*Realtors/Lenders/Appaiser, Trustworthy? Please help...*

[Allthingslegal]

What is the name of your state? PA

I am in negotiations to purchase an older home and during my inspection it was learned that the house still has active & spliced and ungrounded Knob & Tube wiring...My insurance company said they will only give me coverage for 60 days and it must be removed...The sellers claim (on their disclosure) they didn't know it was there. So, evidently their insurer never knew either...

I offered the listing price and they accepted and I was asking that the seller either update it themselves, or give up to $5K to a electrician of my choice upon signing to update the electric...they refused...

During these negotiations The lender had their appraisal done and said nothing about the Knob & tube wiring, and both realtors seem to downplay the whole issue of the K&T wiring as if its no big deal...

My questions are:
1. Would it be normal for a person to expect to sell a house with this infamous Knob & tube without updating it first or giving a credit to buyer to have it done?

2. Would a Realtor list a house with this type of wiring and allow their client to mark "No" on the disclosure report?

3. Would it be ethical for a buyers agent to encourage their client to think its O.K. not to have this wiring updated?

4. Would a Lender Appraiser really inspect a home with this type of wiring and not demand that it be fixed as a condition of securing the loan, especially considering it is a FHA loan?


I would appreciate any advice on this...Even if I do not buy the house, I want to know if I should even continue dealing with my Realtor & Lender since I'm starting to question their integrity...

Thank you,

 

[FlyingRon]

1. Of course, unless the seller forced the issue pursuant to what the contract required, why would they spend large amounts of money doing NEEDLESS upgrades to a house they are no longer going to own?

2. Listing means squat. The disclosure statement only covers what the sellers know to be a problem. K&T that has no been hacked upon is not itself a defect no matter what your insurance company thinks. Old houses can almost certainly be expected to have ungrounded electrical systems and possibly ancient wiring methods.

3. Nothing unethical here. Unethical would be to say there is no k&t present or that they brought the house up to code when they KNEW that that hadn't been done. But wiring commensurate with the age of the house is not a defect that requires disclosure.

4. The lender doesn't care squat about how hard it is for you to get insurance. Their appraisal is purely to value the property to assess it's risk as security for the money they are lending you.

Why do you think the lender is responsible for any of this. What do you mean "your realtor?" Did you have specific representation or are you talking about the seller's agent?
Why do you think that the agent is responsible for your failure to do due diligence on the sale when they're responsibility is to the seller?

 

[Allthingslegal]

Thanks for the reply...heres some NEW INFO....

I got the sellers to admit that they did know there was K&T in the house by contacting their insurance company who said they notified him of the K&T when they set up their insurance plan years ago...however, in their disclosure report they checked "NO" under the section that asks if they knew of any K&T in the house...obviously this is a blatant lie on their part...

Does this make them responsible for updating or at least give me a legal reason to demand they pay for the upgrade?

Thanks again...

 

[seniorjudge]

Q: Does this make them responsible for updating or at least give me a legal reason to demand they pay for the upgrade?


A: No, but it doesn't hurt you to demand anyway. If it ever got to court, the judge will want to know why you didn't notice such a thing.

 

[las365]

I got the sellers to admit that they did know there was K&T in the house by contacting their insurance company who said they notified him of the K&T when they set up their insurance plan years ago...however, in their disclosure report they checked "NO" under the section that asks if they knew of any K&T in the house...obviously this is a blatant lie on their part.

I am not an attorney, but I believe that if the seller lied on the disclosure about a material fact, you may have a cause of action for fraud, or negligent misrepresentation, or other civil claims. In my opinion, you should seek counsel from an attorney in your area for infrmation about the claims you may have and your options, and perhaps to negotiate the resolution of this issue.

 

[Allthingslegal]

Thanks I will contact a lawyer asap to discuss those options...

Its funny because in our original sales agreement they requested "no mediation"...now I can see why, they must have been hoping that the buyer wasn't as thorough as me...but they didn't get that lucky I guess...so off I go to be an even bigger pain in their butts than they probably think I have been already...

So let me see if i understand at this point...

I am going to demand the upgrades be paid for out of the money they get from the sale, or threaten to take civil legal action if they refuse...hoping this will be enough for them to finally submit to the electrical repairs that I had asked for in the first place...

Thanks guys... I love this board...

 

[seniorjudge]

And just remember that you are bargaining from a position of weakness.

You knew it was an older home and such wiring is quite obvious.

 

[Allthingslegal]

^^Right, and that is why we decided to look for it, even though they said there was none. We had to find it ourselves, which took valuable time, and money.

They claimed there was none present even though they knew there was some...so them lying about it may have been an attempt to stop us from even looking for it...wouldn't that constitute fraud & negligence on their part and put them in the situation to right their wrong, or be sued? (although I'm not sure what I could get out of it until i speak with an attorney)...faced with those prospects, wouldn't most choose the option to make things right?

Not to mention, there are at least 2 other questionable items on their disclosure as well...involving floor covering, sidewalk damage, and settling issues...all were marked as the opposite of what ended up being true about this property after our inspections...or not even marked at all (in the case of the flooring)...and for them to claim they weren't privy to these material defects is just silly considering anyone can see stains in carpet, cracks & tripping hazards in sidewalks, and unsquare doorframes....

And just remember that you are bargaining from a position of weakness.

You knew it was an older home and such wiring is quite obvious.

Yes, I was very thorough with my inspections BECAUSE I knew it was an old house, and had a feeling they weren't being truthful. Now it seems I have caught them in some lies. The whole time it seemed like they were trying to rush us through our inspection process on top of it...I guess now I know why...

so, how exactly am I in a position of weakness?

**seriously, I'm asking. I know how text can imply the wrong intent/attitude on these boards, but I honestly do value your knowledge and would like to know what you mean by that...

keep in mind, I haven't bought the house yet, and they really want/need to move out as it is a family of 4 in a 832 sq. ft. home...

In their disclosure they agreed to fix the roof and drywall repairs due to some past water damage, so, I'm already holding them to that...I just think they should also, play some hand in updating the electric considering all of the above...

Thanks,

 

[HomeGuru]

^^Right, and that is why we decided to look for it, even though they said there was none. We had to find it ourselves, which took valuable time, and money.

They claimed there was none present even though they knew there was some...so them lying about it may have been an attempt to stop us from even looking for it...wouldn't that constitute fraud & negligence on their part and put them in the situation to right their wrong, or be sued? (although I'm not sure what I could get out of it until i speak with an attorney)...faced with those prospects, wouldn't most choose the option to make things right?

Not to mention, there are at least 2 other questionable items on their disclosure as well...involving floor covering, sidewalk damage, and settling issues...all were marked as the opposite of what ended up being true about this property after our inspections...or not even marked at all (in the case of the flooring)...and for them to claim they weren't privy to these material defects is just silly considering anyone can see stains in carpet, cracks & tripping hazards in sidewalks, and unsquare doorframes....



Yes, I was very thorough with my inspections BECAUSE I knew it was an old house, and had a feeling they weren't being truthful. Now it seems I have caught them in some lies. The whole time it seemed like they were trying to rush us through our inspection process on top of it...I guess now I know why...

so, how exactly am I in a position of weakness?

**seriously, I'm asking. I know how text can imply the wrong intent/attitude on these boards, but I honestly do value your knowledge and would like to know what you mean by that...

keep in mind, I haven't bought the house yet, and they really want/need to move out as it is a family of 4 in a 832 sq. ft. home...

In their disclosure they agreed to fix the roof and drywall repairs due to some past water damage, so, I'm already holding them to that...I just think they should also, play some hand in updating the electric considering all of the above...

Thanks,

**A: what did your home inspection report as to the electrical wiring?

 

[Allthingslegal]

what did your home inspection report as to the electrical wiring?

The inspector flagged the K&T as dangerous because it is ungrounded and spliced, and that I should have an electrician evaluate...which I did...he then gave me a quote for upgrades...I asked the sellers to upgrade and they refused...

after all that happened is when I got confirmation from their insurance agent that they obviously knew about the K&T and yet marked that the house had none on their disclosure...

They also failed to mark the flooring damage boxes at all, even though there are obvious defects in the carpet throughout the house...

another instance is concrete, where they marked they had no knowledge of any damage, which any layperson could see there is some...

so that makes 3 "lies" from them on their disclosure that I am able to call them on...

I talked to a lawyer & he basically said all I can do is demand again that they offer me credit to upgrade it, or I may terminate, with the threat of legal action after the fact...

So, if they still say no, and I don't want to fix it myself and I decide to terminate, I can back out and then sue for time/money lost during this whole process...

I figure its worth a shot, because I got nothing but money & time, and I know for a fact they have little of either...and are pretty desperate to move from what I understand...

 

[FlyingRon]

K&T is antiquated but generally recognized as safe in certain conditions. However, as you have found, some insurers won't go near it. Ungrounded wiring exists in other places than K&T, even in "less ancient" houses. Of course K&T is spliced. That's how connections are made. The issue is whether there has been things like (thermal) insulation applied, if the K&T has been extended improperly, if it has been damaged....

The average home inspector is always going to err on the "Possibly a problem, get it checked out by someone with a clue."

 

[Allthingslegal]

get it checked out by someone with a clue.

I did and everyone agrees what is going on with the visible K&T is currently unsafe...