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Somewhere in here, I believe you said you were planning on offering 93% of asking, even before you knew about the mold issue. So you are willing to offer 93% with or without mold.
I think you truly over-estimate the willingness of other buyers to try to "snag" the property at the percentages you're willing to pay. Or, maybe things are different in CA and people don't get freaked out by the mention of "toxic mold".
Did you say the Sellers have not reduced the price since the mold revelation? Just the 5% pre-mold reduction? Wow, brass ones.
If I were the Seller, I'd snap up your offer to take this pariah off my hands.
If I were the Seller, I'd snap up your offer to take this pariah off my hands.
If I were the seller, I'd delist temporarily, remediate the mold and pest problems, and then put the house back on the market. Either the seller is expecting someone to overlook the problem, or they think the house is so stigmatized by mold that it's not worth doing until someone buys it.
If I were in your shoes, I would offer low, at least 25% less than the current asking price.
BINGO! I would pass on it if there is any chance you wish to sell in the future though. Also consider one posters health issues precipitated by buying "This Mold House"
This could very well prove to be a case of the cheapest house being one of the most expensive houses (and mistakes you may ever make)...
How is this possible? Most people make offers on properties prior to an inspector even stepping foot through the door. Any pristine-looking home (as this one is) might be infested with black mold or dozens of major problems not immediately visible during a showing. How do I demand destructive inspections and estimates prior to even making an offer?
Simple: The home has known problems. Tell the agent you are a serious buyer, but as the home has known problems sk to have your own people look at the home prior to making an offer, so you know what the costs of the rehab would be. Done all the time, when a home is known to have problems that are revealed in the listing.
If the owner will not allow it, then you can figure the owner knows there are serious expenses involved, and run not walk away from the home. Never offer on a problem home, without taking this step. An owner will allow it, if they are not trying to hide something.
I once bought a real quality executive home that had a serious septic tank problem, and a heating system problem. Septic tank had to be pumped out every month. Heater could not keep the home warm when it snowed (Colorado front range) I got in touch with the septic service that pumped it, and when I asked him what the problem was he said it had no problem. However the owners had a big above ground pool, they kept up year around. Where did they put it? They covered up the entire leach field with the pool so the septic system could not operate properly.
Heating system problem. I personally went under the house where it was a horizontal system gas furnace located in the crawl space. Found the filter panel that had to have two screws removed to change the filter. The filter had not been changed since it was installed 15 years earlier. It was packed with what looked like a coat about 2 inches thick with mud that had dried. Took out the filter and checked and the air flow was excellent and the heater worked great.
This owner sabotaged the sale of his home, by not knowing how to change the filter and had not called anyone out to find why the heater did not work, and put his pool over the entire drain field. I got a great deal. If I could not have checked the home for causes of the problem, I like everyone for over two years would not have even made an offer on it.
Those 2 problems could have been serious and expensive problems, but proved to be cheap to fix. I had to buy a new $5 filter, and not put a pool over the drain field to fix the problems.
If you do not check to find out the cost to solve the problems in that house, if you buy it and find out the costs go through the roof it is your own fault.
To get rid of toxic mold in the walls, some or all of the sheet rock may have to be pulled out. May have caused some dry rot, so studs, etc. may need replaced. Insulation mayl need replaced. May need a vapor barrier around the outside if it does not have one so outside siding would have to be removed to put in a vapor barrier. And if that is the case, the city building inspectors are going to get involved and you don't know what they will demand to bring the home up to code.
If there is a serious rodent problem, have they chewed on the wiring and you have to partially rewire or rewire the entire? There is other damage, they can do.
Before you make any offer, get your own people to find out if it has problems. If the owner will not allow it, then as I said run not walk away from this home. I have seen too many people that bought homes (not from me) that had problems like this, who got into serious problems when they started to try to correct problems.
"The house is a well-priced bargain at asking price."
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If you do not check to find out the cost to solve the problems in that house, if you buy it and find out the costs go through the roof it is your own fault.
Oldtrader, I still don't see your point. I'm not closing until the problems are fixed. What do I care how much it costs the seller? I only need to price down the stigma of being a remediated mold home (the studies I've read suggest 3%, not 25% as some posters are saying, existing "as-is" mold houses usually lose 25-50% of their value) and inspect to make sure the remediation was successful (and not just a coat of paint over dry rot).
The seller is not going to let me go ripping out drywall to see the extent of the mold without so much as an initial offer. I don't think you're being realistic in your suggested approach, but I respect your experience.
Please point out the problems with making an offer which accounts for the "mold stigma", with contingencies that the mold/pests must be successfully remediated (and proven out by my independent inspectors) before the contract closes. If the inspectors indicate the remediation was slipshod or ineffective, I exercise my contingencies and walk on. If the remediation was successful, but I need to do long-term monitoring, I either decide to walk or ask for credits to pay for future inspections.
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Though the sellers agent says they are working on remediation, I think it's safe to assume that the sellers won't start work on the mold until they settle a contract. Otherwise, they'll be trying to show a house with sections of wall and ceilings ripped out and guys in masks and tyvex suits wandering around.
As Starla mentioned, the owner should delist and remediate. However, they are under time pressure and probably hoping that they can get their pretty-looking house under contract with a buyer willing to make an offer contingent on remediation.
"The house is a well-priced bargain at asking price."
Oldtrader, I still don't see your point. I'm not closing until the problems are fixed. What do I care how much it costs the seller? I only need to price down the stigma of being a remediated mold home (the studies I've read suggest 3%, not 25% as some posters are saying, existing "as-is" mold houses usually lose 25-50% of their value) and inspect to make sure the remediation was successful (and not just a coat of paint over dry rot).
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3% is pretty low, but being in CA, that may be closer to accurate than 25%. Mold cleanup can run $25,000 and up - and that's just to treat the symptoms, not the root cause.
That's why it's important you have a contingency to use your guy for remediation. Their guy will be focused on how to get a reading low enough that a buyer (you) feel safe. Your guy will be focused on eradication of the problem to ensure the long term health of the inhabitants.
I would try to get a price for worst case scenario for fixing problems and then figure out what you want to offer. If they don't accept your price, and you aren't comfortable paying it, then walk away.
I would never trust anyone to 'fix' such a big problem as that one. I prefer doing it myself or hiring the right person.
3% is pretty low, but being in CA, that may be closer to accurate than 25%. Mold cleanup can run $25,000 and up - and that's just to treat the symptoms, not the root cause.
The 3% number is for a house that has ever had mold. So, 10 mold-free years from now, assuming successful remediation, this place will be worth 97% of the next-door property which has never had (discovered) mold problems, due to its checkered past.
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That's why it's important you have a contingency to use your guy for remediation. Their guy will be focused on how to get a reading low enough that a buyer (you) feel safe. Your guy will be focused on eradication of the problem to ensure the long term health of the inhabitants.
I understand, and you're saying the same thing as OldTrader. The one who pays gets what they want, and the sellers want the cheap fix, while I want it done right.
I don't have a favorite mold remediation company, or connections in the area who have dealt with remediation, so I'll be going off my Realtor's (who I don't really trust) or internet reviews.
My Company does Remediation
My problem with using my own mold remediation company is that I run the risk of paying for repairs on a house I don't buy. If the mold problem is discovered, during the remediation, to be extensive and impossible to correct to my satisfaction, I have to walk away, but I've already paid for repairs. The risk here is that the infestation is extensive and I waste my own time and money finding that out. This risk is moderate, and the impact is low (in time and money).
Seller's Company does Remediation
If I let the seller do it, I can walk away scott-free if it's discovered to be a massive infestation. If they do a slipshod job, my independent remediation company's inspector will point this out (hoping to get more business from me), and I can choose to either have them do a thorough job and ask for credits, or walk away. The risk here is that the seller manages to hide a crappy repair job from me and my inspectors. That risk is low, but the impact is high (I'm suck with having bought a house with an ongoing mold problem).
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I'm not sure there's a major difference between the two options. It depends on how much I trust the seller not to be a snake. If they gamble on a shoddy repair and lose, they get ANOTHER escrow that didn't close because of the mold problem, which would be a real poison pill. Then again, are they smart/honest enough to do the right thing and fully remediate? Should I "trust but verify", or just cough up the money upfront myself, and take the risk the house is infested? Will I forgive a bigger infestation because I've already partially paid for remediation?
Well, I do want the house. I want to live in the house without worry. Therefore, I should do as Oldtrader and Clayring suggest and have my own mold company (and plumber to fix the leak causing the mold) do the work, and ask for credits. This also reduces the overall cost of the repair (paid by myself and the seller combined) because it only involves one company, rather than a buyer's mold company looking over the seller's company's shoulder. Finally, if it's my own mold company doing to remediation, I'll hold the reins in terms of guarantees and future inspections/remediation.
Thanks for the good advice. If I'm going into this, I ought to go in whole-hog with my own guys. Yes, there's several hundred dollars (maybe even thousands) of risk that I do inspections/repairs and then walk away from them because the problem is too big. Hopefully, if the companies initially find a massive problem, I can back out without paying for repairs. I guess I can have my company seal up the holes they made and hand it off back to the seller.
Anyone out there advocate for standing off and letting the seller do the repairs?
The big reason the seller has not already done the repairs, is they know it is going to be expensive to solve the problem, and they don't have the money to do the repairs.
This is the usual reason, that after a problem has been spotted, that the house is not taken off of the market till it is repaired.
It is the sign, that the repairs are going to be expensive.
The companies that do the repairs, have equipment that can tell them how widespread the mold problem is, without having to put a lot of holes in the walls. Before you make an offer, find out in advance what it will cost to repair, not look for ways to get out of the sale if you find there is more problems than you want to have in the sale.
Don't do any work on the house, until you have closed and taken possession. If you tear into the walls, etc., before closing and then attempt to walk away you will find yourself into big law suits.
After the mold was discovered, the owner according to you has turned down offers that were less than they are asking. They have determined the lowest price they will take. They may accept an offer at or near their asking price, and agree to the repairs your inspector discovers. If the cost is high, they probably won't. They have a need for so much money from the sale is my guess.
BE SMART...Either get the home inspected and learn the total problems and cost to repair before making an offer, or go find another home. Those are the only two options you should even consider.
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This Mold house...
