house with foundation, roof repairs needed????? - Posted by ron

Posted by ron on March 25, 2001 at 24:27:15:


First, thanks for the post I appreciate it. My foundation estimates were legimate estimates from contractors who gave us estimates the 12K was from the sellers estimate for the minimum amount of repairs.

today I had 3 roofing contractors come out and they all told me the same thing the concrete singles must go and the cost to fix the improperly installed roof is 10 to 12K

so my #'s are off alot to what is needed. I came up with the 5K selling cost b/c I was really intending to live there but wanted to look at it as an investment not as a retail purchase so that I dont overpay for it.

Consequently, will all of the new info we will be renegotiating the purchase price down to at least 142K to compensate us for the additional repairs that need to be done.

We originnaly offered 140K

The seller may balk at lowering the price and just want to continue renting the home until he can find a buyer who can get him close to teh 160K he said was his rock bottom, but if so we can live with that and keep on moving. I dont was to buy his problem and not be compensated for it.

thanks again

house with foundation, roof repairs needed??? - Posted by ron

Posted by ron on March 22, 2001 at 16:30:22:

the deal

house after repairs fmv = 250K

cost = 157 listed for 190K
(12k to 20K)= 20
roof = 2
carpet/tile = 4
kitchen/bath = 4
termite = 2
holding costs = 5
sales cost = 5

total = 199

potential sells price = 250K

these are real sales figures the nieghborhood is a golf community houses start at $100 a square foot and go up from there.

Would you do this deal?
i have financing lined up and lines of credit for the repairs. could have the house sold in 60 to 120 days in my market. I am concerned that I am not buying it cheap enough considering the repairs needed.

Re: house with foundation, roof repairs needed? - Posted by Jim Kennedy - Houston, TX

Posted by Jim Kennedy - Houston, TX on March 23, 2001 at 17:47:08:


If you’re absolutely sure that your numbers are accurate, I’d do this deal in a heartbeat. Having said that, I’d be very cautious about your figures. You didn’t go into very much detail about the individual figures. The first figure that bothers me is the estimate for foundation repairs. There’s quite a difference between $12K and $20K. Wisely, you’ve used the more conservative $20K in calculating your total, but I’d sure want to know why there’s such a large difference between the two numbers. I’ve only been full-time since 1998, but the most I’ve ever been off on my foundation repairs is $2K of the original estimate.

The next figure that I’d question is your estimate for roof repairs at only $2K. You didn’t mention the square footage of the house (or how many squares on the roof) nor did you indicate if it’s a one story or two story house. The type of roofing material also has a definite bearing on the price. In my area, $2K would not be enough to completely replace a roof on the typical $250K house. And if I had to do $2K worth of repairs to an existing roof, I’d simply spend the extra money and put on a whole new roof. Of course, your mileage may vary in your area.

$5K also seems pretty low for sales costs. That’s only 2% of the sales price. How did you come up with that amount?

But, Ron, if you verify that your estimates are correct, then you’re looking at a $51K profit on a $250K house. That’s a 20.4% profit and I’d be satisfied with that for the deal you outlined. Others may disagree, but that’s just my 2¢.

Hope this helps.

Best of Success!!

Jim Kennedy,
Houston, TX

Re: house with foundation, roof - Posted by nate

Posted by nate on March 22, 2001 at 20:27:25:

then make a lower offer.

seriously, if you are having buyers remorse BEFORE you make an offer, you are almost certainly overpaying.

listen to your gut.