Buying first home with old hvac

Questions on how we spend our money and our time - consumer goods and services, home and vehicle, leisure and recreational activities
Topic Author
abs9986
Posts: 84
Joined: Sun May 20, 2012 7:25 pm

Buying first home with old hvac

Post by abs9986 » Mon May 01, 2017 8:09 pm

We are in process of buying our first condo and after the inspection found out that all hvac equipment is original and 20 years old. Everything is working fine but I'm worried that this will be a big expense at some point soon. We already agreed on the purchase price.

Any recommendations on what we can do? Can we ask for credit or replacement or a warranty. This must happen a lot so I'm curious what others do.

awval999
Posts: 1135
Joined: Fri Apr 08, 2011 10:17 pm

Re: Buying first home with old hvac

Post by awval999 » Mon May 01, 2017 8:12 pm

I mean there's really not much else to do.

It works. Prepare for a replacement. No one is going to give you a credit for a working HVAC.

User avatar
ResearchMed
Posts: 9457
Joined: Fri Dec 26, 2008 11:25 pm

Re: Buying first home with old hvac

Post by ResearchMed » Mon May 01, 2017 8:12 pm

abs9986 wrote:We are in process of buying our first condo and after the inspection found out that all hvac equipment is original and 20 years old. Everything is working fine but I'm worried that this will be a big expense at some point soon. We already agreed on the purchase price.

Any recommendations on what we can do? Can we ask for credit or replacement or a warranty. This must happen a lot so I'm curious what others do.
Did you have a "subject to inspection" contingency?

Is your question more about whether you could/should get some sort of credit, or whether you should go through with the purchase "'as is"?

RM
This signature is a placebo. You are in the control group.

livesoft
Posts: 69587
Joined: Thu Mar 01, 2007 8:00 pm

Re: Buying first home with old hvac

Post by livesoft » Mon May 01, 2017 8:13 pm

I would not worry about it. But I am in a home with HVAC that is working great and is 24 years old.

I suppose you could ask for a $1,000 or so price concession ... just in case. What contingencies did you have on your offer with respect to the inspection?
Wiki This signature message sponsored by sscritic: Learn to fish.

awval999
Posts: 1135
Joined: Fri Apr 08, 2011 10:17 pm

Re: Buying first home with old hvac

Post by awval999 » Mon May 01, 2017 8:14 pm

ResearchMed wrote:
abs9986 wrote:We are in process of buying our first condo and after the inspection found out that all hvac equipment is original and 20 years old. Everything is working fine but I'm worried that this will be a big expense at some point soon. We already agreed on the purchase price.

Any recommendations on what we can do? Can we ask for credit or replacement or a warranty. This must happen a lot so I'm curious what others do.
Did you have a "subject to inspection" contingency?

Is your question more about whether you could/should get some sort of credit, or whether you should go through with the purchase "'as is"?

RM
What would the inspection state? Working HVAC at its life expectancy. That isn't a material defect.

User avatar
ResearchMed
Posts: 9457
Joined: Fri Dec 26, 2008 11:25 pm

Re: Buying first home with old hvac

Post by ResearchMed » Mon May 01, 2017 8:23 pm

awval999 wrote:
ResearchMed wrote:
abs9986 wrote:We are in process of buying our first condo and after the inspection found out that all hvac equipment is original and 20 years old. Everything is working fine but I'm worried that this will be a big expense at some point soon. We already agreed on the purchase price.

Any recommendations on what we can do? Can we ask for credit or replacement or a warranty. This must happen a lot so I'm curious what others do.
Did you have a "subject to inspection" contingency?

Is your question more about whether you could/should get some sort of credit, or whether you should go through with the purchase "'as is"?

RM
What would the inspection state? Working HVAC at its life expectancy. That isn't a material defect.
:confused
I certainly didn't state that I considered an older HVAC to be a "material defect".

IF there is an inspection contingency and OP wants "out", then it should be possible to get out without penalty, absent other issues.
Or, IF there is an inspection contingency, OP could also *try* to get some consideration given the age of the HVAC.

That's why I asked what the OP's main concern was.

RM
This signature is a placebo. You are in the control group.

Topic Author
abs9986
Posts: 84
Joined: Sun May 20, 2012 7:25 pm

Re: Buying first home with old hvac

Post by abs9986 » Mon May 01, 2017 8:25 pm

There is an inspection contingency although I thought that was only if something was not working – technically the units are working it's just that they are 20 years old.

What do you other buyers do in similar situations?

User avatar
hand
Posts: 1368
Joined: Sun May 17, 2009 8:42 pm

Re: Buying first home with old hvac

Post by hand » Mon May 01, 2017 8:37 pm

There are at least two separate issues here:

1) Is the agreed price still fair - what was assumed in the offer & what was assumed in the offer the seller accepted
2) Can the OP afford the major (~$5k) expense for a new A/C in the months after you buy the house.

Issue #1 (fairness of agreed price) is essentially moot given the realpolitik of today's real estate deals - buyers & sellers commonly renegotiate based on the smallest inspection items. Ultimately your ability to have the sellers pay for a new A/C comes down to your willingness to threaten to walk and potentially loose the purchase, and the seller's willingness to negotiate or lose the sale. For issues that are legitimate from both points of view, splitting the cost impact is often seen as fair.

Issue #2 (ability to pay for major repairs after closing) is probably the one the OP is worried about. The potential failure of the A/C in the immediate future is presumably new information to them and paying cash to address may not be feasible. One way to address if buyers aren't willing to concede on price is to finance the purchase of a new A/C by asking the sellers to replace before sale and increasing purchase price by that much. (Your realtors will love this solution as it likely increases their commissions).

User avatar
unclescrooge
Posts: 4190
Joined: Thu Jun 07, 2012 7:00 pm

Re: Buying first home with old hvac

Post by unclescrooge » Mon May 01, 2017 8:39 pm

Ask seller to pay for a home warranty covering all appliances.

Then keep it until the a/c dies. It might run another 10 years!

User avatar
ResearchMed
Posts: 9457
Joined: Fri Dec 26, 2008 11:25 pm

Re: Buying first home with old hvac

Post by ResearchMed » Mon May 01, 2017 8:40 pm

abs9986 wrote:There is an inspection contingency although I thought that was only if something was not working – technically the units are working it's just that they are 20 years old.

What do you other buyers do in similar situations?
We've either let it go, or tried to get some consideration (a reduction in price, or throwing in something else, like the antique grand piano, but we didn't get that; we got a small adjustment).

There were a few things that couldn't be determined at time of inspection, so sellers and we agreed to have a small amount escrowed. Once we had the issue taken care of, we got that money, and the rest was returned to sellers.
(This requires some "good faith", or it could get difficult.)

In part, requesting an adjustment should mean that you couldn't have determined how old the system was until the inspection revealed the approx age.
(We were certainly in no position to know "how old" such systems are, prior to an inspection.)

But with an older home, do be prepared for other "things" to go wrong. (The previous owners may have known or not known.)
"Things happen." :wink:

RM
This signature is a placebo. You are in the control group.

tech_arch
Posts: 253
Joined: Wed May 27, 2015 11:47 am

Re: Buying first home with old hvac

Post by tech_arch » Mon May 01, 2017 8:49 pm

abs9986 wrote:There is an inspection contingency although I thought that was only if something was not working – technically the units are working it's just that they are 20 years old.

What do you other buyers do in similar situations?
As always, it depends on what is in your contract. The inspection clause in our last purchase allowed us withdraw our contract, without penalty, for any reason if we weren't happy with the findings.

I would consider the following questions.
* Do you feel the property is worth the agreed upon price given the age of the unit (perhaps this unit was priced lower than other comparable locations to compensate for the aging system?)
* Can you afford to replace the unit if it dies the day after you close?

I saw mention of a home warranty, paid for by the seller. I personally feel they're a waste of money given all of the exclusions they have, and I'm sure a system dying of old age would not be covered. The one that came with our house didn't even cover damage from a power surge when the electricity came back after a black out in our neighborhood.

User avatar
Pajamas
Posts: 6015
Joined: Sun Jun 03, 2012 6:32 pm

Re: Buying first home with old hvac

Post by Pajamas » Mon May 01, 2017 8:59 pm

I would look at it differently. If the current HVAC system is 20 years old, a new one that is more energy efficient may very well pay for itself in just a few years. Replacing it proactively would also allow you to schedule it when it is convenient and not under heavy use rather than in the middle of the winter or summer. The same thing may be true for the water heater and even appliances like the refrigerator and washing machine, if they happen to come with your new place.

Topic Author
abs9986
Posts: 84
Joined: Sun May 20, 2012 7:25 pm

Re: Buying first home with old hvac

Post by abs9986 » Mon May 01, 2017 9:01 pm

We can afford the 5k to replace no problem. I just wanted to know if this was a normal part of buying a first home or if I as the buyer have leverage. I don't believe the purchase price reflects how old the hvac is. Problem is that the seller is already taking a small loss since they bought right before the market high. It's been pretty hard to get them to come down in price already so I'm not sure if they would go any lower.

User avatar
Mlm
Posts: 433
Joined: Sat Apr 09, 2016 6:00 pm

Re: Buying first home with old hvac

Post by Mlm » Mon May 01, 2017 9:14 pm

Pajamas wrote:I would look at it differently. If the current HVAC system is 20 years old, a new one that is more energy efficient may very well pay for itself in just a few years. Replacing it proactively would also allow you to schedule it when it is convenient and not under heavy use rather than in the middle of the winter or summer. The same thing may be true for the water heater and even appliances like the refrigerator and washing machine, if they happen to come with your new place.
Agree. When I purchased my house I knew that it had a 25 year old furnace. I asked before inspection. At 35 years it finally failed and the replacement was so much more efficient it cut my heating bills by more than half. I think it paid for itself in three year. Wish I had done it sooner.

hightower
Posts: 627
Joined: Mon Dec 12, 2016 2:28 am

Re: Buying first home with old hvac

Post by hightower » Mon May 01, 2017 9:33 pm

This is definitely all part of buying and owning a home. Technically when you first tour the house you should be looking at things like the HVAC if possible and factoring that into your offer. But, it would not be unreasonable to try to negotiate a better price if you were unaware of the age of the HVAC at the time of the initial offer, especially if it was not in a place that could be viewed easily (like up on a roof or something).
But whether or not this will work is all dependent on how motivated the seller is and what your purchase agreement says. Those contracts vary widely from state to state. Read the fine print and see how hard it would be to back out of the deal without losing your good faith deposit. That will give you an idea of how much negotiating power you have.

Be prepared for all sorts of fun little surprises like this though. These sort of costs are inherent in owning vs. renting.

tibbitts
Posts: 9411
Joined: Tue Feb 27, 2007 6:50 pm

Re: Buying first home with old hvac

Post by tibbitts » Mon May 01, 2017 9:43 pm

abs9986 wrote:We can afford the 5k to replace no problem. I just wanted to know if this was a normal part of buying a first home or if I as the buyer have leverage. I don't believe the purchase price reflects how old the hvac is. Problem is that the seller is already taking a small loss since they bought right before the market high. It's been pretty hard to get them to come down in price already so I'm not sure if they would go any lower.
It's a normal part of buying an older home. You get to look around the home and it's pretty obvious roughly how old the hvac is. It isn't something you would wait to ask for a reduction for after you make an offer. Something like discovering non-obvious damage during a closer inspection would be something to ask for a reduction for after making an initial offer.

User avatar
ClevrChico
Posts: 1596
Joined: Tue Apr 03, 2012 8:24 pm

Re: Buying first home with old hvac

Post by ClevrChico » Mon May 01, 2017 9:59 pm

If you need to replace it, utility rebates and cheaper running costs will pay for it quickly.

My a/c and water heater are both at least 30 years old, still running.

User avatar
Watty
Posts: 18088
Joined: Wed Oct 10, 2007 3:55 pm

Re: Buying first home with old hvac

Post by Watty » Mon May 01, 2017 10:18 pm

This is normal but the house was priced with an older but working HVAC system and that is what the inspector found. I would not expect any large price reductions based on just on the age since it is working. Even if your inspector said that it was about to fail soon I would not expect the seller to pay anywhere near the entire cost of replacement.

I once bought a house that had an obviously older roof that failed the inspection. In going back and forth with the seller they agreed to pay for 20% of the new roof since the roof was 20 years old and should have had five years of a 25 year life left and that seemed like a fair compromise. I then had the roof put with a contractor I selected.

In some ways picking out the new HVAC system yourself is to your advantage since buying a good energy efficient one with features like variable or multiple speeds can save you money over the long run and be much more comfortable. If the seller replaced it they they would have likely put in the least expensive system possible.

If you are in an area where the AC is used a lot then the OLD AC may have only had a SEER energy rating of 12 or so when it was new 20 years ago. It is likely much worse now because of the systems age. Getting a new higher efficiency AC could make a dramatic difference in your cooling bill in a hot area.

The home warranties that the seller could buy are pretty worthless since the companies that sell then are notorious for doing minimal shoddy repairs my marginally qualified people, and taking multiple visits to actually fix a problem. If the home warranty would cost the seller $500 then you would almost always be better off just asking for a $500 credit instead of the home warranty. There have been threads about home warranties that you can search for.

Just FYI for next time. Equipment like that usually has a metal tag with the serial number and manufacture date that you could have looked at when you were house hunting before you made your offer. These can sometimes be hard to read but if you take a picture of it with your phone that is usually real easy to read when you zoom in. A pocket pack of wet-wipes can be useful to if they are real dirty.

September is a good time to buy HVAC systems in most of the country since it is not really heating or cooling season so the HVAC people have little other work to do. If you can get through the summer with the current system then that would be a good time to get bids on getting a replacement.
Last edited by Watty on Mon May 01, 2017 10:34 pm, edited 2 times in total.

User avatar
Kosmo
Posts: 1299
Joined: Wed Sep 05, 2012 11:54 am
Location: Philadelphia

Re: Buying first home with old hvac

Post by Kosmo » Mon May 01, 2017 10:32 pm

I think the seller would be nuts to negotiate on this. You'd be asking them to lower the price due to a functional air conditioner. What's next, is the roof keeping out too much rain?

Unless the unit was in a completely inaccessible location and you could not have possibly seen it prior to an inspection, your offer should have factored in any near term mechanical system maintenance or replacement.

Big Dog
Posts: 1633
Joined: Mon Sep 07, 2015 4:12 pm

Re: Buying first home with old hvac

Post by Big Dog » Mon May 01, 2017 10:44 pm

if you are that concerned, pay for an inspection/testing performed by an HVAC expert.

HVAC-Talk is a good source of info.
One way to address if buyers aren't willing to concede on price is to finance the purchase of a new A/C by asking the sellers to replace before sale and increasing purchase price by that much.
Not sure I'd go that route since I would prefer to hire the HVAC firm myself, instead of have the seller get the cheapest installer he can. in HVAC, installation is as important as the equipment, if not more so. Plus, the new home owner would be a LOT more concerned with efficiency, and might be willing to pay more for lower energy bills. The seller has no such incentive.

If its working and tests well, just plan to replace in the next few years. Start doing homework now to find a reputable dealer.

iamlucky13
Posts: 1586
Joined: Sat Mar 04, 2017 5:28 pm
Location: Western Washington

Re: Buying first home with old hvac

Post by iamlucky13 » Tue May 02, 2017 1:45 am

We had a pretty sizeable adjustment (~7%) to our offer based on our inspection. We knew the house would need some work, but we found more than expected during the inspection. It was a distressed sale during the recession, however. The seller wasn't in much of a position to say no.

If your seller is losing money versus their purchase price, but still selling for more than they owe (after taxes, commissions, etc.) they do have room to accept a lower offer, but they won't want to.

You'll have to decide for yourself whether to risk it. They may say yes. They may say no and switch to a backup offer if they have one. They may say no and make a counteroffer or tell you the offer on the table is the limit.

If you do revise your offer, on the assumption that that average house has a heating system that is halfway through its life cycle, I'd probably figure the revised offer should be adjusted by in the ballpark of 1/2 the replacement cost.
unclescrooge wrote:Ask seller to pay for a home warranty covering all appliances.
I've never priced one, but I'd doubt that would be the best value for either the buyer or the seller. I'm pretty sure they usually have an annual payout cap to protect the warranty company from paying for replacement HVAC systems, so it's effectively a coverage of unexpected repairs and simpler appliances, but with a profit margin factored in.
Kosmo wrote:I think the seller would be nuts to negotiate on this. You'd be asking them to lower the price due to a functional air conditioner. What's next, is the roof keeping out too much rain?
No. They'd be asking for a lower price based on an older than anticipated HVAC system. The same often gets done for roofs near the end of their expected lifespan.
Kosmo wrote:Unless the unit was in a completely inaccessible location and you could not have possibly seen it prior to an inspection, your offer should have factored in any near term mechanical system maintenance or replacement.
That's backwards. You're saying they should have factored in conditions prior to the inspection that an average buyer is not able to identify themselves. That's the whole reason inspection contingencies exist.

User avatar
just frank
Posts: 1455
Joined: Sun Nov 02, 2014 4:13 pm
Location: Philly Metro

Re: Buying first home with old hvac

Post by just frank » Tue May 02, 2017 5:09 am

Let's keep it simple. Home maintenance on an existing home will cost you about 1% of the value of the house per year. Budget that amount per year, and sometimes it will be a little more, sometimes a little less. HVAC repair and replacement is 'in there'. Remodeling is not.

The bigger question is to look carefully for 'deferred maintenance'. The previous owner of my house clearly did little maintenance (caulking the roof when it leaked, pulled up carpet when basement flooded, rather than fix, etc) for 19 years. 3 different realtors refused to sell it until he fixed it up (according to the neighbors). He ended up spending $50k for work on it 6 mos before he sold it. I ended up spending about $30k above the 1% rule over the following 5 years before we got the place 'caught up'. I am not (too) upset, b/c the price of the house was marked down at least that much relative to comps.

an_asker
Posts: 2603
Joined: Thu Jun 27, 2013 2:15 pm

Re: Buying first home with old hvac

Post by an_asker » Tue May 02, 2017 9:56 am

OP:

Personally, I don't think it is "right" to try to renegotiate the purchase price of the property after you've once agreed. That is unfair to the seller. Not that it does not happen; just that I wouldn't do it.
tech_arch wrote:[...]I saw mention of a home warranty, paid for by the seller. I personally feel they're a waste of money given all of the exclusions they have, and I'm sure a system dying of old age would not be covered. The one that came with our house didn't even cover damage from a power surge when the electricity came back after a black out in our neighborhood.
I agree. All it does is that you get a house call for a specific service fee. Once that fee is paid, you still have to pay for the repairs, if any. The minor repairs that are, indeed, covered in the service call would not have cost as much as it costs for the warranty in the first place@ Of course, if all appliances have issues in that year, you might still come out ahead with the warranty!!

an_asker
Posts: 2603
Joined: Thu Jun 27, 2013 2:15 pm

Re: Buying first home with old hvac

Post by an_asker » Tue May 02, 2017 9:59 am

iamlucky13 wrote:[...]
Kosmo wrote:I think the seller would be nuts to negotiate on this. You'd be asking them to lower the price due to a functional air conditioner. What's next, is the roof keeping out too much rain?
No. They'd be asking for a lower price based on an older than anticipated HVAC system. The same often gets done for roofs near the end of their expected lifespan.
Kosmo wrote:Unless the unit was in a completely inaccessible location and you could not have possibly seen it prior to an inspection, your offer should have factored in any near term mechanical system maintenance or replacement.
That's backwards. You're saying they should have factored in conditions prior to the inspection that an average buyer is not able to identify themselves. That's the whole reason inspection contingencies exist.
What is the proper/anticipated age for an HVAC system on a 20 year old house? The seller can either state explicitly "new AC" or not state anything. One would assume that if nothing was stated, it is the original HVAC that came with the house. Now, if the seller states "new AC" and the AC is actually five years old, I would have reason to renegotiate!

clutchied
Posts: 647
Joined: Mon Jan 05, 2015 12:11 pm

Re: Buying first home with old hvac

Post by clutchied » Tue May 02, 2017 10:20 am

abs9986 wrote:We are in process of buying our first condo and after the inspection found out that all hvac equipment is original and 20 years old. Everything is working fine but I'm worried that this will be a big expense at some point soon. We already agreed on the purchase price.

Any recommendations on what we can do? Can we ask for credit or replacement or a warranty. This must happen a lot so I'm curious what others do.

this has been a significant point of frustration for me. We bought a house w/ 34 year old HVAC and it crapped at 39 years.

We bought another house w/ 25 year old HVAC and it's still going on 28 years... The old stuff will probably rust out or we'll pay more in warranty fees and it will die as soon as we discontinue.


What is there to do except ask for a concession of some sort. They've used the life of the asset should we not get a credit for the usage? I haven't figured out how to win this game yet and I don't like new construction.

mrc
Posts: 1399
Joined: Sun Jan 10, 2016 6:39 am

Re: Buying first home with old hvac

Post by mrc » Tue May 02, 2017 10:29 am

The unit might last another 10 years. A newer unit will likely be more energy efficient. If replacing right away puts you over the edge financially, are you buying too much house? We bought in a seller's market and would have never even mentioned it (so long as it was currently in working condition).
Last edited by mrc on Tue May 02, 2017 10:40 am, edited 1 time in total.
Macs are for those who don’t want to know why their computer works | Linux is for those who do | DOS is for those who want to know why their computer doesn’t work | Windows is for those who don’t

User avatar
Pajamas
Posts: 6015
Joined: Sun Jun 03, 2012 6:32 pm

Re: Buying first home with old hvac

Post by Pajamas » Tue May 02, 2017 10:32 am

clutchied wrote:

this has been a significant point of frustration for me. We bought a house w/ 34 year old HVAC and it crapped at 39 years.

We bought another house w/ 25 year old HVAC and it's still going on 28 years... The old stuff will probably rust out or we'll pay more in warranty fees and it will die as soon as we discontinue.


What is there to do except ask for a concession of some sort. They've used the life of the asset should we not get a credit for the usage? I haven't figured out how to win this game yet and I don't like new construction.
Just curious if you did a cost-benefit analysis of replacing a 25 or 34 year old HVAC with a newer energy efficient model rather than waiting for them to malfunction?

clutchied
Posts: 647
Joined: Mon Jan 05, 2015 12:11 pm

Re: Buying first home with old hvac

Post by clutchied » Tue May 02, 2017 10:41 am

Pajamas wrote:
clutchied wrote:

this has been a significant point of frustration for me. We bought a house w/ 34 year old HVAC and it crapped at 39 years.

We bought another house w/ 25 year old HVAC and it's still going on 28 years... The old stuff will probably rust out or we'll pay more in warranty fees and it will die as soon as we discontinue.


What is there to do except ask for a concession of some sort. They've used the life of the asset should we not get a credit for the usage? I haven't figured out how to win this game yet and I don't like new construction.
Just curious if you did a cost-benefit analysis of replacing a 25 or 34 year old HVAC with a newer energy efficient model rather than waiting for them to malfunction?
I did; it was cheaper to replace most all of my lights with LED's instead. Also the life expectancy of newer units is more or less 10 years. That's a rough pill to swallow when the last one went 39yrs.... (Day & Night brand)

I would also install ground mount solar before replacing the units(obviously not an option for everyone). I tend to buy and hold though so long term strategy has played well for me.

I've never sold a house....

User avatar
Pajamas
Posts: 6015
Joined: Sun Jun 03, 2012 6:32 pm

Re: Buying first home with old hvac

Post by Pajamas » Tue May 02, 2017 11:00 am

clutchied wrote: I did; it was cheaper to replace most all of my lights with LED's instead. Also the life expectancy of newer units is more or less 10 years. That's a rough pill to swallow when the last one went 39yrs.... (Day & Night brand)
I replaced an old refrigerator with a newer one roughly ten years ago. It more than paid for itself in energy savings in less than three years, but the quality is noticeably inferior in many other ways. The only better aspects are the energy savings and the glass shelves. I don't expect this one to last nearly as long as the last one and I don't like the idea of practically disposable major appliances.

clutchied
Posts: 647
Joined: Mon Jan 05, 2015 12:11 pm

Re: Buying first home with old hvac

Post by clutchied » Tue May 02, 2017 11:03 am

Pajamas wrote:
clutchied wrote: I did; it was cheaper to replace most all of my lights with LED's instead. Also the life expectancy of newer units is more or less 10 years. That's a rough pill to swallow when the last one went 39yrs.... (Day & Night brand)
I replaced an old refrigerator with a newer one roughly ten years ago. It more than paid for itself in energy savings in less than three years, but the quality is noticeably inferior in many other ways. The only better aspects are the energy savings and the glass shelves. I don't expect this one to last nearly as long as the last one and I don't like the idea of practically disposable major appliances.
cheers!

I would probably be more inclined if I didn't pay fixed kWh's @ $0.15 all in.

sls239
Posts: 942
Joined: Thu Oct 23, 2008 4:04 pm

Re: Buying first home with old hvac

Post by sls239 » Tue May 02, 2017 11:14 am

Generally, the age of a major component like the HVAC would be in the seller's disclosure form. Did you get that form? If not, I would say that is a bigger problem. If you did get it before you made the offer, then the age of the HVAC isn't an inspection issue.

User avatar
deanbrew
Posts: 1322
Joined: Wed Jul 21, 2010 12:05 pm
Location: The Keystone State

Re: Buying first home with old hvac

Post by deanbrew » Tue May 02, 2017 11:30 am

tibbitts wrote: It's a normal part of buying an older home. You get to look around the home and it's pretty obvious roughly how old the hvac is. It isn't something you would wait to ask for a reduction for after you make an offer. Something like discovering non-obvious damage during a closer inspection would be something to ask for a reduction for after making an initial offer.
I agree completely. The OP is not buying new construction. He had a chance to look around and make the offer he wanted to make. I think it is unethical to now say he doesn't like the fact that the property has a 20 year old HVAC system, and want to negotiate the price down further. Yes, I know it happens all of the time, and (as they say) everything is negotiable. But that doesn't make it honorable, or proper. A 20 year old furnace is not a defect, it is part of the property. It may very well work fine for another ten years.
"The course of history shows that as the government grows, liberty decreases." Thomas Jefferson

User avatar
deanbrew
Posts: 1322
Joined: Wed Jul 21, 2010 12:05 pm
Location: The Keystone State

Re: Buying first home with old hvac

Post by deanbrew » Tue May 02, 2017 11:34 am

clutchied wrote: this has been a significant point of frustration for me. We bought a house w/ 34 year old HVAC and it crapped at 39 years.

We bought another house w/ 25 year old HVAC and it's still going on 28 years... The old stuff will probably rust out or we'll pay more in warranty fees and it will die as soon as we discontinue.


What is there to do except ask for a concession of some sort. They've used the life of the asset should we not get a credit for the usage? I haven't figured out how to win this game yet and I don't like new construction.
No, you shouldn't get a credit AFTER you negotiate the price you are willing to pay and the seller negotiates the price they are willing to sell. I just don't understand your line of thought. Are you prorating the use and wear of the roof, windows, carpets, faucets, etc, and expecting the seller to lower the price for each after an agreed sales price has been determined?

Frankly, it sounds like you DO like new construction, so you know that everything in the house is brand new with no wear or use.
"The course of history shows that as the government grows, liberty decreases." Thomas Jefferson

clutchied
Posts: 647
Joined: Mon Jan 05, 2015 12:11 pm

Re: Buying first home with old hvac

Post by clutchied » Tue May 02, 2017 11:39 am

deanbrew wrote:
clutchied wrote: this has been a significant point of frustration for me. We bought a house w/ 34 year old HVAC and it crapped at 39 years.

We bought another house w/ 25 year old HVAC and it's still going on 28 years... The old stuff will probably rust out or we'll pay more in warranty fees and it will die as soon as we discontinue.


What is there to do except ask for a concession of some sort. They've used the life of the asset should we not get a credit for the usage? I haven't figured out how to win this game yet and I don't like new construction.
No, you shouldn't get a credit AFTER you negotiate the price you are willing to pay and the seller negotiates the price they are willing to sell. I just don't understand your line of thought. Are you prorating the use and wear of the roof, windows, carpets, faucets, etc, and expecting the seller to lower the price for each after an agreed sales price has been determined?

Frankly, it sounds like you DO like new construction, so you know that everything in the house is brand new with no wear or use.

the price is negotiated prior to inspections. If the inspection happens and things are at end of life like the roof or HVAC yes, I expect to be able to negotiate something on those.

I don't think that is unreasonable. You can't expect to command full price on a previously negotiated item to later find out things are at end of life. Maybe I'm crazy or maybe it's because I've had to replace HVAC a couple of years after buying a house that I don't see it that way... I always ask and they are welcome to say no.

User avatar
deanbrew
Posts: 1322
Joined: Wed Jul 21, 2010 12:05 pm
Location: The Keystone State

Re: Buying first home with old hvac

Post by deanbrew » Tue May 02, 2017 11:48 am

clutchied wrote:the price is negotiated prior to inspections. If the inspection happens and things are at end of life like the roof or HVAC yes, I expect to be able to negotiate something on those.

I don't think that is unreasonable. You can't expect to command full price on a previously negotiated item to later find out things are at end of life. Maybe I'm crazy or maybe it's because I've had to replace HVAC a couple of years after buying a house that I don't see it that way... I always ask and they are welcome to say no.
The price is negotiated prior to inspections that are designed to show if anything is not working or if there are unobservable defects. You can easily look at the roof and HVAC system while you walk through the property. Or ask the seller how old they are and if there are any problems before making an offer. It is unethical to negotiate a price knowing the roof and HVAC are 20 years old and then come back later and try to get the price lowered because, well, they are 20 years old.

And what is "full price"? There is no "full price" when it comes to resale homes (or cars or boats or RVs or anything else). I plan to sell my home in a couple of years, and some of the comments on here are making me dread the process after I think I have negotiated a sale price. My inclination is to "say no" to any buyer who wants to negotiate the deal after we have negotiated the deal.
"The course of history shows that as the government grows, liberty decreases." Thomas Jefferson

User avatar
Kosmo
Posts: 1299
Joined: Wed Sep 05, 2012 11:54 am
Location: Philadelphia

Re: Buying first home with old hvac

Post by Kosmo » Tue May 02, 2017 11:49 am

iamlucky13 wrote:
Kosmo wrote:I think the seller would be nuts to negotiate on this. You'd be asking them to lower the price due to a functional air conditioner. What's next, is the roof keeping out too much rain?
No. They'd be asking for a lower price based on an older than anticipated HVAC system. The same often gets done for roofs near the end of their expected lifespan.
Kosmo wrote:Unless the unit was in a completely inaccessible location and you could not have possibly seen it prior to an inspection, your offer should have factored in any near term mechanical system maintenance or replacement.
That's backwards. You're saying they should have factored in conditions prior to the inspection that an average buyer is not able to identify themselves. That's the whole reason inspection contingencies exist.
It requires no special knowledge or training to determine the approximate age of an HVAC system. Just by visual inspection you can reasonably estimate the age. And the manufacture date will be either stamped on a component or be part of the serial number. HVAC components are usually easily accessible for maintenance and repairs, so there should be no issue performing a visual inspection and finding serial numbers. So yes, this information is readily available and should factor into the purchase offer that is made regardless of the inspection. The inspection is for non-obvious things like a cracked heat exchanger or a faulty valve.

an_asker
Posts: 2603
Joined: Thu Jun 27, 2013 2:15 pm

Re: Buying first home with old hvac

Post by an_asker » Tue May 02, 2017 11:55 am

clutchied wrote:[...]the price is negotiated prior to inspections. If the inspection happens and things are at end of life like the roof or HVAC yes, I expect to be able to negotiate something on those.

I don't think that is unreasonable. You can't expect to command full price on a previously negotiated item to later find out things are at end of life. Maybe I'm crazy or maybe it's because I've had to replace HVAC a couple of years after buying a house that I don't see it that way... I always ask and they are welcome to say no.
I'm confused. Are you buying the house using the following logic?

- Land - $xxx,xxx
- House shell - $xxx, xxx
- House interior - $xxx,xxx
- Fridge - $xxxx
- A/C - $xxxx
- Washing Machine - $xxxx
- Dryer - $xxxx
yada yada yada

If so, yes, I agree that the appliances cannot command full price. Else, how can you expect to start knocking down the price by (imaginary) line item and expect to be logical? Note that I'm not saying that you won't win - you might have definitely won during the lows of the housing market - with that strategy.

Another analogy: When you buy a car, do you negotiate the price, then say "take $5 off for the old windshield wiper, $50 off for the tires, $500 off for the old engine, $200 off for the transmission, ..."? Don't you see how silly that sounds? Again, if the seller is "motivated", he/she might say "oh well, let's knock $500 off and do the sale right now."

But right now with the housing market where it is, it is easier to find a "motivated buyer" than a "motivated seller". Might not happen with this seller, but there is always the chance that a really upset seller might call off the transaction entirely as he/she might not appreciate being nickel-and-dimed.

jharkin
Posts: 2405
Joined: Mon Mar 28, 2016 7:14 am
Location: Boston suburbs

Re: Buying first home with old hvac

Post by jharkin » Tue May 02, 2017 11:58 am

OP-

Can you give us more detail about what kind of HVAC system the home has?

Is the heat forced air or hot water? If its water is it radiators, baseboards, in floor radiant?
If its air is it heat pump?
electric? gas? oil?
central air?
what about the water heater - standalone unit or is it combined with the boiler if its hot water heat? If standalone is it a tank or tankless?


We need to know a lot more detail to tell you if it needs to be replaced. Inspection reports will list any home system that is out of warranty as "functionally obsolete" but that doesn't mean its anywhere close to failing. I dont know what the average life expectancy for forced air systems is but Ive seen lots of them beyond 20 years old that work just fine, and even an early 90s system might have 90%+ efficiency so the fuel bill savings of replacing it before it dies wont be that significant.

If its hot water, cast iron boiler systems can easily last 30, 40, 50 years or more.. Ive lived in apartments with heating plants from the 1950s and earlier still functioning. Those systems ARE old enough that replacement has a good ROI on the fuel cost savings alone.


I've also met a few people that replaced an old, inefficient but serviceable system with a new ultra high efficiency (like the modern computer controlled 98-99% efficient modulating and condensing gas furnaces) and regretted it because the new systems are more complex and break down a lot more often. So think about it carefully and get some recommendations from good HVAC contractors before deciding.
Last edited by jharkin on Tue May 02, 2017 11:59 am, edited 1 time in total.

an_asker
Posts: 2603
Joined: Thu Jun 27, 2013 2:15 pm

Re: Buying first home with old hvac

Post by an_asker » Tue May 02, 2017 11:58 am

deanbrew wrote:[...]My inclination is to "say no" to any buyer who wants to negotiate the deal after we have negotiated the deal.
That's exactly what I was getting at in the last paragraph of my previous response!

User avatar
Nate79
Posts: 5312
Joined: Thu Aug 11, 2016 6:24 pm
Location: Delaware

Re: Buying first home with old hvac

Post by Nate79 » Tue May 02, 2017 12:27 pm

Welcome to the life of a homeowner, the need for a hefty emergency fund and unexpected costs. No matter what you do in this situation if you purchase this condo or another one things fail. Whether it is a roof, HVAC, fridge, etc you need to be prepared for the inevitable failure. This is because the entire house is used and many points of failure can happen. Nothing has a specific lifespan. This 20y HVAC may be the longest lasting part of the condo for all you know.

User avatar
unclescrooge
Posts: 4190
Joined: Thu Jun 07, 2012 7:00 pm

Re: Buying first home with old hvac

Post by unclescrooge » Tue May 02, 2017 12:33 pm

unclescrooge wrote:Ask seller to pay for a home warranty covering all appliances.
I've never priced one, but I'd doubt that would be the best value for either the buyer or the seller. I'm pretty sure they usually have an annual payout cap to protect the warranty company from paying for replacement HVAC systems, so it's effectively a coverage of unexpected repairs and simpler appliances, but with a profit margin factored in.

.[/quote]
It should cost less than $500. In general it's a waste of money, but when buying a first house, the buyer is usually financially stretched.

Having to come with another $5k right after closing might be a bit difficult. I know it was for me, and based on this post it sounds like it might be for OP.

clutchied
Posts: 647
Joined: Mon Jan 05, 2015 12:11 pm

Re: Buying first home with old hvac

Post by clutchied » Tue May 02, 2017 12:36 pm

deanbrew wrote:
clutchied wrote:the price is negotiated prior to inspections. If the inspection happens and things are at end of life like the roof or HVAC yes, I expect to be able to negotiate something on those.

I don't think that is unreasonable. You can't expect to command full price on a previously negotiated item to later find out things are at end of life. Maybe I'm crazy or maybe it's because I've had to replace HVAC a couple of years after buying a house that I don't see it that way... I always ask and they are welcome to say no.
The price is negotiated prior to inspections that are designed to show if anything is not working or if there are unobservable defects. You can easily look at the roof and HVAC system while you walk through the property. Or ask the seller how old they are and if there are any problems before making an offer. It is unethical to negotiate a price knowing the roof and HVAC are 20 years old and then come back later and try to get the price lowered because, well, they are 20 years old.

And what is "full price"? There is no "full price" when it comes to resale homes (or cars or boats or RVs or anything else). I plan to sell my home in a couple of years, and some of the comments on here are making me dread the process after I think I have negotiated a sale price. My inclination is to "say no" to any buyer who wants to negotiate the deal after we have negotiated the deal.
I would say no too.

clutchied
Posts: 647
Joined: Mon Jan 05, 2015 12:11 pm

Re: Buying first home with old hvac

Post by clutchied » Tue May 02, 2017 12:44 pm

unclescrooge wrote:
unclescrooge wrote:Ask seller to pay for a home warranty covering all appliances.
I've never priced one, but I'd doubt that would be the best value for either the buyer or the seller. I'm pretty sure they usually have an annual payout cap to protect the warranty company from paying for replacement HVAC systems, so it's effectively a coverage of unexpected repairs and simpler appliances, but with a profit margin factored in.

.
It should cost less than $500. In general it's a waste of money, but when buying a first house, the buyer is usually financially stretched.

Having to come with another $5k right after closing might be a bit difficult. I know it was for me, and based on this post it sounds like it might be for OP.[/quote]

they are about $500-$600 and are pretty standard at this point.

iamlucky13
Posts: 1586
Joined: Sat Mar 04, 2017 5:28 pm
Location: Western Washington

Re: Buying first home with old hvac

Post by iamlucky13 » Tue May 02, 2017 12:56 pm

Kosmo wrote:
iamlucky13 wrote:
Kosmo wrote:I think the seller would be nuts to negotiate on this. You'd be asking them to lower the price due to a functional air conditioner. What's next, is the roof keeping out too much rain?
No. They'd be asking for a lower price based on an older than anticipated HVAC system. The same often gets done for roofs near the end of their expected lifespan.
Kosmo wrote:Unless the unit was in a completely inaccessible location and you could not have possibly seen it prior to an inspection, your offer should have factored in any near term mechanical system maintenance or replacement.
That's backwards. You're saying they should have factored in conditions prior to the inspection that an average buyer is not able to identify themselves. That's the whole reason inspection contingencies exist.
It requires no special knowledge or training to determine the approximate age of an HVAC system. Just by visual inspection you can reasonably estimate the age. And the manufacture date will be either stamped on a component or be part of the serial number. HVAC components are usually easily accessible for maintenance and repairs, so there should be no issue performing a visual inspection and finding serial numbers. So yes, this information is readily available and should factor into the purchase offer that is made regardless of the inspection. The inspection is for non-obvious things like a cracked heat exchanger or a faulty valve.
That would be an inspection, and the average homeowner most certainly does not know how a given manfacturer has encoded dates in serial numbers or behind what cover something with a date might be, nor even what a typical heating system life expectancy is.

If you think that inspection contingencies only cover things that can not possibly be discovered during a viewing, that is false.

ReadyOrNot
Posts: 243
Joined: Sun Aug 21, 2016 1:51 pm

Re: Buying first home with old hvac

Post by ReadyOrNot » Tue May 02, 2017 1:48 pm

Even on the west coast, usually a seller's market, I always have assumed everything that the inspection finds is up for negotiation. The inspectors I used did point out the age of water heaters, air conditioning, etc. -- in one case, the seller indicated things were pretty much "as is" except for what the handyman used by the real estate agents could fix. In another case we asked for, and got, what my agent estimated for the cost for replacement by the handyman (much cheaper than legitimate trade workers). In this seller's market, many buyers waive the inspection (seems crazy to me), implying that everyone else understands that an inspection means some re-negotiation.

TheJourneyContinues
Posts: 35
Joined: Thu Apr 30, 2015 8:14 pm

Re: Buying first home with old hvac

Post by TheJourneyContinues » Tue May 02, 2017 1:51 pm

We were in a similar situation with our first home. We asked for an HVAC pro to inspect and certify it was running as it should be and then let it go. Other factors that influenced this decision:
- we were in a seller's market - it was pretty clear that our seller could easily exercise their other options if we tried to negotiate on this
- the owner clearly wasn't being negligent - the house was well cared for and other things had been fixed/replaced when necessary
It was a bummer to know we would be hit with a big expense in the next few years, but we just considered it part of the cost of buying the home.

User avatar
Meg77
Posts: 2584
Joined: Fri May 22, 2009 1:09 pm
Location: Dallas, TX
Contact:

Re: Buying first home with old hvac

Post by Meg77 » Tue May 02, 2017 1:56 pm

What does your realtor say? He or she should know what is typically acceptable and commonly negotiated in your area on those types of properties.

I've bought and sold condos and other homes - in every single case the seller paid for a one year home warranty which covers the replacement of any major appliances if there are any issues during that time. That would be appropriate to ask for in this case at a bare minimum. You can always ask for whatever you want - perhaps a credit to closing costs for $1500 - $2500 to go toward the eventual replacement. They can say no of course, but it wouldn't hurt to ask in my experience.

Keep in mind that replacing HVAC units in condo buildings can sometimes require the rental of a crane since most units are kept on rooftops. I have run into this twice; there are stairways for people to be able to get up and inspect or make repairs, but often they aren't large enough to accommodate the units themselves. That'll add some $$ to the cost of replacement.
"An investment in knowledge pays the best interest." - Benjamin Franklin

b42
Posts: 341
Joined: Thu Apr 11, 2013 7:00 pm

Re: Buying first home with old hvac

Post by b42 » Tue May 02, 2017 2:25 pm

I was in a similar situation. I bought a 19 year-old condo in July 2015, with a 19 year-old heat pump and air exchanger. The outside unit failed in April 2016 and I had the option to get a $1,000 part that may not have fixed the problem, or replace both the inside and outside units. I ended up replacing everything for $3,725. I had expected the heat pump to last a bit longer, but I knew going in that it would need to be replaced soon. And I now have the benefit of a much more efficient unit, and at the time I got a $300 federal tax credit for putting in an energy efficient model.

btenny
Posts: 5218
Joined: Sun Oct 07, 2007 6:47 pm

Re: Buying first home with old hvac

Post by btenny » Tue May 02, 2017 2:27 pm

Ask the seller to provide a Home Warranty repair policy that covers everything including the AC unit and all appliances with a low deductible and a low service call charge. These usually cost $400-$500 per year. They can be renewed every year. That way the seller can live with the sale for minimum cost and you can live with the results. Then if the AC breaks within the year it will get fixed for about $150 cost (service charge of $50 + $100 deductible) or less. Most everyone here in Arizona does this as standard sales practice. That way if something breaks soon after the sale it get fixed at low cost and everyone is still happy.

My BIL has used his policy 3 times (?) to get stuff fixed in the last 3 years since he bought his 20 year old house. One of those calls was for his 23 year old AC unit. The only cost to him was the $400 per year renewal fee and some service call fees. His policy is zero deductible plus a service call $$.

Good Luck.

User avatar
Kosmo
Posts: 1299
Joined: Wed Sep 05, 2012 11:54 am
Location: Philadelphia

Re: Buying first home with old hvac

Post by Kosmo » Tue May 02, 2017 2:33 pm

iamlucky13 wrote:That would be an inspection, and the average homeowner most certainly does not know how a given manfacturer has encoded dates in serial numbers or behind what cover something with a date might be, nor even what a typical heating system life expectancy is.
Unless you buy sight unseen, you make a visual inspection of the house. An open house, a private showing, etc. You can relatively easily estimate the age of everything in the house. Certainly HVAC, water heater, well pump, appliances, and the like. Things like wood flooring and cabinets, less so because they can be refinished. The buyer is expected to observe these items and factor in their condition to the price offered. 5 minutes or less on the internet will tell you how to read any manufacturers serial number.

An inspection by a certified inspector is to find things that are non-obvious to the buyer. And for anything non-obvious to him, he's going to recommend a specialist (HVAC tech, plumber, electrician, etc.) as CYA.

Post Reply