Should we buy this house?

Question

My fiance and I have been looking at houses for the past four months. We finally found one in a good neighborhood that we can afford. The problem is it was built in the 1050's, and the furnace, hot water heater, and electric are all original. The fuse box is original. It has the screw fuses. Everything else looks good. The piping under the sinks have been redone. I am just afraid that we will get in there and the original things will start breaking. It's a 3 bedroom, 2 bathroom home. It appraises for 65,000. We offered her 47,500 and she accepted. Is this a good deal considering all of the original things in the house? How long do you think we could live in this house before we have to rewire it, buy a new furnace and hot water heater, etc.? (We are first time home-owners. We are waiting to marry after we purchase a home due to his bad credit.)

Well, we aren't sure if the hot water heater is original, but it is old. I'm just a little worried about the wiring and fuse box... I don't want to live in a fire hazard since the coding is out of code. We haven't had it inspected yet. My fiance's father owns a house very similar to this one, one street over. He looked it over, and this is what he pointed out to us as problems.

Haha and yes I meant 1950's. My finger slipped. lol

Answer 1

Buy the house! If you are walking into $17,500 of instant equity with knowledge of the immediate issues (water heater, furnace and electric panel which will likely only cost you $4500-5000), you completely ahead of the game. Perhaps you can include these repair costs into the body of your loan as well ... talk to your mortgage broker about that.
How long can you go until you make the repairs? Well you can wait until the middle of winter for the furnace to break, but then the replacement costs will be a lot more. Etc, etc. As a home owner you should be proactive to keeping your home up to date rather than reactive by waiting for something to break (or catch fire). These are issues where Murphy's Law will apply.

Answer 2

I assume you meant 1950's? The wiring and fuse box should be OK for many years. I can't believe it has the original water heater. Is this true? If so, that area must have incredibly soft water. Does it have galvanized water pipes? Is the water pressure good? Usually galvanized pipes clog up with hard water deposits, but if it still has the original water heater . . . The blower motor on the furnace will probably have to be replaced soon. It sounds like a great deal. If it appraised for 65, maybe you can borrow a little extra and do some repairs now. Has the house been inspected yet? Most lenders require this. Did you make the offer contingent on inspection? If not, you should do that. Good luck!

Answer 3

If you offered and she accepted it sounds like you have a case of "buyer's remorse" and you will have to make the best of your deal unless there are contingency clauses that will let you back out or you are willing to pay the liquidated damages (normally the earnest money deposit).

My house was built in 1953. When I added a bedroom and a couple bathrooms, remodeled the kitchen and installed central air I had to upgrade the service panel to add the additional circuits. The wiring in the original part of the house did not need to be replaced. I had a floor furnace that was in fine condition. My parent's house was built in the 1930s and we didn't need to replace the furnace until '98 and that was because the parts were no longer available.

Since summer is here I'd have the furnace serviced at off-season prices; an honest technician should be able to give you a fair estimate of your system's remaining life. Also call a few electricians for an estimate for upgrading the service panel and running an extra circuit or 2 to the kitchen and have them look at your inside wiring at the same time. The cost of a water heater is fairly trivial; should be under 1000 even if they need to run a new overflow line and add earthquake strapping etc. The longer warranty water heaters have better insulation and cost less to operate.

Answer 4

Sure it was built in the 1050`s not the 1950s? Anyway, it sounds to me that you will want a rewire for a start. The fusebox has not been upgraded so i would imagine that the wiring also hasnt been. For a budget cost you could use £3500 to replace the wiring and box. As far as the other equipment goes, the only advice i would give is make sure you have money set aside to get these replaced. The last thing you want is these going and not being able to afford it. Hope this helps.

Proprietor of Electrical contracting business

Answer 5

Your biggest problem here is the electrical situation. You may not be able to close this deal unless the wiring is updated prior to close. Most home insurance underwriters do not issue insurance on such properties these days when the wiring is this outdated. Absent insurance, you won't be able to close the mortgage. Hopefully, you made your offer to purchase contingent upon a satisfactory home inspection, and contingent upon the ability to insure the property "as is".

The other components are difficult to gauge. Generally speaking however, both the furnace and the hot water heater are well PAST their life expectancies. Nonetheless the price compared to what you are describing sounds very attractive.

If you decide to purchase this house 'as is', do be prepared to invest money into it fairly soon. I think those components you describe are living 'on borrowed time'.

Answer 6

In your sales contract, make it contingent upon a "home inspection". This is a certified outside third party that will go in and inspect the home for potential problems. He will also state in there the average life expectancy for the furnace, hot water heater, and electric. He will also examine the house structurally to make sure it is sound. It typically costs about 350 dollars but is well worth it... You don't want to move int a money pit (like the movie with Tom Hanks!)

Answer 7

There are programs for first time buyers. Check around to find out how to take advantage of the programs for first time buyers. We cannot tell you if it is a good deal or not because there are more things to consider than the house alone. That is a cheap price. The heat and the wiring should be taken care of before you move in. Stay with relatives or friends until you can just get those taken care of.

Answer 8

THE PRICE SOUNDS RIGHT,BUT I WOULD GET A HOME INSPECTOR TO GIVE YOU A PROJECTED COST FOR REPLACEMENT OF THE WATER HEATER,WIRING AND THE FURNACE.ONCE YOU MOVE IN YOU SHOULD REPLACE THE WATER HEATER THEN THE WIRING AND THEN THE FURNACE.IF YOU CAN REPLACE ALL OF THE ABOVE YOU CAN ADD ABOUT 40,000 DOLLARS TO THE SELLING PRICE OF THE HOUSE.THIS IS FORCED APPRECIATION. THE SECOND THING TO KEEP IN MIND IS USE SOME OFF THE EQUITY TO CLEAN UP YOUR HUSBAND TO BE CREDIT.FINALLY WITH ALL OF THIS DONE YOU SHOULD HAVE A NICE HOME FOR THE NEXT 5-10 YEARS.

Answer 9

If I was totally in love with the house and could afford it I would totally be taking it, if of course I could afford to fix things that may need to be, but that comes with owning any home. Besides loving the house, my reason for wanting an older home is that houses now are not built near as nice as they used to. It used to take years and alot of time and quality was put into the house, while now they are just built in a matter of months, not always nice quality.

Answer 10

The initial price sounds great. However, will you be able to afford to replace the outdated hardware? If so, I say go for it. Replace things as you go. It has held up this long. If you can't afford to replace anything, stay away.