Thinking of Buying or Selling Privately? This story might cause you to think twice:
I know a very sweet couple who are kicking themselves for taking this route. A few years ago, they were in the midst of a very stressful family situation that was costing them thousands of dollars, and through no fault of their own, they were forced to downsize and buy a less expensive house in order to cover the unexpected expenses with which they were faced. We haven't all been in situations like these folks, but I have and I can tell you from experience that it's the type of thing that shakes you to the core.
The last thing you feel like doing at a time like this is meeting a Realtor. The thought of it can be overwhelming, and it can be a little too "cold" or "businessy", and when you are forced to sell a home that you love, it's really hard to think clearly. All you really want at a time like this is cry on the shoulder of a friend who will tell you not to worry and that everything is going to be alright. It's at this moment in time that you especially need a professional on your side who will be understanding about your situation and ensure that you don't make a tough situation even worse.
These folks felt like they were at the right place at the right time when they were introduced to a property that was being sold privately. A cute and cozy home awaited them, and even though they had to let go of a much larger place, they were pleased to see that this property was decorated well and met all of their needs. The bonus was the large basement had been completely renovated.
When asked about the updates, the sellers shared that the electrical had all been replaced, and they even had the paperwork to prove it. A file full of receipts, and even an ESA (Electrical Safety Authority) certificate that they could show to their insurance company. But, maybe the questions were not specific enough and maybe the answers weren't either. Still, the buyers felt assured that they knew enough about the house and they didn't hesitate to move forward with an offer, and they did so without getting the 80-year-old home inspected.
I am not saying that the sellers were being untruthful or withholding any information, but it is very important to know specifically what to ask. And, even after hearing the answers, it is important to follow it up with a home inspection. It's the best $500 a buyer can spend because it can save them thousands in the long run!
So, these nice buyers bought the house and had no problems with it the whole time they lived there...and then things changed for them when they switched hats and became the sellers. They put the house on the market using the services of a Realtor. The house showed very well and it brought in multiple offers. The person who ended up purchasing the home hired a home inspector who found that it was full of the old knob and tube wiring.
Needless to say, the sellers felt sick because they would never deceive anyone. They were also sick because they felt they had either been completely snowed by the buyers or they had just been naive. Either way, it was costing them. Had they gotten a home inspection when they bought the house, they would have either purchased the house for less or would have found another one that was more up-to-date. And if they had purchased the house, they would have addressed the electrical issue upfront and would have avoided the unpleasant surprise they got in the 11th hour, which cost them thousands of dollars because they discounted the purchase price so the sale didn't fall through...not to mention the stress they could have avoided.
Their response to all of this was "Lesson learned. We'll know better next time."
Insurance companies these days don't want to touch knob and tube wiring with a ten foot pole, and the average cost to remove it is $10,000. It's not that knob and tube wiring in and of itself is that dangerous, but when it was first introduced people didn't live the same way they do now. In the 1930's, people used ice boxes; instead of over-sized refrigerators. The might have had a small black and white TV, but nowadays, people dedicate an entire room or at least an entire wall for their "entertainment centre" and have loads of components that need to be plugged into the wall.
The electrician from the above story said that most people would have thought this house did not have knob and tube wiring because from the looks of things, it was a very clean, well finished home and the electrical service had been updated from 60 to 100 amps, and the fuses were replaced by breakers. Every sign that the electrical had been completely updated was there and the regular places a person would look for the original knob and tube wiring had been covered by drywall.
Even after all of this, though, I still believe that most people have good intentions, it's just that they are often misinformed or ignorant about what questions to ask or what to look for. That's when a good Realtor can make a world of difference. It wasn't so much the electrical that was the problem, it's that because the house was sold without a Realtor, material facts were not disclosed. Some responsibility rests on the seller, some on the buyer, but when no Realtor is involved, who is going to ensure that everyone is on the same page? And a Realtor is held to a higher standard with greater accountability and regulations in place, and let's face it, they have a lot more to lose for not being forthright.
Lesson to learn for you? Work with a Realtor! More specifically, hire Julie D. Martin. She not only has the mind for this business, but the heart to go along with it. I'll make this a little more personal and stop talking in third person. I really do care, and when I write up offers for my buyers, I not only highly recommend that they have the home inspected, I make sure that I am present during the entire inspection. I can recommend good through home inspectors, as well as good tradespeople to offer quotes should there be anything that comes back on the report that needs to be looked after. This is one of the many benefits of working with an agent that makes you feel right at home.