First Home Purchase Help!

[Peter Sobotka]

I recently moved to NC from NJ. I am a first time home buyer. I am currently in the last week of due diligence on a house closing. My current plan was to purchase a single family split level home to be able to rent out the bottom level which has it's own bathroom, bedroom, den, and private entrance. Since I was being told I had to move out of the current place I am renting by the middle of this month (November) I made the decision to purchase the 4bed 3bath split level that was supposed to be completely renovated. Completely renovated means, Brand new kitchen with new cabinetry/countertops, tile, & stainless steel appliances. 3 full baths completely renovated with new tile and new vanities. My thoughts were I would avoid paying additional rent (for my own living situation), and would have the opportunity to start getting rent from the bottom of the split level.

Based off of the appraisal my current total purchase (offer less seller paid closing costs) is $3k under the appraisal. I'm already over $1k of costs in with the inspection, appraisal, and structural engineer costs. During closing the inspection came back with the following issues; related to the heater (3 years old, newer and running but HVAC guy going on Monday to try to figure out issue with it not heating correctly), electric (Zinsco, Electrician said should be fine but will give quote to fully test it), chimney (cracks in base of chimney on inside inspector said could just be from regular use, deciding whether to pay for additional chimney inspector), roof is less than 5 years old but does have some shingles that are raised, insulation is missing from the upstairs and insulation was installed upside down in the basement, other issues (toilets, fronts steps work not done correctly to code, tilework in shower, water shut off not in good location, etc.) and finally the upstairs has some structural issues with the upstairs sloping slightly downwards (only notice it in a 3 foot width) near the windows on the chimney side (I am waiting for the structural engineer report which I should get on Monday). The current contractor quote is $4.9k. This quote does not include any work from the structural engineer, tile work in the shower, the electrician, hvac, or chimney. The majority of the cost relates to $1.4k to fix the front steps which was not properly done to code (work needs to be permitted). I was planning to cut out about $1.2k of the quote by doing my own insulation and renegotiating the work.

I have only come up with two current options to consider. The first option is get the full quotes of repair based off of the engineer report, contractor, electrician, hvac, and chimney. Ask for the full repairs as a credit from the seller. The seller is an investor based off of zillow it was listed at $56.5k below my current bid in April. The property was then foreclosed to lender (in April) right at my current bid. The sellers repair order was quoted at $33k. If the seller will not give me the credit for the repairs I walk away.

Option #2 walk away now. Eat the costs I spent in trying to close. Try to find a place to rent month to month while I look for a different single family house to purchase.

Any feedback and different perspectives would be greatly appreciated! Let me know if you need any additional information.