Home Buying in Chicago>Question Details

Katch, Home Buyer in Chicago, IL

I had an inspection done on a home I'm considering purchasing but there are some major concerns for me, One is the motar is badly worn and need

Asked by Katch, Chicago, IL Tue Mar 15, 2011

fixed. The inspector said the motar deterioration need to addressed immediately and seepage in the basement, electrical box is outdated, railing code violation (too low), chimney deteriation and bricks fail apart lieing on roof, stove has brass gas lines which is a code violation, and the only things seller is addressing is chimney, railing, putting smoke and carbon monoxide detector not considering seepage or major mortar deterioration. I would like them to addres the seepage and mortar those are major concerns is that fair to request.

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Whay did the Illinois property disclosure have to say relative to these defects leaking in the basement? It is part of the contract package required by state law. If this is bank owned REO they might need to fix for occuoancy. Short sale, seller doesn't have the money or cares. If there is recurrent seepage and it is not dosclosed on property disclosure that is called fraud. Unless the sellerr wasn't the occupant the previous 12 months. Still if there is seepage that should be on the disclosure after the seller is notified by a licensed home inspector. I am not a lawyer, but do think they need to modify the disclosure to reflect your home inspection if you do not get the deal together.
1 vote Thank Flag Link Thu Mar 17, 2011
Sounds like a scary home inspection. You do need to have attorney write the deficiencies to the seller attorney and make the case that several are matters of safety and habitability and Illinois has a strict property disclosure requirement. Basically, if the seller refuses to fix these items, they will need to disclose those defects to the next possible buyer. So why not just work with you on closing credit if you are willing to do the work. If this is a short sale, there is no money to repair home. It all comes down to cost and if the seller wants to get it done. If deal does fall apart, you can call the city inspector and report the property for its violations.
1 vote Thank Flag Link Tue Mar 15, 2011

If you paid for this inspection PRIOR to having the home under contract, you should be armed with knowledge to make a lower offer, based on this work being finished. You could then do an FHA 203k inspection, to review HUD minimum property standards as well, and IF you find more wrong with the home, GO BACK to the seller to lower the price even again, based on the results.

If you are under contract, make sure you hit the seller with these BEFORE your inspection contingency expires.

Would be glad to help you with your renovation financing... ;)

Web Reference: http://www.203kworld.com
0 votes Thank Flag Link Tue Apr 26, 2011
It is fair to request anything that you find in the home inspection. However, that does not mean the seller will address them. If you feel you are getting a fair price despite what the inspection found, and are comfortable making the repairs yourself, then this may still be the house for you. If you are not comfortable with the inspection and the sellers are not willing to work with you, then I would suggest moving on. There are plenty of home on the market and I am sure will be able to find one that works better for you. Best of luck!
0 votes Thank Flag Link Mon Apr 4, 2011

Before you even consider a 203K loan, you need to have your Realtor pull ALL comparable sales of similar properties that have sold in the last 3 to 6 months( both before the rehab and after the rehab properties.) Once you have that information you need to get an estimate of the repairs. If the purchase price + the repair cost, + closing costs and the 20% contingency reserve ( for cost overuns) is equal to 96.5% of the after repair value then you should make your offer. If you do not follow these steps, you may be wasting your time on a home will not appraise out to the value you will need to get the 203K Loan. You can contact me for any other information you may need.
0 votes Thank Flag Link Sat Apr 2, 2011
Everything is fair to request, but that doesn't mean the seller has to fix them. It's up to you to decide whether it's still worth purchasing knowing what you now know. The seller is also now legally required to disclose these material defects to any future buyers, so that should have a bearing on the seller's decision to make these repairs, although it's pretty hard to police this law.
0 votes Thank Flag Link Thu Mar 31, 2011
Sounds like you have submitted these issues to the seller and they are not going to address them. You have to make a decision as to whether these are issues that you will take on or will you look for another place.
0 votes Thank Flag Link Thu Mar 31, 2011
Dear Katch,

As previously said, everything can be negotiated. The primary purpose of an inspection is to assess whether there are some major issues with the property that were not originally disclosed or apparent. If the property was listed for sale AS IS- then the seller cannot be expected to complete these repairs. In many cases if these issues haven't already been addressed by the seller, he may not want to do address them. BUT then that should be reflected in the asking or final sales price.

It is best for you to consider the total costs including $ & time necessary to complete the project on your own regardless of what kind of deal you are able to strike with the seller. If he agrees to fix the seepage and mortar GREAT but be sure to keep a close eye on what's happening because in the end YOU will own it.
0 votes Thank Flag Link Thu Mar 17, 2011
Good afternoon, Katch.

Thank you for the question you posted about post-inspection requests.
Whether or not it is “fair” to request that the current owner/seller of the property you are under contract to buy make repairs to the property depends on the terms to which you and the seller agreed in the written purchase agreement.
Did you agree to an “as is” purchase?

Best bet is to discuss this with your real estate attorney – and if you do NOT have a real estate attorney assisting you with your purchase, get one NOW.

Good luck to you!
Web Reference: http://www.dreamtown.com
0 votes Thank Flag Link Wed Mar 16, 2011
The 203k rehabilitation Loan would be the solution for you. This allows for any rehabilitation that you need done to the home. You would be able to fix mandatory items and also desired repairs or updates to the home. Please feel free to check out my website for more information or e-mail me for a 2 page write up that I can provide.

Christine DePaepe
Senior Mortgage Consultant
Wintrust Mortgage
1333 N. Kingsbury, Ste, 201, Chicago, IL 60642

Office: 312-462-7715 | Cell: 773-848-4144 | eFax: 312-873-3818
0 votes Thank Flag Link Tue Mar 15, 2011
When it comes to inspections, you can ask them to fix all the materials you are worried about. Have your attorney show them the laundry list that the inspector came back with. Then have hi say instead of asking for all these things, we would just like these two major ones taken care of. If they fix them, you can feel comfortable. If they dont then you can either walk from the deal, or live with having to do the work yourself. Best of luck!

Matt Laricy
Americorp Real Estate
Brokers Associate, e-PRO
0 votes Thank Flag Link Tue Mar 15, 2011
Anything is negotiate, but often agreement cannot be made. If you do not feel comfortable with the issues, then just tell your attorney and get out of the deal. If you got a great price then perhaps it's worth buying and then fixing the problems yourself. Your inspector should be able to give you an approximate cost to repair.
0 votes Thank Flag Link Tue Mar 15, 2011
Hi Katch,

Sounds like a typical home purchase in an older neighborhood. There's no reason for you to be in this position. The solution to this simple problem is an FHA Rehabilitation Loan or 203(k). This type of financing lets you purchase the home "with" the funds to repair it and when you do this you even get a professional project manager to organize and manage the construction so there's no hassle. As a licensed FHA Consultant myself, I see these every week so I know it works. Talk to your Realtor and Lender to help you change directions. If you have any questions about the program contact me for more details, I'd be happy to help. The Rehabilitation Loan has really become the new tool of many typical homebuyers who have now turned their attentions away from new housing in considering the 203k as the best way to maintain their lifestyle in established neighborhoods
0 votes Thank Flag Link Tue Mar 15, 2011
Mortar deterioration is a pretty broad term. Is the mortar deteriorated on a particular side of the building or in the utility room, or is it widespread over the entire siding of the house? Get a good mason to give you an estimate of what it will take to tuck-point the areas of concern.

As to seepage, this is pretty common throughout Chicago in the older houses w/o sump pumps. Is the seepage widespread or confined to one area of the basement? Be careful of the water proofing companies, they're looking for the big expensive fix, when quite often grading and downspout positioning can cure the problem.

If you love the house, these problems are not insurmountable and should be considered in the overall picture including price, location and comparable properties.
0 votes Thank Flag Link Tue Mar 15, 2011
As long as you are within the inspection contingency period, approach the owner (through their agent if the property is listed) with the items you would like to have repaired or addressed prior to you taking possession of the home. Once you know what the owner will take care of you can decide whether you want to proceed or pass.
Web Reference: http://www.321property.com
0 votes Thank Flag Link Tue Mar 15, 2011
Depending on the price and the fairness of the Seller you pose an interesting question. The SAFETY issues should all be addressed(Gas Lines,Railings,Smoke Alarms,CO2). In many of the areas I cover the Town does an interior Municiapal Search for violations like this and until addressed there would be no closing. Some of your other problems are subjective(electrical panel,Mortar) for one. This may reflect the price you paid according to the Seller. Water seepage could be as simple as leaders not far enough away from the house, backed up gutters, etc.In most of these area you may try to get a general credit if that works for you. Get estimates for the work if needed as any home generally has a few issues and if you like or love this home, make it work with the help of your Agent. Best of Luck!
0 votes Thank Flag Link Tue Mar 15, 2011
Many properties to choose from if seller is unwilling to do needed repairs, move on and let them look for another buyer while you find another home.
0 votes Thank Flag Link Tue Mar 15, 2011
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