Copper pipes stolen..how will this impact sale? (insurance, prices, construction)

[OnOurWayHome]

We are the sellers and have a signed contract on the house and were hoping to close next month. The house was completely cleared out other than the appliances. We were told by the realtor that those needed to be left behind. The house will require a complete interior renovation, however.

We recently discovered that the house was broken into and the copper pipes stolen. We don't anticipate this being a huge problem for the buyer as all the plumbing was to be torn out anyway, but does anyone know whether the buyer's bank could take issue as they will expect appliances/systems to be in working order?

I know we're going to have to discuss this with our lawyer, but that's a whole other saga..I hate the guy. Just curious if anyone else has dealt with this.

I'd be fine giving some type of concession to the buyer, but if the bank will have a problem I'd assume we'll have to have repairs made. Which drives me insane knowing that as soon as we close the buyer will rip it all out anyway.

[TarkaK9]

Refer to your contract with the buyer. What a buyer intends to do to a property once it closes is their business and doesn't negate your obligations of a contract. Generally, rule of thumb is that the property is to be in the same condition as it was on the day of the contract was written and submitted. Look for somesort of section regarding causes of loss, insurance, damage to inclusions.

You will need to resolve the matter with your buyer. It depends on the sort of financing the buyer is pursuing as lenders have their own guidelines and criteria in the form of loan conditions; especially for primary residences. Was all the copper ripped out? It all depends on the severity of the damage but yes, the buyer's lender could be discretionary with a delay or cancel the loan on the grounds that technically they may see it as the house no longer has running water therefore viewed as inhabitable. If the buyer was doing an fha loan, yeah, chances are the property won't go fha due to the damage.

I'm very sorry to hear what happened. With metal prices how they are, this has been a problem for a number of years ... especially at risk are abandoned or bankowned properties. In all likelihood, Police report and Insurance claim to get the work repaired but you will have to coordinate with the buyer to see how they want to handle the loss too.

[cully]

So what do the copper pipes do? Supply your utilities? I don't think a lender will give a loan on a house without proper utilities, bathroom use, etc.

However, if there is no loan or a short contractor's loan as they work construction, that's another thing. But otherwise the house has to be in certain condition for a lender to see it is worthy of loaning on. There are some that won't even allow paint chips and alligator paint.

[young92]

Talk to the buyer (their agent) and explain what happened. Chances are, you will have to replace the pipes. A house needs running water. BUT, there is always the chance, albeit slim, that it won't be an issue. Just talk to them. So much is solved by just talking

[Lovehound]

It sounds to me like you need to turn in an insurance claim and have all the plumbing replaced. Once that's done I can't see it affecting the sale. Who wouldn't rather have new pipe instead of old pipe?

Note that your walls will need repair too, after the new plumbing is in and the holes filled, and repainted.

Too bad we can't execute these thieves.

[Nell Plotts]

Put in PEX pipe, not attractive to thieves.

[johngolf]

I had a similar situation. My buyer was going to do a remodel before they even moved in. Part of that was the HVAC system. Well a month before the closing, the AC Compressor gave out. The little devil in the back of my head said just forget it. Do not say anything. They are going to replace it.

Well proud to say, I do not do business like that. I called and informed the buyer. He said let me call my HVAC guy. He called me back and said no issue, my HVAC guys says the unit goes away in the remodel. He also thank you for doing this. Some would have walked away.

[Huckleberry3911948]

comment you dont have to be selling an abandoned property to lose your pipes to thieves. I know a church that had theirs stolen.
the greatest danger in the process of selling the house is during the transfer. you must guard the property. often vengeful renters and their friends will trash it a few days b4 you get the keys. people that short sell got nasty friends too and are plenty mad about losing their house.

[OnOurWayHome]

Thanks for all the advice. I obtained a copy of the contract and will review, and speak to our lawyer once we get our ducks in a row. We're dealing with this and a fence issue(neighbor built fence on our property, seems like it was a long time ago so adverse possession may apply, neighbor ducking our calls) so it's been one fun thing after another.

Lovehound, the insurance thing is yet another complication. We switched insurers recently to obtain a vacant property policy, and can't prove who was the insurer when the burglary occurred. We're also somewhat concerned about being dropped if we make a claim...

[Lovehound]

Oh no re: the changed insurers problem. That is one hell of a problem. But you can't just eat it. You are going to have to decide who to make the claim to. Maybe somebody else has some advice. Could you file a claim or lawsuit against both companies and let the court decide? You are surely covered, the only question is which insurer is to pay.

And yes I too am familiar with the problem that if you let a neighbor build a fence on your property you risk a common law readjustment of the property boundary as the new fence. At least that's the way it is in L.A. County. My neighbor built a fence several inches on his side of the property line when our common fence blew down, so in theory I gained several inches in the size of my yard, but I never bothered to test it. I sold the house. Let the new owners deal with it if they want.