Rowyn (rowyn) wrote,

The Seller Lied On the Disclosure

When Amy and I arrived, a few minutes early, at the BBH, the termite exterminator and the house inspector were already there and at work. The inspector was up on the roof, but the exterminator came up and introduced himself. His name was Ken, and he was a handsome, friendly fellow, quite likeable and professional. My first question to him was, "How does it look for termites?"

"Not good. I've found termites all over on the property. We can only hope now that they haven't gotten into the house, or haven't done much damage."

"I guess my second question would be: should I buy a house that has termites?"

He looked to one side and didn't answer me.

We went inside. Ken went to the basement and started poking around at the walls and ceiling, looking for rot. He also had a nifty device that detected moisture inside the walls. Since termites are mostly water, when this device gets a readout along a "trail", it means that there're almost certainly termites in the walls.

He checked the whole house, and only found termites inside one wall, by the front porch. The front porch is enclosed concrete; Ken said there was probably waste wood from the construction encased in it, and the termites would come straight up from there. That's why the sellers never saw the trails going into the house.

But the sellers knew there were termites on the property. They'd seen them in the rotting wood in the yard, and the husband knew about them in one wall of the shed. "We didn't think they'd gotten into the house," the wife said.

I can't believe that they were admitting this stuff. There's a specific question on the seller's disclosure: "Are there, to your knowledge, termites on the property?" and it's clearly checked "No." Yet here the two of them are, wandering around and blithely admitting that they were fully aware that they had termites all over the grounds.

I had termites down on my list of deal-breakers. But, after speaking to Ken, I've decided it's not. Ken's service uses Termidor, and which comes with a lifetime warranty. He does free annual inspections, too, to make sure they don't come back. And the termites hadn't done any real damage to the house. His advice: "Make sure the sellers use Termidor, but I wouldn't worry about it, or let it stop you from buying. It'll be fine."

The termites had rotted away at the only wooden wall of the shed, and the front beam of the garage, the one over the garage door. But they hadn't done any other real damage. And, as Ken pointed out "It's an open shed already. Once the place has been treated, the termites won't do any more damage, and it's not like the wall is about to fall over."

It's the seller's responsibility to take care of the termites, which, sadly, means they get to pick what company to use. Ken made a point of this, even when talking to the sellers directly: "You can use anyone you want. Go ahead, call around." I found his forthright manner rather charming. He can't have been as young as he looked; he said he's been doing this 14 years. I told the sellers that -- if I was buying the place - they should use Termidor, and preferably, Ken. Heck, I'd pay the cost difference myself. When Amy had her house treated for termites, it cost her $575, and that was only for a 5 year warranty, and she has to pay $50 a year for inspections. Ken's estimate was only $605.

The sellers are not negotiating on repairs. Period. Their story is that they'd file for bankruptcy, but they own too many properties to make it work. They said BBH went on the market at 100k and they've dropped it to 80k because they absolutely have to sell it, even at a loss. The wife looked profoundly relieved when Amy suggested that the termite treatment could probably be paid for at closing, rather than upfront.

The house inspector was Charles; I spoke the most with him after the sellers had left. (They were only there because we needed someone to let us into the garage.)

Here's the laundry list of problems with the house:

  • Water heater: "Works, but it's leaking and needs to be replaced immediately". Cost: $300-$400

  • Furnace: "Works, but it's rusting and well past he usual 15 year lifetime. Recommend replacing soon, if not immediately." Cost: $1500-$2000

  • A/C: "Works, but it's old." Cost: Not sure. I may wait until I have trouble with this before replacing it.

  • Electrical outlets: The house has lots of three-pronged outlet plates. Only two of these are properly grounded. The cost of fixing this isn't clear to me. Charles didn't think it'd be a whole lot. I don't really have to do every room immediately, on this one, but this is definitely something that I want to address soon, and professionally. The sellers did a lot of the work fixing up this place themselves, and I've asked them to fix the socket by the electrical panel, the one for the washer-dryer. Husband said he could do that one, but not the rest. My wild guess on cost: $500-$1000

  • Basement flooding: Seller said they had one bad flood in the basement when there was a heavy rain. They've since installed a sump pump and haven't had trouble after that, according to them. However, the pump was not turning itself on when the inspector arrived, however, and it was completely full. The underside of the carpet over it was wet. He jogged it and it activated. We repeated this part with me watching; the water level had already started to rise again. However, he said the rest of it looked good -- it was draining downhill and sufficiently far from the house. Charles did not seem too worried about this part. Cost for a new sump pump is cheap: $80.

  • Roof: It's less than six months old. Charles thought it was in good shape except for one potentially very bad problem: nails all over it had not been hammered down completely. "It's like they hired a good roofer who knew what he was doing, but had brought a small hammer that day or something". This needs to be fixed before snow or frost gets on the roof, as the shingles are warping over the raised nail heads, and will break if they get cold and brittle. Cost: This is a deal-breaker -- either the sellers get this fixed with whomever put the roof in, or I won't buy.

  • Insulation: In the attic, it's blown, white, 5". Charles said "It's what you get with these older houses. You could buy rolls and lay them down, or hire someone to blow in new insulation. But it's not a 'must fix' issue." Cost: no idea.

  • Spiders: Charles: "I don't know if this worries you or not, but I've seen three spiders in this place already. Wors, the seller told me that while they were working on this place, one of their helpers got bitten by a spider and had to be taken to the hospital, with red lines standing out on his arm. I'd suggest bombing the place before you move in." Cost: not sure, probably not a whole lot.

  • Warping: The floor is uneven on the first floor because of the joists shrinking, Charles thought. Ken had found some moisture in one of the walls that wasn't termites (it didn't go all the way to the floor), and Charles guessed that this was from leakage before the roof was replaced. Charles wasn't concerned that there were any deeper problems at work here. "It's an older house. The wood dries out and shrinks unevenly. If this was a 10-year old house, we'd be walking out now, and it wouldn't be a slow walk. But this is a 60 year-old house. It's not likely to change any from here." Cost: Doesn't seem like I need to address this.

Notwithstanding the long list of woes, it's not all bad. Charles pointed out that the place is structurally sound, and better built than most modern houses, with higher quality materials and better techniques. The septic tank is scarily easy to get to. There are two concrete blocks covering up holes that lead into it. You can pick them up -- we did -- and see the water of the tank. No odor from it. And hopefully the easy access means I don't need to pay someone to excavate the top when I get it inspected. Which -- cross your fingers -- I can arrange for on Saturday. Maybe. I hope. Or maybe the sellers will reject my terms and I won't need to get the septic tank inspected at all.

Amy is going to ask the sellers to get the roof fixed (if they got any kind of warranty on it, it should still be covered, so this ought to be free), to do what they can about the outlets, and to replace the termite-rotted board from the garage. (They've done a lot of this sort of work, so it shouldn't be much expense for them). Oh, and the garage has a garage door opener. Cool. Bonus.

Up until I double-checked the disclosure sheet and verified, yes, the sellers had flat-out lied about the termites, I was feelling sorry for the. BBH is a nice house, despite the various problems. Even if I use my worst-case estimates for everything, I'm still looking at under 5k for it all. (OK, maybe a bit more than 5k if I replace the A/C and re-do the insulation right off). But still ... this was our favorite house. Lut and I liked it better than houses that cost $95k. Our next favorites were an $84,900 house with a 20 year-old roof, and one for $86,900 with an only partly finished basement.

I don't have a whole lot of reason to be confident that either a) nothing will be wrong with those places or b) that the seller will be a whole lot more eager to fix them before closing than the seller on BBH is.

And I'm just not sure I'm ready to go through all of this again on another house.

If the sellers come back to say they can't get the nails on the roof fixed, deal's off. Otherwise, I'll arrange for the septic tank inspection, and then turn it over to my poor beleaguered lender to try to get the appraisal and title work done in time for a November 25 closing. Hmm. I better push my real estate agent to get them to give me an answer ASAP -- I know it's, if anything, even more important to them that we close on the 25th than it is to me. But it'll be hard enough to do that if I get the ball rolling tomorrow, and I don't want to commit to paying for anything else until I know the sellers will at least do that much. Pity the sellers burned up all their credibility by lying on the disclosure; otherwise, I might be willing to trust them when they say that the septic tank's OK.

Well, we'll see.
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