Repair/Replace after inspection

[Eric Gomez]

Hello BP community,

Looking for some advice here. After home inspection 3 big ticket items came up:
- Major repairs in roof. Roofer & 1 GC already recommended re-doing, both with similar estimates of 20K for an 900 SF flat roof.

- Main beam twisted and loly columns - bones of the house and that worries me

- Back wood stairs that lead to backyard from 2nd floor are not properly attached to house

So far Im bringing (2) more GC to provide estimates for repair of 3 items above and then go back to negotiate with sellers in this crazy sellers market :S.

After this intro I wanna ask the community if you have any experience negotiating with issues above? 

Would you recommend any above the other?

Aproxx cost of repairs for the above in Bayonne NJ?

Thanks everyone all input is greatly appreciated.

[Matthew McCormick]

What material is that roof replacement? For 9 squares, that seems very high but I could be wrong as I haven’t a lot of experience with roof replacements. Could also be our higher cost area. Are there intricate pitches and shapes of the roof? Or is it pretty standard? Definitely go for those other quotes, the more the better. 

I wouldn’t worry too much about the back steps. You can always hire a carpenter to fix those quickly. 

As for the seller's market, originally I was going to say don't bother as they probably have other offers. This market has been crazy. However, then I thought about it more and what's the worst they could say? No? Then it's all up to you. So you have to ask yourself, are those issues deal breakers or would you be comfortable continuing forward, knowing you will have to tackle them after closing? If it's an investment and you're planning your ROI, I guess think about the bigger picture. If it's too much to tackle alone or if you don't believe it's right to take on all of those hassles without some conditions, then I'd walk away. Other properties will appear at some point.

[Eric Gomez]

@Matthew McCormick its a bitumen (asphalt rolls) roof, has some tear down and aluminum coating already per inspection report seems like seller did that to extend life of roof maybe 5 years ago. 

The stairs I think you're right a carpenter can jack up the stairs and attach properly. I do have my concerns with a twisted beam, you know its the structural bone of the house keeping it together. For this being my first property I dont incline myself to purchase a broken bone house and would push for seller to fix structural issues beside I dont know if they can sell a property with that - do you know?

Then with roof well I'll try to negotiate some decent seller credit to do that.

Thanks so much for your input, as you said if a the end its not worth other properties will show up, thanks!

[Matthew McCormick]

Originally posted by @Eric Gomez:

@Matthew McCormick its a bitumen (asphalt rolls) roof, has some tear down and aluminum coating already per inspection report seems like seller did that to extend life of roof maybe 5 years ago. 

The stairs I think you're right a carpenter can jack up the stairs and attach properly. I do have my concerns with a twisted beam, you know its the structural bone of the house keeping it together. For this being my first property I dont incline myself to purchase a broken bone house and would push for seller to fix structural issues beside I dont know if they can sell a property with that - do you know?

Then with roof well I'll try to negotiate some decent seller credit to do that.

Thanks so much for your input, as you said if a the end its not worth other properties will show up, thanks!

Aha yes, for your first property it sounds like a repair hassle unless you have the right construction contacts. I’d get a GC or architect to give you an indication about repairs. Seems common with older houses especially those 100 year old houses in the north Jersey area. I doubt a seller would repair that. If anything and if they’re looking to sell immediately, they’d give you a credit you can use towards repairing it on your own. 

However, yes it is entirely legal for them to sell it in that condition. Either if it’s an as-is sale, or especially now if you’ve completed your inspection. In a sense, if you’ve done the inspection, had it come up in a report, were aware of the issue (as showcased here) and then bought the house regardless, no fault would likely come on the seller’s if an issue should (god-forbid) happen sometime in the future. Hope that helps! 

[Alecia Loveless]

@Eric Gomez I was able to negotiate $100,000off a $300,000 property for repairs needing to be done in a hot market 3 months ago. Can’t hurt to ask.

[Andrew Freed]

@Eric Gomez - For this being your first property, those are some major repairs that have to be completed, especially foundation repairs. Brandon Turner himself shies away from properties with foundational issues. I would ask for concessions on the roof and the foundation at the very least and expect them to cover a majority of the cost. If not, be prepared to walk away. If this is your first property, you do not want to walk into a money pit, it could scare you away from real estate forever. 

At the end of the day, the due diligence process is meant to determine if there are unknown issues and whether its still the deal you thought originally. I've walked away from numerous properties during the due diligence process, its just part of the game. Think of it as a lesson learned. 

[Eric Gomez]

@Andrew Freed your input is awesome, thanks for the detailed feedback gave me a lot of perspective and confidence, visiting today with a GC to continue my due diligence part. Thanks again

[Bill B.]

$20,000 must be a local thing again or unique market conditions. That more than double what I paid in for a larger roof a couple years ago. BUT, let’s say it’s fair. How much more is the house worth with a new roof than an average roof? Take that amount away from the bid and ask for the difference. By the time you get around to asking the house should be sold if it’s priced right. If it’s not then they’ve priced it too high already so you have some negotiating power. 

[Eric Gomez]

@Bill Brandt thank you, will await for the estimates and the negotiate this and see if seller is willing to low cost and provide some concessions if not I’ll def work away at the end it’s a numbers game

[Kevin Manafi]

@Eric Gomez it really all comes down to you--your risk tolerance and your rehab tolerance. For items like an old roof, I would personally recommend asking for a credit/concession as you can get that taken care of relatively easily post-closing. As others have mentioned above, foundation issues are a lot more tricky. Depending on the severity I would probably stay away from serious foundation issues unless a) the Seller is willing to remedy it themselves or b) the concession/credit they offer is significant enough to cover surprise issues that may pop up.

[Eric Gomez]

@Kevin Manafi thanks for the input Kevin. Ended up cancelling the contract at the end numbers didn’t work

[Kevin Manafi]

@Eric Gomez Good for you. No deal is better than a bad deal