Buy very old house without buyer agent

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lmea
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Joined: Wed Mar 25, 2015 8:06 pm

Buy very old house without buyer agent

Post by lmea »

Hi,

Where I live, single houses are very expensive. Houses built before 1900 with 3-4 bedrooms are in the range of 600K-700K. I am going to look at these old houses since they are only ones in my price range. Since houses are expensive here, many people look for house by themselves with out buyer agents and hope that it would reduce the purchase price. I have two questions, I wonder if you could give advice.

1. For these old houses, what are the issues I should be aware of besides the lead paint? I heard the "lead paint" issue of the old house? How do I fix it if the house I am interested in has lead paint ?

2. Is it wise to go buy the house without a buyer agent ? What should I be aware of if I do not have a buyer agent who represents me ?

Thank you very much for your help.
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Sandtrap
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Re: Buy very old house without buyer agent

Post by Sandtrap »

You are buying a FSBO or MLS listing without an agent (sales person on commission) therefore do as much due diligence as you would buying a used car. Suggest legal counsel to draw up the needed sales contracts. Pick a title company to handle the escrow. And, take along a reputable licensed General Building Contractor in your area who is familiar with these types of homes and the area. It is in his best interest to "find things wrong" in the hope that you will hire him to correct discrepancies after the sale. If he is qualified to do a written home inspection then all the better and get it all in writing with a full report.
Require full disclosure from the owner. In many states, disclosure on lead paint, asbestos, mold, structural issues, etc, is required. Depends on the locale. If the electrical wiring is the old "knob and tube", you might consider an upgrade in negotiations.

If the property is being sold "as is" then the above still applies.

Regarding lead paint. In many instances it is more toxic to remove it. It can be sealed in with suitable primer and finish coats. Again, depends on state and county local practices. Same goes for older asphalt asbestos based floor tile, etc.

J :D
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StealthRabbit
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Re: Buy very old house without buyer agent

Post by StealthRabbit »

follow above ^^^ (due diligence + a RE attorney if needed)

Of 30+ Property transactions I have never had a "buyers-agent" (nor would I ever want one)

Too many people complicate the transactions (cost and time), and 'RE Agents are about 10x more expensive than RE attorneys (who actually offer some value).

Commercial stuff, I am more careful (superfund cleanup potential), but in any event, a buyers agent offers nothing but negotiation skills (+/-) and huge expenses that go with it.

Often a transaction (that is handled by a selling OR a buying agent will have fixed commissions. In that case, the more people you add ... the lower the cut for each party. If you need someone on your side of the table, it will not cost you extra money (out of your pocket).. but any property that is 'listed' has already had the 10% additional cost inserted in the price.

Get you money's worth. BTW: a good RE attorney in most regions will be about $300/ hr (that is a FAR cry less than paying 7-10% to someone who can legally offer you NO ADVICE! :oops: ).
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Watty
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Re: Buy very old house without buyer agent

Post by Watty »

Your lender may require serious defects be fixed for the loan to be approved so be prepared for that.

One thing to watch out for is that if you have to stretch to buy a very old house then you might not be able to afford to do necessary repairs so you need to figure out how that would work with your budget.
Yooper16
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Re: Buy very old house without buyer agent

Post by Yooper16 »

As been stated above, you'll be fine without a buyers agent. We did go through a RE office, but we were a long distance search and needed to find a house ASAP. Our house sold in 36 hours at 25K over asking, if we could be gone in 7 days from closing. So we had roughly a month to look, find and buy. Forutnately the house we liked was vacant.

You will need assistance in determining if the price is reasonable. finding someone to do an inspection that is not your typical inspector will be hugely important for an old house. There will be issues that a "normal" inspector generally would not be able to address. Legal stuff just requires that you have a competent attorney.

We are about 2years and 35K into our reno of a 118 year old 3 story and have not yet hit the 2nd floor bath nor anything on the 1st floor. We are also somewhat experience at this and I have a moderate degree of competency with finish carpentry. We did buy ours quickly with just a standard inspection. We have done 2 other house renos, not quite this old but getting there. Even then we still have had a couple of mini surprises.

Lead paint can be an issue, if you sand and scrape it.. Asbestos will often be in the pipe dope for the supplies to the radiators, so not a big issues there. Maybe asbestos shingles for outside cladding. Pay big attention to the roof and chimney. Very expensive fixes that can't wait if there is a problem.

Biggest thing to do though, if to live with the house as it is for the 1st year or so and only do to it what is absolutely needed, and then make a plan. Make a budget and double it. Old houses are well worth the aggravation and the adventure and graciously accept most any decorating style you like.

Have fun.
jharkin
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Re: Buy very old house without buyer agent

Post by jharkin »

Pre-1900 is not that old really. I live in a house that is pre-1800. There are pre-1700 buildings in my town.

Buy this book before proceeding. One of the first chapters deals with how to prioritize issues and tell critical problems from non-critical.

https://www.amazon.com/Renovating-Old-H ... old+houses

If you really get into it, you can also join an old house owners group and ask questions
https://thehistoricdistrict.org/

An old house doesn't have to be scary. In many ways they are actually built a lot more solid than modern construction. In my house, 90% of the problems I have are with bad modern renovations from previous owners, not the original structure.
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nativenewenglander
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Re: Buy very old house without buyer agent

Post by nativenewenglander »

I think you need to ask yourself if you are buying the house because it's cheaper or because you like the adventure of an old house.
I've owned four old houses since the age of 22, I'm now 56. Old houses to me are a lifestyle, so the decision to buy is not really financial.
Old houses can be enjoyable to restore and live, but to say you're buying because it's in your price range may be something you regret down the road.
We are about to fix the porch on our house, which will cost about $15,000. The house cost us $138,000, I may or may not live long enough to recoup the investment, but frankly don't care.
adamthesmythe
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Re: Buy very old house without buyer agent

Post by adamthesmythe »

An old house always has expensive stuff that either MUST be done now or should be done soon. Not to mention the stuff that you can defer for a while. To own an old house, you either need to have plenty of money and/ or the knowledge to fix stuff yourself, or at least enough knowledge to hire people that won't overcharge you. And you need to know enough to know the difference between must, should, and defer.

If money really is tight- and the 3% you might hope to save by not using a buyer's agent is critical- you really ought to look at townhouses, condos, whatever. Or just rent.
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hand
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Re: Buy very old house without buyer agent

Post by hand »

lmea wrote: Sun Dec 17, 2017 9:29 pm Hi,

Where I live, single houses are very expensive. Houses built before 1900 with 3-4 bedrooms are in the range of 600K-700K. I am going to look at these old houses since they are only ones in my price range. Since houses are expensive here, many people look for house by themselves with out buyer agents and hope that it would reduce the purchase price. I have two questions, I wonder if you could give advice.

1. For these old houses, what are the issues I should be aware of besides the lead paint? I heard the "lead paint" issue of the old house? How do I fix it if the house I am interested in has lead paint ?

2. Is it wise to go buy the house without a buyer agent ? What should I be aware of if I do not have a buyer agent who represents me ?

Thank you very much for your help.
While house buying is not a terribly difficult process at its core, if your knowledge of the challenges of old houses is limited to lead paint (even if you are working hard to learn) it is probably worth having experts to advise you during the process. Certainty a Real Estate lawyer to help with the contracts process, but you also need someone who knows older houses who can advise you on quality, maintenance issues and likely costs / challenges during your ownership.

Unfortunately it is rare that a buyers agent or inspector will truly fill the role of an old house adviser. If you plan to renovate, one path is to include your inspector in the review process. If you have lots of money, a time honored process is to buy an old house you love and pay whatever is required to maintain and improve which yields dividends in terms of experience for the next house and great cocktail party stories.

Considering an older house because you can't afford anything newer - especially if you don't have the expertise to assess risks or ongoing costs strikes me as a huge red flag.

Just a couple of areas to add to your list to worry about in an older house: Knob & Tube wiring, Aluminum wiring, ungrounded outlets, insufficient electrical service, aesbestos, poor insulation, insufficient closet space, structural issues, termites, mold, water ingress, roofing requiring replacement, failing plumbing, failing waste line, and on and on.

Older houses can be beautiful and contain features that are no longer economic, but these beautiful houses don't cost less than newer homes because they have more character, they cost less because of the hassle, risk and cost to repair and maintain to the same levels as more modern houses.
quantAndHold
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Re: Buy very old house without buyer agent

Post by quantAndHold »

adamthesmythe wrote: Mon Dec 18, 2017 1:37 pm An old house always has expensive stuff that either MUST be done now or should be done soon.
This is not true.

Old houses can be well maintained and have maintenance costs that are less than a modern house, or poorly maintained money pits. They are often (but not always) better built than modern houses. Our current old house, for example, was built when they were plundering the redwood forests, so it has redwood framing, which is much more resistant to termites than more recent construction. When we bought it, it was clearly an old house, but it had been carefully maintained, and the plumbing had been already upgraded to copper. In the 20 years we've owned it, it hasn't cost us any more than a newer house would have cost for the same time period.

The main thing is to hire a good inspector and find out what you're looking at and get an idea of what you're going to need to do.
Yes, I’m really that pedantic.
Yooper16
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Re: Buy very old house without buyer agent

Post by Yooper16 »

quantAndHold wrote: Mon Dec 18, 2017 3:38 pm
adamthesmythe wrote: Mon Dec 18, 2017 1:37 pm An old house always has expensive stuff that either MUST be done now or should be done soon.
This is not true.

Old houses can be well maintained and have maintenance costs that are less than a modern house, or poorly maintained money pits. They are often (but not always) better built than modern houses. Our current old house, for example, was built when they were plundering the redwood forests, so it has redwood framing, which is much more resistant to termites than more recent construction. When we bought it, it was clearly an old house, but it had been carefully maintained, and the plumbing had been already upgraded to copper. In the 20 years we've owned it, it hasn't cost us any more than a newer house would have cost for the same time period.

The main thing is to hire a good inspector and find out what you're looking at and get an idea of what you're going to need to do.
totally agree with you.

Of the total we have spent so far, the single biggest hit has been the new boiler (approx. 7500 about 20% of total spent so far). Would have been the same or similar had the house been only 35 years old versus 118.

The next biggest cost has been the electrical upgrade to 200 amp plus correcting some wiring issues and bringing more convenience and safety for people and equipment. The 200 amp panel cost and labor would be much the same regardless the age of the house. Where we moved from many of the houses that were built in the 70s and 80s also only had 100 amp service. The wiring issues were an addition that maybe would not have been needed on the 1970s house. But adding more plugs, adding ground fault circuitry would be similar whether old house or 1970s. And of course the 1970s were the heyday for aluminum wiring.

Redoing the 3rd floor bath takes us to about 2/3rds of what we have spent. Regardless of age showers, tubs etc also wear out. Those three things would have cost roughly the same regardless of the age of the house.

Our old house was built during the heyday of deforestation of the UP of MI. We have some pine planking that is 16" wide.

OP--don't be afraid of an old house, just live in the house first, develop a few ideas/plans and enjoy.
adamthesmythe
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Re: Buy very old house without buyer agent

Post by adamthesmythe »

quantAndHold wrote: Mon Dec 18, 2017 3:38 pm
adamthesmythe wrote: Mon Dec 18, 2017 1:37 pm An old house always has expensive stuff that either MUST be done now or should be done soon.
This is not true.

Old houses can be well maintained and have maintenance costs that are less than a modern house, or poorly maintained money pits. They are often (but not always) better built than modern houses. Our current old house, for example, was built when they were plundering the redwood forests, so it has redwood framing, which is much more resistant to termites than more recent construction. When we bought it, it was clearly an old house, but it had been carefully maintained, and the plumbing had been already upgraded to copper. In the 20 years we've owned it, it hasn't cost us any more than a newer house would have cost for the same time period.

The main thing is to hire a good inspector and find out what you're looking at and get an idea of what you're going to need to do.
Well I have been there, done that, in two houses over 30 years.

OP wants to get into a house on a budget. I submit that an old house is not the way to go. Buy an old house because you want the architecture. Buy it because it's close to work. Buy it because it's in a great old neighborhood. Buy it because you have skills to maintain it yourself. But don't buy it because it will be cheap to own. Maybe you get lucky and you spend nothing for 5 years. Or maybe the furnace goes out in the first month and the central drain clogs at the same time. Owning an old house you need the flexibility to deal with stuff that happens. Hard to do that on a tight budget.
quantAndHold
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Re: Buy very old house without buyer agent

Post by quantAndHold »

adamthesmythe wrote: Mon Dec 18, 2017 6:16 pm
quantAndHold wrote: Mon Dec 18, 2017 3:38 pm
adamthesmythe wrote: Mon Dec 18, 2017 1:37 pm An old house always has expensive stuff that either MUST be done now or should be done soon.
This is not true.

Old houses can be well maintained and have maintenance costs that are less than a modern house, or poorly maintained money pits. They are often (but not always) better built than modern houses. Our current old house, for example, was built when they were plundering the redwood forests, so it has redwood framing, which is much more resistant to termites than more recent construction. When we bought it, it was clearly an old house, but it had been carefully maintained, and the plumbing had been already upgraded to copper. In the 20 years we've owned it, it hasn't cost us any more than a newer house would have cost for the same time period.

The main thing is to hire a good inspector and find out what you're looking at and get an idea of what you're going to need to do.
Well I have been there, done that, in two houses over 30 years.

OP wants to get into a house on a budget. I submit that an old house is not the way to go. Buy an old house because you want the architecture. Buy it because it's close to work. Buy it because it's in a great old neighborhood. Buy it because you have skills to maintain it yourself. But don't buy it because it will be cheap to own. Maybe you get lucky and you spend nothing for 5 years. Or maybe the furnace goes out in the first month and the central drain clogs at the same time. Owning an old house you need the flexibility to deal with stuff that happens. Hard to do that on a tight budget.
I would argue that no house is cheap to own, and with any house you need to budget for maintenance and repairs. If OP can’t budget for normal maintenance and repairs, then home ownership is probably not for them.

We’ve owned three different old houses over 30 years, sometimes more than one at a time. There has been nothing we ever had to do that was specifically because the house was 100 years old. It was all normal maintenance and repairs that would have to happen on any house. Roofs and water heaters need replacing on a regular basis no matter what the age of he house.

The most expensive houses I’ve ever seen were built in the 60’s, 70’s and 80’s. Aluminum wiring, plastic plumbing, and generally poor construction. Plumbing embedded in the slab, so that when the pipe started leaking, the whole house had to be repiped, and all of the carpeting replaced because of the flood.

I had to replace the kitchen sink in my 100 year old house this past spring. At 100 years, it was rusting out. Looking at the difference in construction quality between the two, I can guarantee that the new sink, which cost a pretty penny, will not last 100 years.

Most old houses have 3/4” hardwood floors that have been underneath carpeting for most of their lives. 3/4” hardwood can be refinished several times. If newer houses have hardwood, it’s 3/8”, which can only be refinished once. Or they have engineered floors, which can’t be refinished at all. Extrapolate that to the rest of the materials in the house. I’ll take the old one every time.
Yes, I’m really that pedantic.
mouses
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Re: Buy very old house without buyer agent

Post by mouses »

If I had a choice, I would always buy an old house. Nor only because they are beautiful but because they are much better built.

The list a few posts above of all the things that may need to be fixed is going overboard. I lived in a bungalow with knob and tube wiring for thirty years. The only thing I paid to have fixed in about the first five years was the sewer pipe needed replacing. Exterior and interior painting I did myself. I pulled up the ratty carpeting and found beautiful hardwood floors.

If you require that everything be shiny, an old house is not for you.
staythecourse
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Re: Buy very old house without buyer agent

Post by staythecourse »

Apologize if I am repeating above as I didn't read all the posts.

No problem buying anything without an agent, but make sure you have a RE attorney AND home inspection. For both it is better to find one on your one as their allegiance will be to you then instead of the usual trying to make the buyers agent happy to get repeat business.

The interesting thing is doing the transaction without a buyer's agent if you are trying to reduce the sales price. It is a bit complicated if you are trying to get a better deal. That doesn't always work out. The listing agent has a contract with the seller in advance. Somewhere in there it mentions what the situation is with a buyer without an agent. Most of the time, I think the seller agent gets BOTH halves of the commission if there is no buyers agent so no incentive to lower the price any further. The problem is there is NO WAY of knowing what arrangement has been decided in advance if you come without a buyers agent. A couple of options still available: 1. Drop a letter in the seller's mailbox. Tell them you want the house for listing price- 1/2 of the commission (no buyers agent) (the seller gets the other 1/2 by getting rid of the sellers agent). Just tell them to wait out the listing agent contract of having the property. Leave your digits and see if they bite. 2. Go on trulia or some other site and let agents know that you have a property, all the work is done, and you will hire whoever will do it for the least commission and the rest goes to you, or 3. Hire redfin who will split the commission in part based on purchase price.

Good luck.
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