I mentioned yesterday that based on the inspection report I received on The Yellow Stain House, I was planning to ask for a price reduction from the seller (before signing the contract). Before deciding on how much of a reduction to ask for, I had a structural engineer visit the house on Friday to give me a report on the extent of the foundation damage, the recommended remediation plan, and an idea of how much the repair work would cost if I were to have it done. As he pointed out, the issue is that there is a long (about 12 feet) horizontal crack in one of the cinderblock foundation walls, indicating that there has been excess pressure from the other side of the wall; this excess pressure has actually started pushing the wall in towards the interior of the house, and if you look closely, you can see a slight bulge in the wall around where the crack is.
The likely culprit is poor drainage on the house on the outside of that wall. With the ground sloping in towards the house, water collects against the side of the house, seeps into the soil, and the water-soaked soil causes stress on the foundation wall beneath the ground. Besides fixing the problem (sloping the soil away from the house and adding some drainage pipes around the foundation), there are two common ways to fix the already damaged foundation wall. Historically, a foundation company would drill supporting brackets into the wall to ensure that there is no further shifting; more recently, it’s become come to actually epoxy strips of Kevlar material to the wall to keep it from any further movement (sounds crazy, but apparently it works like nothing else).
Anyway, the engineer suggested that the fix would cost anywhere from $4-8K, plus the extra work on the outside of the house to keep the issue from reoccurring.
I also did some more research on polybutylene plumbing (the pipes currently in this house, and that have already caused some problems), and found that many experts recommend replacing all polybutylene with PVC or copper to keep the inevitable rupture from occurring (or reoccurring). There have been many class-action suits against the companies who have manufactured polybutylene, and all evidence indicates that houses with polybutylene plumbing are harder to resell. Based on that, I’ve decided that if I get this house, I would replace all existing plumbing with PVC or copper. This would likely cost about $4K.
Lastly, the inspector yesterday found several other issues relating to roof framing, exterior wood rot, and other minor (but potentially costly) issues. All told, the additional work above and beyond what I originally expected was probably about $2K.
Between the foundation, the plumbing, and the other issues, my additional, unexpected out-of-pocket on this house would be around $10-14K. Knowing that the bank would most likely counter-offer any request I made for a price reduction, I decided to ask more than I needed — $20,000. I would likely settle for as little as $16K in price reduction, but given that there could be other unexpected costs associated with these issues, I certainly wouldn’t go lower than that.
We’ll see what the seller has to say to my new offer…