well as negotiating a better price...or at the very least..escrow for repair.

"The appraisal has been done (by the selling agents appraiser),...)

Are you paying cash, or do you have a lender? If you have a lender, your lender should order the appraisal.

"After dropping a lot of money for a septic inspection, home inspection, radon inspection, termite inspection, and mold inspection I would rather not walk away from this debacle if I dont have to."

The money you've spent on inspections isn't much compared with the expense of owning a house with major problems. It's sickening to think of wasting that money and effort, but try not to let that influence your decision.

I know it's water over the dam, but did they really have a second higher bidder? That sounds fishy to me, seems like there's always a phantom "higher bidder" threat waved around during negotiations. Are you 100% certain that bid actually existed?

and if it existed, is it even still around?

They won't want to have to start over either, plus any NEW buyer will have some of the same concerns.

And definitely, don't rely on an appraisal done by someone who isn't on YOUR side of the equation (I'm starting to think you can't rely on an appraisal period, but at the very least, it should come from someone looking out for your interests, or your lender's interests)

Thanks for the replies everyone. To answer a few questions brought up:

My lender was notified to perform the appraisal- and I am clarifying with her that it was her appraiser. We overheard from the selling agent during the inspection that the appraiser 'was a friend of hers' and raised our suspicion even more.

The inspection company was hand-selected by me. My buying agent tried to get me to use her inspector, but after this phantom bidder came around, I decided to forego any other offers of 'Use these guys for...x...' from her. And boy, am I glad I got my own inspector. He kicked ass.

This mysterious phantom bidder (I was told) cannot come back with any other bids after I went up and over their offer. What I was told is that they cant come back and go over my second bid.

Forgive my noob-ness at this stuff. Its tough for a first time home buyer to get much info from the limited resource offered by some buying agents. Thats why I have come to the internet.

This is a buyers market. I dont want to pay more than LP for the home that had been on the market for over 3 months going into 2008, and in light of these issues brought up, the added inspections, and the most important thing..the time spent...i dont want to walk way without coming back with a justified final price that I am willing to pay.

I have previously asked the town for all work permits/building permits issued to the address but it might not come back in time for tomorrow.

Once again, TIA for all the feedback. It is greatly appreciated.

I'm having a mold inspection performed this afternoon (Home inspection revealed the possiblity of it in the boiler room) but those results wont come back until early next week. :-(

MrOrange (believes in karma a great deal. Do unto others...)

mrornage: "This mysterious phantom bidder (I was told) cannot come back with any other bids after I went up and over their offer. What I was told is that they cant come back and go over my second bid."

In NJ, if you are out of attorney review..which is apparently the case...the seller and the buyer are now bound to the sale/purchase contract conditions that were agreed to by both sides. In other words the sellers can no longer renege on your deal for a higher bid.

That said..what does your contract state are your options with regard to inspection issues?

PS Glad to hear that you were happy with the HI and the inspection. :-D

Logic, to answer your question:
That said..what does your contract state are your options with regard to inspection issues?

Our attorney (provided by our buying agent... phhft) has yet to give me an accurate idea as to what our options are at this point.

Frankly, the communication skills exhibited by everyone I have been involved with in this whole process (save for the inspectors) is much less than expected. Almost like there is this veiled layer of secrecy to everything surrounding my transaction. I'm not in the inner-circle, have all the money to spend, and they want to take it all from me.

We are out of attorney review. Does this mean I dont have many options to lower the re-upped price from my second bid down to something much more reasonable? I was hoping to come back down under LP a decent deal. No way am I paying LP+14k for something that is worth about LP-25k. Or less.

MrOrange (maintaining a calmness before the storm)

From what you've written, it sounds to me like you need more time to determine if the price you've agreed to is fair, but that you also need to respond to the inspection clause promptly.

If that's the case, I'd suggest you use your repairs list to fine-tune your price. Be very agressive in your list of requested repairs and corrections. Throw in everything your inspectors brought up and ask that they hire licensed, bonded contractors to correct it and that the sellers obtain permit waivers (or whatever their called) for their DIY work from the city. Your list should be as long and burdensome as it can be without making you look like a total jerk. (Looking nervous is OK.) The sellers will need time to formulate a response, price out your requested repairs and get bids, and you should use this time to get all of the information you will need to determine in your own mind what price is fair and appropriate for a house:

- in "perfect" condition (they get everything fixed),
- in "good" condition (they do everything important), and
- in "acceptable" condition.

There was something about the house that attracted you, and at some price, if it's in decent shape for that price, it's a fair deal.

I'd suggest you use your repairs list to fine-tune your price.

Oh, is THAT what the home inspection is for? I never would have guessed.

Thank you sweeby, I will use my inspection report like a gun-toting Michael Douglas in the movie Falling Down. Specifically, the scene where he goes into the korean-run grocery and commits his first crime. He isnt sure what to do, and by the time he figures it out rather clumsily he is on his way out the door.
But thats where my crime spree will end.

On a more serious note, the words of the selling agent are still rubbing raw with me, just knowing that she knew the appraiser. Might be from another sale, who knows.

Collusion does sound an awful lot like collision.

Later on tonight I should have the appraisal in hand. Here is to praying that it didnt come in over LP.

MrOrange (in a stabby mood today just thinking about this)

MrOrange, unless your attorney is a total moronÂÂand/or on the takeÂ..your contract should indeed spell out your options with regard to the inspection issues.

That said, considering that one and/or both of the above could be true of your attorney, you will need to be very pro-active in protecting your interestsÂÂas apparently no one else that should be doing so has so far.

Traditionally, what I have generally seen is that the seller is given the option to repair/replace. Â.or the buyer can walk away.

Often times, the contract may state that the buyer wants escrow held, to have the work done on their own...as it is hard for most to trust that the seller will do the work the best way possibleÂÂespecially considering that he/she did not even do so for their own benefit.

As far as I know (and, I am not an attorney so donÂt take this as gospel) unless your contract contains language specifically precluding such, you would have the option of offering to pay less for the house instead of the escrowÂÂit would be up to the seller to agreeÂ..or notÂ.or to counter otherwise.

However, in your case, work done with permits and final inspections can open up a whole other can of worms, that you would be far more prudent to have the seller resolve.

Take a look at your contract. Come back here and tell us what it says...

and there was a list of things that werent properly maintained on the house by the sellers. A lot of DIY stuff to the plumbing, electric, 40+ year old gas furnace system, structurally deficient deck, impoperly graded backyard. Not pretty.

I would be interested if your contract says you can threaten to walk if they do not replace the furnace even though it appears to be in working order (since you didn't indicate differently) or if you can get out of the contract if the seller refuses to regrade even if there is no evidence of water intrusion or structural damage.

I do think you have a case for consideration of the electrical, plumbing and the structurally unsound deck.

I am confused--I thought that once the contract is signed, the price is binding on *both* sides of the table. So the seller cannot try to take a higher bid, but you seem to be saying that you don't feel bound anymore by the purchase price on which you signed a contract. You indicate that now the inspection has revealed issues, your feeling is negotiations are again open and you want to lower the price agreed upon. If so then the seller would seem to have the right to shop the house to anyone who may want to pay a higher price. I don't think you can have it both ways.

And too it sounds like some of what you are horrified to have revealed by the inspection is pretty much what you should expect in a 40-year old house. Obviously, if things need to be fixed, ask that they be fixed. But I don't understand how an inspection is a license to request that an old house be brought up to fully equal new construction status dwelling or else the buyer walks.

It sounds like you may have a bit of buyer's remorse having had to up your bid because of the other buyer. Very understandable, but try to remember why you thought the house was worth the bid you put in. You must have felt it was, or why would you have put in a higher offer?

From this point, as you seem very uncomfortable with what you have offered, I would take Sweeby's advice and ask for everything in the report. This may give you a way out if you want one - or the seller will fix everything (or some things) and you will feel comfortable that you have a house which is in good shape.

I would be amazed if anyone other than your mortgage company hired the appraiser. I have never heard of that before unless someone hires an appraisal to let them know the value of the house prior to listing or making an offer.

Remember that your attorney works for you. Ask whatever questions you have.

It sounds like you are feeling a bit overwhelmed and are regretting your purchasing decision and especially the price you offered. Ask for everything on the home inspection list and see what happens. You could also say that you willdo all repairs yourself, and ask for a dollar amount to cover those items. But you will almost certainly need to get quotes for the work.
This will get you a sound house at the price you offered, but won't get you a sound house at less than the asking price.

You offered 9K over asking price in a falling market. There are voices inside you telling you that something isn't quite right here. You need to listen to them. Honestly, karma or no karma, I would use the inspection report as an excuse to get out of this one. Consider your inspection costs money well spent.

In my state, a buyer can walk at any time, for any reason (inspection related), during the contract inspection and resolution timeframe.
Or, the contract can be re-negotiated as to price and terms or repairs, if the buyer is asking for seller concessions.

I am confused--I thought that once the contract is signed, the price is binding on *both* sides of the table.

In NJ there is a three day "attorney review" period after the contract is signed by both parties in which the attorney for either party can suggest ammendments to the contract. As long as there are negotiations over ammendments going on the attorney review period is in effect so it can stretch out longer than three days. Either party can back out of the contract within those three days, although I don't think they can just because they got a higher offer. But either party can instruct their attorney to make amendments to the contract that the other party would never agree to which would be a way out of the contract.

It really depends on how the HI clause is written. In my experience with the standard contract the REAs use the clause is written in such a vauge way that what is considered a material defect is up for dispute which would take a court to decide. Of course the people on the buyers side can take advantage of that vaugness.

Having just been through a similar situation with similar inspection issues, I know how difficult it is to make a decision of whether to continue the contract or get out. In my state, the buyer could walk away because of any inspection issues, or present a list of things to be fixed or an amount of money to be credited to the buyer.
In hindsight, I wish I had been more aggressive, even if it had meant that the contract terminated. I now have all these house issues to contend with (even though they are not major).
I would make sure that the seller get a copy of the inspection report pronto (certified mail is best) because once he/she knows of home defects, he/she must disclose to future potential buyers.
Also, after a major septic issues that my daughter is dealing with, I'd advise that you get money credited to you so that you can be sure that the repairs are done correctly.
Good luck
Susan

"A lot of DIY stuff to the plumbing, electric, 40+ year old gas furnace system, structurally deficient deck, impoperly graded backyard."

You haven't said if there was anything actually wrong with the plumbing or electrical. Any leaks, any safety issues, etc. Just because the welding on the copper isn't as pretty as a pro might have done it doesn't mean you get to discount the house price for it. What are the actual issues?

If the 40 year old furnace works and the house wasn't priced like a house with a new furnace, I don't see the issue here as well. Friends of mine bought a house with a 37 year old furnace 5 years ago. No issues. Maybe not the most efficient thing in the world, but it works and it passed safety inspections.

Improperly graded back yard? How long ago was this grading done? 40 years ago? Unless there is a water problem due to this improper grading (did the guy actually use a laser level around the house to do this?) I don't see this being and issue.

Need more info on the deck to comment. It could be as simple as sistering a few joists or adding another support post.

It's a 40 year old house, correct? I think you know you over-countered on the price and now regret it.

runninginplace I am confused--I thought that once the contract is signed, the price is binding on *both* sides of the table.

Financing, appraisal and inspection contingencies may make the original contract null. That is why the OP may have an out. If the house doesn't appraise for XX dollars, if financing cannot be obtained, if the inspection turns up safety or health issues, etc. The contract price, dates, etc can be renegotiated at this point to satisfy any contingencies.

As to whether or not the buyer feels s/he is overpaying and wants out, of course s/he does! There are $20K worth of unexpected issues on this house. That drives the house price up to $389 on a $360 list in a buyer's market! Honestly, mrorange if this deal is not a great value at $389K get out and get out now. Whatever expenses you have incurred are minor compared to a nearly $400K mistake. And the next time around, find a good real estate attorney that you trust.

Xamsx;

Not sure I agree with your post. Yes there are 20k worth of repairs that need to be made to the house. They buyer is going to request that they fix the issues. Assuming they fix everything he asks for he will not be paying cent more than he offered; $369,000.

However the buyer is already upset that he is paying over the asking price of $360,000 for the house.

He hasn't had a response from the sellers yet. If they decide not to fix everything then the OP will have to think carefully about whether the home is worth $369,000 plus however much it costs to fix whatever the sellers won't.

My guess is the buyer will try and kill the deal as he is feeling buyer's remorse and is upset that he offered $9,000 over the asking price.

Honestly if the seller's do offer to fix most things and the buyer asks for so much that it kills the deal, I will feel bad for them as they did nothing wrong other than accept an offer.
I totally understand the buyer's feelings, but really he shouldn't have offered more than he was comfortable spending. This may end up being an expensive lesson both for the buyer and the seller if he backs out.

It's a difficult situation.

The 20K estimate was made by the OP, it seems without consulting any workmen.

They may have invented the phantom buyer to up the price, or not.
My feeling, you were in attorney review and they took advantage of that when another "buyer" upped the price. IMHO they should have followed through with the transaction with your accepted offer and not use attorney review to open up price negotiations when it is designed to iron out details surrounding closing schedules, wording etc.

If now during inspection period, you find significant issues that if you knew about would have affected your offer, that combined with the market conditions, just pull your offer.

In previous contracts that I handled as a Realtor we had an inspection time frame of normally 10 days from contract ratification. During this time the buyer had the inspection and submitted his report findings to the seller for any repairs he wanted completed. Contracts also normally had a clause stating that sellers would fix up to a certain dollar amount if the repairs went over that amount the buyer could walk. If the seller really wanted the deal then they started negotiating all over again. But if the house had major repair issues it (and we had some that weren't so major) - it was a definate out for the buyer. These were standard and this was 10 years ago (but in South Jersey - a different animal).

This all sounds very fishy to me. We found a house we liked on our first trip to Louisville but waited as we still weren't sure we were moving. When it became more clear that we were going to move after all, we put in a bid. Unfortunately, another bid had already been put in and accepted. Our bid was therefore a "second" in case the first offer/contract fell through. As far as I know, the first offer/contract wasn't re-negotiated because we put in an offer. We were a second and knew it. When the sellers wanted us to put in $$ to escrow and have our own independent inspection done while we were the second, we decided it wasn't worth it and walked away. We ended up finding our current house during the next visit and I am so glad we ended up here. If it's meant to be, it's meant to be. Sometimes karma is telling you it's not right, but you need to listen.

I've been reading this forums for 2 days straight non stop because we're in the process of selling our house, and this is the most ridiculous piece of advice I've heard so far. I'm sorry to tell you, but as a seller, if someone cam to me with this ridiculous list of things to do, we would sooner back out of the deal. Yes, we would do things that needed to be done do to code violations, and we would also do things that WE could do ourselves. But if you think a homeowner is going to start hiring all kinds of contractors and get on the phone to start calling and asking about bids, you are sadly mistaken, and you've been watching way too much HGTV. A lot of sellers rather just not deal with it, maybe they'll give you a deduction on the price, but to go all out like that. omg, that's crazy.

Put down the remote control, walk away, and step back into reality.

Quote:

From what you've written, it sounds to me like you need more time to determine if the price you've agreed to is fair, but that you also need to respond to the inspection clause promptly.

If that's the case, I'd suggest you use your repairs list to fine-tune your price. Be very agressive in your list of requested repairs and corrections. Throw in everything your inspectors brought up and ask that they hire licensed, bonded contractors to correct it and that the sellers obtain permit waivers (or whatever their called) for their DIY work from the city. Your list should be as long and burdensome as it can be without making you look like a total jerk. (Looking nervous is OK.) The sellers will need time to formulate a response, price out your requested repairs and get bids, and you should use this time to get all of the information you will need to determine in your own mind what price is fair and appropriate for a house:

Since Mrorange was trying to purchase in 2/08 and we have not had an update since, my bet is that there was no closing and he walked when the appraisal came in above what he was willing to pay.

Brand new poster also--poof all gone

WHY do people resurrect these old posts????

BECAUSE it's a topic that perpetually relevant.