Home Buying in 60601>Question Details

Dan, Home Buyer in 60601

Is this serious problem?

Asked by Dan, 60601 Mon Mar 2, 2009

I am interested in two-years old house which is REO in Chicago area. However, there was some water leakage in the based when I looked at on Saturday ( we got a big rain on last Thursday and Friday here). My buyer agent told it could be fixed for about $400-$500 from inside or $above $1000 from outside.

Since this house is sold 'as-is', is it a serious problem?

Does this issue indicate the qualifty of the whole house is questioable?

BTW, this house was original sold for more than 1.1Million. So, it should have a high quality.

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Answers

21
BEST ANSWER
Hello Dan,

There is a lot of good advice here already. I'll provide you the from a Professional Real Estate Inspector. First we will start with your last statement:

"I did want to hire some inspector to take a look of the house first before I submit my offer. However, my buyer agent suggest not to do so. He even said the bank might not like (or allow) us to have inspection first before we present an offer. Is this true?"

It does not really matter what the bank likes, you're paying for the home. If the bank does not allow an inspection (unusual case) then I personally would walk away from that home. They have nothing to lose allowing an inspection (house is sold as is anyhow) and everything to gain (you are sure you want to buy it). As for the RE Agent, ask them to provide you a written and signed estimate for the repairs before you make an offer. I would wager they are not about to do that!

Now onto your original question. The extent of this issue would be difficult to assess without actually viewing the symptoms and area affected. I would honestly start with a whole house inspection by a Professional Inspector. This will generally run you much less than gathering all of the various specialty people for inspections. You may be surprised if the Inspector finds sufficient other issues you just don't want to deal with.

Don't be surprised if the Inspector recommends further investigation of the foundation by a specialty trade or even Professional Engineer. Follow the Inspectors advice on any further specialty inspections. Also keep in mind that even a Professional Engineer can only provide you their opinion from just a visual inspection of the issue. Any further definitive answers could potentially require soil hydrology testing, excavation, etc., etc. Simple cracks in a basement foundation can be easily repaired and the repair can last virtually forever if performed properly. More extensive cracking could signify more in depth and more costly issues.

Unfortunately the original price of a home is not really an indicator of its quality. That's not to say your home may not be of high quality. Before you make a decision on the remainder of the home, based on the foundation, have it thoroughly investigated.

Good luck!

Emmanuel J. Scanlan
PS Inspection & Property Services LLC
http://www.psinspection.com
214-418-4366 (cell)
TREC License # 7593
International Code Council, Residential Combination Inspector #5247015-R5 (Electrical, Mechanical, Plumbing and Building)
Texas Residential Construction Commission, Third Party Warranty Inspector #1593
Texas Residential Construction Commission, Inspector, County Inspection Program
Texas Department Of Insurance, VIP Inspector # 08507061016
Hayman Residential Engineering Services, Field Technician
CMC Energy - Certified Energy Auditor

Knowledge is power, but sharing knowledge brings peace!!
Web Reference: http://www.psinspection.com
1 vote Thank Flag Link Mon Mar 2, 2009
Dan, whether the bank likes it or not... is irrelevant. I would not purchase a home, as-is, or under full warranty, without a home inspection.

I don't know where people are getting their numbers of $500, and $1,000 without any idea of how large a foundation and if there are cracks, or if this is hydrostatic leakage.

Most inspectors do not like to quote pricing... they simply identify problems... if the basement has true water issues, you may have to hire a structural engineer, or an all purpose general contractor to give you estimates for proper repair and potential systems to prevent further water incursion.

And I have no idea why living in Florida would render someone incapable of offering advice such as "I recommend an inspection, and "you may want to consider an inspection contingency"... both excellent suggestions, in my opinion
2 votes Thank Flag Link Mon Mar 2, 2009
Alan May, Real Estate Pro in Evanston, IL
MVP'08
Contact
Thanks again for all of your helpful replies. It seems it is not worth the risk to present an offer without inspection first. Can anybody recommend a good inspector in west suburb of Chicago?

Also, here is a photo of the water leakage.

http://tinyurl.com/basement-issue

Thanks.
1 vote Thank Flag Link Mon Mar 2, 2009
Scott E.,

Re: your comment

"All I was trying to say was that he should have a concrete crack specialist/waterproofing professional look at the crack as all a home inspector is going to do is suggest one anyway as just stated by a home inspector."

If you read my comments I specifically said "Don't be surprised if the Inspector recommends further investigation". This is quite different from stating "is going to do". Of course that is a very common misinterpretation in grammar.

As for the issue of experience with basements, I live in the great state of Texas and many homes have no basements here because of the high plasticity index of the soils. Does that mean I too have no experience with basements, as you expect Trey does not due to high water tables in Florida? I'll make the answer easy for you and provide a hint. I'm a Damn Yankee Transplant here in Texas. Could Trey also be a transplant? Hope this helps?

Emmanuel J. Scanlan
PS Inspection & Property Services LLC
http://www.psinspection.com
214-418-4366 (cell)
TREC License # 7593
International Code Council, Residential Combination Inspector #5247015-R5 (Electrical, Mechanical, Plumbing and Building)
Texas Residential Construction Commission, Third Party Warranty Inspector #1593
Texas Residential Construction Commission, Inspector, County Inspection Program
Texas Department Of Insurance, VIP Inspector # 08507061016
Hayman Residential Engineering Services, Field Technician
CMC Energy - Certified Energy Auditor

Knowledge is power, but sharing knowledge brings peace!!
Web Reference: http://www.psinspection.com
1 vote Thank Flag Link Mon Mar 2, 2009
Thanks for all of the valuable replies here. I really appreciate it. I did want to hire some inspector to take a look of the house first before I submit my offer. However, my buyer agent suggest not to do so. He even said the bank might not like (or allow) us to have inspection first before we present an offer. Is this true?
1 vote Thank Flag Link Mon Mar 2, 2009
Hi Dan-

They gave you great advice below. Here is my .02., besides a home inspector taking a look, you could have a water proofing company take a look at the basement at the same time you have an inspection. This way you will know the problem (is it drainage, foundation cracks, etc.) and the costs up front. The 2 I have used are in the Chicagoland area and listed below.
Perma Seal http://www.permaseal.net
Dura Shield http://www.durashieldcompanies.com

I hope this helps! Good Luck!
1 vote Thank Flag Link Mon Mar 2, 2009
Dan,
I would recommend a home inspection. You can have one done before you put in an offer so you will know of any problems. I don't know what the cost is in the Chicago area for a home inspection but you could save yourself a considerable amount in the long run. You can also present an offer with an inspection contingency so that if the inspection shows repairs needed over a certain amount you can withdraw from the contract.

Good luck!
Trey Miller
1 vote Thank Flag Link Mon Mar 2, 2009
Hey Dan,

It's always better to be safe than sorry - a licensed inspector is the best individual for an accurate diagnosis of the issue.

Homes sold as-is should not always raise a red flag; just do your due-diligence and see what you find. The $400 inspection might uncover a $2000 problem or just a $200 but its best to know what you are getting yourself into before investing too much time and money.

Also, if an inspector suspects a greater issue they have connections to other skilled professionals. Just take advantage of your resources as this is a huge investment.
0 votes Thank Flag Link Tue Oct 22, 2013
Your realtor seems to have a lot of guts giving you those prices. Since you don't mention, probably since you don't know, where the water is coming from giving a real answer is a bit difficult.
If this is an interior water leak from a bad pipe, $400-$500 is definitely possible if all you have to hire is a plumber. However as others have mentioned mold could be an issue. Proper removal and cleaning could be fairly easy or extensive. It is important to understand that when you see mold on the exterior of a wall surface, there is typically substantially more inside the walls. Wall cavities tend to act as incubators. Since it hasn't been too warm too much yet, interior wall growth might not be too bad so far.
If however this is water intrusion from the exterior, your realtors pricing may be way off. I;ll go through a few of the possibilities.
A 2 year old house in Chicago is going to have a cement foundation. The 'crack fixing companies' typically charge $300-$400 per crack from my experience. A bit less per crack if multiple. That service basically consists of injecting 'epoxy' into the crack(s) to seal it.
If the issue is a bad seal around an overhead sewer exit, you could get a contractor or plumber to seal it relatively cheap. There are other wall penetrations that could also be the culprit.
If the water intrusion condition is more extensive then costs will obviously be higher.
One of the problems I often run into in these situations is that people forget about all the secondary costs associated with such repairs. There tend to numerous costs involved in fixing water intrusion problems.
- Fix the leak
- Get rid of mold contaminated drywall, insulation, trims, flooring and possible framing
- Re-install the removed items and finish the interior space back to what it needs to be
- If this is an issue of too much water being funneled to the foundation walls then there will likely be other costs. Such costs can include improving or extending downspouts or re-grading the ground along the walls.
Whether the agent or Bank like an inspection or not is irrelevant. I recently did an inspection where the agent and seller put up as many roadblocks as possible to avoid an inspection. Once the buyer insisted the deal was dead without an inspection and I conducted one, it became very obvious why they wanted to avoid it.
There is a bit of a misconception about getting an inspection on REO's. Some like to say it isn't worth it because the Bank won't re-negotiate, this isn't true.
The real reason to get an inspection on an REO or any property is to know the true condition of the property and to know what the POST PURCHASE costs will be.
Will this particular home purchase still be feasible if post purchase repairs costs are $500, $1000 or $20,000
Answering this question makes the difference between buying a house you will be happy with or a house you wish you hadn't bought. Feel free to give me a call.
Web Reference: http://www.aic-chicago.com
0 votes Thank Flag Link Sat May 7, 2011
From an Architect's stand point with limited knowledge of the problem, (Please hire a home inspector!!) it seems like this is a problem which will take more than $1000 to fix! Its a drain tile problem! check out the link!
0 votes Thank Flag Link Wed Mar 4, 2009
Hi Dan,

Over the past few years I have had the pleasure of conversing with these individuals servicing the Chicago area. Although I have not met them in person I have grown to trust what they say. This is a good start in looking for an Inspector. If you are not comfortable with them they will not hesitate to help you find an Inspector you are comfortable with. Being comfortable with your Inspector is a major concern for those of us in the business who care to perform for the client.

Robert Elliot - Chicago Property Inspections
http://www.chicagopropertyinspection.com/

William Decker - Decker Home Services LLC
http://www.deckerhomeservices.com/

Looking at the picture you provided, I do not see any staining on the wall which would suggest leaking from somewhere on the wall above floor level. You can see how the water is wicking up the wall and not staining from above and down the wall. This would infer that the condition is a rising groundwater issue.

I've actually experienced this condition in my Yankee days. Basically what happens is the ground under and around your vertical walls are prepared with a drain tile configuration after they excavate the basement area. The vertical walls are poured and then the bottom slab is poured. If your area is expected to have higher ground water conditions they will place a sump pit generally in a corner of the basement and equip it with a pump. The drain tile will be configured to channel the water to the sump pit. A sump pump will then pump the water out of the pit and away from the home. If the basement is large enough there may be more than one sump pit and pump.

It would be hard to tell through just the one picture but a good Inspector should be able to tell you what potentially may need to be done to correct this. If not then they will refer you to the appropriate specialist for more review and formulation of a plan of correction.

Good luck on the home!

Emmanuel J. Scanlan
PS Inspection & Property Services LLC
http://www.psinspection.com
214-418-4366 (cell)
TREC License # 7593
International Code Council, Residential Combination Inspector #5247015-R5 (Electrical, Mechanical, Plumbing and Building)
Texas Residential Construction Commission, Third Party Warranty Inspector #1593
Texas Residential Construction Commission, Inspector, County Inspection Program
Texas Department Of Insurance, VIP Inspector # 08507061016
Hayman Residential Engineering Services, Field Technician
CMC Energy - Certified Energy Auditor

Knowledge is power, but sharing knowledge brings peace!!
Web Reference: http://www.psinspection.com
0 votes Thank Flag Link Tue Mar 3, 2009
Hi Dan,

I'm late replying but thought I could For any home being purchased, an inspection is mandatory for your safety. If a seller/bank refuses inspection, that is a clear indication of issues which likely need significant attention. You can go ahead and place the offer contigent upon satisfactory inspection, appraisal, mortgage...or any other contigencies your legal counsel would advise. Getting an inspection PRIOR to a fully executed purchase agreement on a bank owned FC is not impossible, just a bit more tedious. Some REO transactions may not allow it at all, some will. The inspection is usually performed after acceptance of the offer. If your attorney recommends submission of an offer with an inspection contingency (meaning, you will have an inspection performed AFTER the offer is accepted but are protected regardless), then place your offer. Don't miss out on a fantastic deal due to fear of the unknown.

After the inspection, you may have to get a few quotes from local tradesmen to determine the cost of repairs for the water issue. If the cost is reasonable, you may have a deal. If there are significant issues bringing costs up to an unreasonable level, you can then walk away and not worry about it. The earnest funds were protected by the inspection contingency right? Hope I have helped and good luck.
0 votes Thank Flag Link Tue Mar 3, 2009
Scott,

Although you directed your answer to Trey, I read it to apply to any and all out of state posters. In reality, poor quality answers and great answers are not dictated by geography, but competency and common sense. I can find plenty of "stupid" in my back yard; local does not assure good advice. I also know of a lot of really great talent in my back yard. Personally, I welcome any and all great posts in my area, regardless of the poster's location. If it's great advice, it's welcome. Specific stats on local market performance needs to come from credible sources that have access to the data.

Thanks to a great best answer from Texas! Honorable mention to a few other posters, including, but not limited to Alan May.

Just listed David Knox seminar last Friday. He just returned from teaching pricing strategy in South Africa.

Dan,

Can you present an offer that contains an inspection contingency? This would allow to you negotiate your price and terms. If accepted, you could then proceed with the costs of inspections. Most banks will approve a contract with these terms. Some banks will state the inspections are for "informational purposes only" and will not renegotiate for credits. Other banks will still negotiate after inspections.

Water problems such as depicted in your photo can be fixed for $500 or $5000 or more. None of us can tell you. Even a general inspector may not tell you, as already mentioned on this thread.

Moreover, you need to have an inspection to uncover any hidden defects. The water problem could be an easy fix for $500, but a different hidden defect may be lurking with a $10,000 repair tag. That is not reflective of this property, it can apply to any property....anywhere. Inspections are important.

Best of luck to you.

Deborah Madey - Broker
Peninsula Realty Group
Licensed in FL (no basements)
Licensed in NJ (many basements)
0 votes Thank Flag Link Mon Mar 2, 2009
Deborah Madey, Real Estate Pro in Brick, NJ
MVP'08
Contact
Emmanuel, the answer wasn't directed towards you.
0 votes Thank Flag Link Mon Mar 2, 2009
Alan,

There was no mention about a home inspection or the lack of one in his question. The question was about water leaking into the basement. You should ALWAYS hire a home inspector and I can't believe a Realtor would advise against that. All I was trying to say was that he should have a concrete crack specialist/waterproofing professional look at the crack as all a home inspector is going to do is suggest one anyway as just stated by a home inspector.

As someone who has also lived in Florida, they do not have basements there so he most likely does not have any experience dealing with this problem.
0 votes Thank Flag Link Mon Mar 2, 2009
No offense Trey, but you don't have basements there in FL so I don't think you are qualified to be answering this question.

Dan,

I have a similar problem with my home and I would recommend bringing in a concrete crack specialist. I've spoken to these two companies and they are very reasonable and know what they are doing, http://www.atlasrestoration.com and http://www.quickstructuralrepair.net. Both companies offer a lifetime warranty, which is obviously only good for as long as they're in business, but Atlas Restoration has been around for over 25 years and Quick has been around for I believe 5 years.

Please know this is not uncommon and the prices you were told were about right, $500 for the interior and about $800-1000 should it need to be fixed from the exterior.

Scott Epstein
Broker/Owner
IllinoisRealEstate.com
0 votes Thank Flag Link Mon Mar 2, 2009
Hi Dan,

Absolutely hire a property inspector. Your REALTOR, may have experience repairing leaks in basements, but if you want to know for sure, have a professional inspector inspect the entire home. It's 99% likely since this is an REO property, the bank will have no interest in repairing the home, so I strongly recommend having a licensed contractor or inspector look at first before presenting an offer. The bank will not renegotiate a sales price after the fact, however with an inspection contingency you will be able to rescind your offer and submit a new one. But that's a lot of extra time, when most likely this is one of several properties sitting in a giant stack of paperwork on someone's desk at a currently under staffed bank out of state somewhere.

Best of luck.

Jeremy
0 votes Thank Flag Link Mon Mar 2, 2009
Dan,
It could be a serious problem, or it could not be. The fact is, you dont know until you hire someone to take a look at it. You could hire an inspector to take a look at the house, or if you have a friend who does work like this, have him take a look at it.
Regarding is the quality of the house questionable? Once again, you dont know until you have someone look at it. Its not uncommon for some houses in Chicago to get water in them. It doesnt mean the whole house it bad. I would definitley call someone to take a look at it though. Good luck!

Matt Laricy
Americorp Real Estate
708-250-2696
mlamericorp@aol.com
0 votes Thank Flag Link Mon Mar 2, 2009
The original sales price has nothing to do with quality, bring in an inspector and contractor and let them decide if its a big deal. This assumes you have time to do that before someone else buys the home. You could put in an offer to buy yourself time, then bring in the professionals (make sure your attorney crafts a way out if you don't like the opinions). As a buyer agent myself, I would never trust dollar amounts to an agent, let the pros give you amounts. You may want a full mold test done also (I had one done when I bought my REO just to be safe).

Good luck!
Web Reference: http://www.1sthomegroup.com
0 votes Thank Flag Link Mon Mar 2, 2009
Dan,
Curious how your agent was able to come up with a figure. But since he has ask him if he's comfortable footing the bill if the cost is greater than the $500 he has posited. The only way to figure out if this is a significant issue is to hire a professional home inspector. My advice to you is to not turn to your agent for a referral but either go online or ask folks you know who they have used.

Good luck!

Thomas McCarey
@properties with The Real Estate Lounge Chicago
Licensed Real Estate Salesperson in Illinois
Certified Negotiation Expert
Luxury Home Marketing Specialist
Accredited Buyers Representative
0 votes Thank Flag Link Mon Mar 2, 2009
I have been able to go back to the bank and renegotiate a deal that then had a problem. Get a quote to fix it and ask for a credit.
Web Reference: http://www.CONDOChicago.com
0 votes Thank Flag Link Mon Mar 2, 2009
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