how do I buy a house that is not up to code (knob and tube wiring)?

Asked by zabbott, Philadelphia, PA Mon Aug 1, 2011

I'm looking at a house with knob and tube wiring. It is my understanding that it's difficult (or impossible?) to get homeowners insurance with this outdated electric and that I cant get a mortgage without homeowners insurance. I've budgeted for the repairs in evaluating whether I can afford the house and would immediately make the improvements. How would I be able to purchase the house?

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hayleytomazic, Agent, Webster Groves, MO
Mon Aug 1, 2011
Certain lenders will allow you to purchase a home and put money in escrow at closing to make repairs that are necessary to bring it up to code. U.S. Bank, for example, offers a streamline Rehab Loan in which you can put funds in escrow at closing to make necessary repairs. Also, there is a chance you will find an insurance company that will insure your home with knob and tube. I have a small amount of knob and tube wiring in my home and was able to get insurance through the previous owner's insurance company.
0 votes
Mack McCoy, Agent, Seattle, WA
Mon Aug 1, 2011
Old houses have old systems, but that doesn't mean that they aren't safe.

First, call insurance companies and brokers and find out what their surcharge is.
Second, have your inspector look for signs of deterioration or "owner modifications."

Houses didn't burn down like crazy before Romex, you know. You can retrofit with GFCIs in the kitchen and bath for safety, and at the end of the story, live quite well in a house with knob-and-tube wiring.

I have had electricians come out to evaluate houses and only want to make minor modifications, usually to insulated attic spaces. I've also had electricians want to rewire the house from top to bottom!

The easiest way to get a house that is up to current code is to buy one that is built to it.

All the best,
1 vote
Fran Dunne, Home Buyer, Philadelphia, PA
Sun Aug 4, 2013
In philadelphia banks and insurance cos. would not be making any loans, but the are . Just have
to be up the Electrical code and property installed Knob and tube is Legal. Your electrician does not let
you know this because he wants the money. the try scare tactics to get you to change your wiring.
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zabbott, Home Buyer, Philadelphia, PA
Mon Aug 1, 2011
I'm less concerned with the cost of the renovation, more with insuring the house. If a homeowners insurance will insure with knob and tube, can I modify the insurance (remove whatever premium that will probably be imposed due to the risk) once I rewire the house? (Or is this just something I should ask insurance companies?)
0 votes
Suzanne MacD…, Agent, Succasunna, NJ
Mon Aug 1, 2011
FHA 203K loan. It covers the cost of purchasing the home AND the cost of renovations.
Call me if you need a referral to a lender. I can help with that. 201-602-4458.
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Christopher…, Agent, Tarrytown, NY
Mon Aug 1, 2011
Hi, I have sold homes that have knob and tube wiring without any problem. I would contact insurance companies to see what they have to say. You can always ask the seller to make the changes but if they find out it won't be a problem with the insurance companies or banks then you can bet they probably won't want to do the update.

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