House #4: Initial Bids

October 16, 2008 · 0 comments

As I mentioned a few days ago, the bank compromised on selling The Yellow Stain House for a reasonable discount. Based on the fact that the foundation was cracked, the plumbing needed to be replaced, and the roof framing was structurally inadequate, they offered a $14K discount on the originally agreed-upon purchase price. I thought that $14K was reasonable, and should cover my additional expenditures, and after getting quotes on the foundation, plumbing, and roof framing, I now know for sure.

The foundation work was my biggest concern. Foundation costs can run into the tens of thousands of dollars in some cases, though I was fairly confident our problem wasn’t that bad. I was hoping the cost would come in between $3-6K, and I was pretty close. To reinforce the one bad foundation wall, my preferred contractor (a very reputable foundation repair company that provides lifetime warranty on their work) quoted me $2800. They also noted (as did my inspector), some minor foundation issues on a second wall; because I plan to finish off that basement area, I decided not to take any chances, and asked for a quote for the second wall as well. After some negotiation, we got the cost of fixing both walls to just under $5000. I could have probably gotten away with spending half that (only doing one wall), but I need to be proud of the houses I sell, so that wasn’t really an option.

As for the plumbing, again I decided to get a quote from one of the most recommended contractors in the area. They have done a lot of polybutylene replacement, and after finding out that I was planning to buy a lot of houses built in this time frame (the 10 years when polybutylene was most common), they gave me a very decent price. Basically, to re-pipe the entire house — including the 100 ft underground run from the meter to the basement — I was quoted just under $4000. I think I may be able to get a better price going with my GC’s plumber or another freelance plumber, so I’ll continue to shop around. But, the $4000 is a good baseline.

Lastly, my GC (the one I’m using on The Second Chance House and will likely use on The Yellow Stain House) said he could do the roof work (and the rest of the minor issues that the inspector pointed out) for about $1000, which was about what I expected.

In total, those three issues will cost somewhere around $10,000, meaning I made $4000 on the renegotiation with the bank. Of course, the foundation issue could impact my ability to sell the property as quickly as I would like, and who knows if fixing any of these problems will uncover additional issues that need to be addressed (I don’t suspect so), so for now I’ll hold off on celebrating too much around that $4000…

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