Buying the home I'm renting-Section 1 clearance and repair questions

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Submitted by Wicked Heart on April 8, 2013 - 11:54am

We are buying the house that we have been renting for the last 7 years. The bathrooms have extensive dry rot and termite damage under the master bath shower that extends under the toilet and about 4 ft out from the tub. The only thing holding the shower in place are the beams and outer foundation walls. The tub/shower in main bathroom is in the same condition. The seller has to repair it as the termite guy called it as section 1. The termite guy gave a quote for tenting & repair of the rafter tails, door jams, etc but stated she had to get a bid for the bathrooms. She never did it and called me on Friday to get a bid at the last minute. I got a bid of $21,000 for the both bathrooms. She told me that was ridiculous and she could get it repaired by a licensed contractor at $1200 each bathroom. I have a lot of questions. Does the work have to be permitted? What happens if there is mold or more dry rot termite damage behind the shower walls? I'm pretty sure there is. Also there may be damage on one of the beams.

Submitted by SD Realtor on April 8, 2013 - 1:02pm.

Your realtor should be able to help you out with your questions.

If both parties signed a WPA then it should be stated what the responsibilities are for buyer/seller under section 1.

As a side note all termite companies will contract out alot of the carpentry work associated with section 1 issues. Most of the time, they gaffe the seller heavily on these charges. It is not in anyway illegal or problematic for the seller to hire an independent 3rd party (their own contractor) to do the work themselves. After the work is done the termite company comes out to reinspect and will either issue a clearance or identify what needs to still be done.

Once more, your agent should be able to explain all of this to you so you can protect yourself. You may be getting a good deal on the home, but it is not so good if you have to do some extensive remediation after the sale that you didn't know about.

As for the cost of the bathrooms, it sounds like the damage is indeed expensive. Without looking at it, I cannot comment on whether her quote is sufficient or not. You need to think about it though. Her obligation under the WPA is to remedy section 1 items. So as long as the dryrot is removed and damaged members are repaired, she can argue that section 1 items are remedied. However that alone may not mean that the job was done correctly and there could be big problems down the road because of this.

The amount of damage found by the termite inspector would be an indicator that yes, there is further damage in areas that cannot be inspected. However you will need to negotiate with the seller about inspecting this area. You, not the seller are responsible for due diligence including calling a mold guy out to take spore samples. Now if some of that inspection process can cause damage to the home, you better get that ironed out ahead of time.

Submitted by FormerSanDiegan on April 8, 2013 - 2:07pm.

This reminds me ...
When we sold our house in 2005, we received a quote from termite company that included a line item of $1200 to repair damage on our deck. This was in addition to treatment (tenting ) and couple of minor repairs on the house fascia boards.

They ended up replacing a single board on the deck.

I was pissed, but they had me over a barrel since I needed to close and was not going to fret over $1200 when the house was over $800K... It was Spring 2005 and I didn't want to delay and lose the buyer... But I'm still pissed.

Submitted by FormerSanDiegan on April 8, 2013 - 2:12pm.

Termite section 1 clearance is a racket.

Anyway, you have some leverage as the buyer, but here are my thoughts.

1. Negotiate whatever amount you can get from the seller.

2. The actual eventual cost of the bathroom repairs is not as important as what another buyer would pay for the same house in the same condition.

If the house were on the open market, would somebody pay more than you are paying for the house ?

Is it in a high-demand area ?

If you are getting a sweet deal, then use this damage as leverage, but don't lose out on a sweet deal over $10k. You may not get what it takes to repair the bathroom, but if your overall price you paid minus whatever seller concessions you can get is worth making the deal.... then make the deal.

Submitted by CA renter on April 10, 2013 - 2:32am.

Good advice from SDR and FSD.

Just based on our experience with remodeling bathrooms, it sounds like $1,200/each is incredibly cheap. Does this include possibly replacing wood behind/under the tub/shower walls and floors? The tub? The backerboard? What about tile work? New plumbing? What steps will be taken to prevent the same problems from occurring in the future? Will the seller be as diligent as you regarding the quality of the work and materials used?

That being said, what FSD said about losing the house if it's a good deal is true, too. It would be great if you could just stay in your current house because you'd save money on moving costs and all the "stuff" people tend to spend on when moving to a new place.

Congratulations on your new house (I hope)! :)

Submitted by SD Realtor on April 10, 2013 - 7:17am.

In todays market I would take whatever I can get and get the work done myself. You don't want to try to deal with the open market right now.

Submitted by SK in CV on April 10, 2013 - 8:29am.

To answer a couple of your questions that I don't think have been addressed....yes, the work legally MUST be permitted and done by a licensed contractor. In CA, legally, there is no such thing as an unlicensed contractor. If they call themselves a "contractor", by law, they must be licensed. I once won a double small claims suit against a seller and broker for unpermitted work done by unlicensed handyman, when the purchase contract called for it to be done by "a contractor". It was also related to the termite inspection. Coincidentally, the bid provided with the inspection report was right around $20K. Seller had the work done for $1,200. And never paid the schmuck who did the work.

Submitted by Lahen on September 3, 2013 - 10:06pm.

SD Realtor wrote:
Your realtor should be able to help you out with your questions.

If both parties signed a WPA then it should be stated what the responsibilities are for buyer/seller under section 1.

As a side note all termite companies will contract out alot of the carpentry work associated with section 1 issues. Most of the time, they gaffe the seller heavily on these charges. It is not in anyway illegal or problematic for the seller to hire an independent 3rd party (their own contractor) to do the work themselves. After the work is done the termite company comes out to reinspect and will either issue a clearance or identify what needs to still be done.

Once more, your agent should be able to explain all of this to you so you can protect yourself. You may be getting a good deal on the home, but it is not so good if you have to do some extensive remediation after the sale that you didn't know about.

As for the cost of the bathrooms, it sounds like the damage is indeed expensive. Without looking at it, I cannot comment on whether her quote is sufficient or not. You need to think about it though. Her obligation under the WPA is to remedy section 1 items. So as long as the dryrot is removed and damaged members are repaired, she can argue that section 1 items are remedied. However that alone may not mean that the job was done correctly and there could be big problems down the road because of this.

The amount of damage found by the termite inspector would be an indicator that yes, there is further damage in areas that cannot be inspected. However you will need to negotiate with the seller about inspecting this area. You, not the seller are responsible for due diligence including calling a mold guy out to take spore samples. Now if some of that inspection process can cause damage to the home, you better get that ironed out ahead of time.

I agree with this. Concentrate on it.

Submitted by CDMA ENG on September 3, 2013 - 10:16pm.

Very interesting post. We need more like these!

CE

Submitted by sdsurfer on September 4, 2013 - 3:27pm.

I agree that a good deal is a good deal, but you also want to have clear expectations.

I would get another quote on the work just so you have a better idea of what it's going to cost to repair. My gut say's the 3rd quote is going to come in between the 1200 and the 21000. 1200 seems low and 21k seems crazy. I guess some people pay that, but I never would and would not expect anyone else to either. If you can get a quote for around 10k maybe you can just get the seller to discount the price by that or meet you in the middle somewhere.

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