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Buyer Due Diligence Update

I’m still holding off giving the address of the house that we are buying (I want to wait until I have loan approval which will require the results of the appraisal taking place today). Without discussing the financials of the transaction, this is where we stand:

We did not have a professional inspection. This is never recommended but in our situation and the planned extent of the remodel, a visual inspection is not cost effective. Instead we went straight to the areas we expect to have issues.

I started with Buyer Due Diligence Part 1 which tells you why you should always have a professional inspection.

Buyer Due Diligence 2: Sewer Scope Results was about the sewer scope performed by Pipe Repair Services. The sewer is in bad shape, especially under the street tree, and their bid is $3620 to replace it.

The soil was sampled around the oil tank by Alpha Environmental. Due Diligence Part 3: Thar’s Oil in Them Thar Ground outlines that test. The soil tested at 59,000 parts per million. At 50 parts per million, DEQ is notified. The tank will be decommissioned within the 90 day period DEQ allows. The bid varies depending on the amount of clean up required to get to acceptable levels.

Buyer Due Diligence 4: Lead Based Paint, is tomorrow’s post. Wednesday will be, Buyer Due Diligence 5: Stucco (links added 5.7/08). This is the most expensive inspection we are having (estimated at $900 by Western Architectural) but will answer the question as to whether the old stucco can be repaired where it has clearly failed or whether it all needs to come off to be remedied. If it has to be torn off it will probably have to go through the City’s design review process for the Historic Alphabet District.

5 Comments on “Buyer Due Diligence Update

  1. This series of posts is very informative. Thank you, Charles.

  2. Without you getting into specifics, have you noticed a change in financing rules for non-primary residence loans? Were you required to put more down? Higher interest rate vs primary residence? Curious as to how different the financing process is related to primary residence. Thanks, bearlee

  3. Financing this house is a whole different ball game as it is a construction loan with Sapphire Development as the buyer, not me personally. It has proved a challenge but doable. I just got back from meeting the appraiser. The appraisal isn’t for today’s value but for the finished value based on the planned renovations. I’ll write more about this in the future.

  4. Just to reiterate Happy Renter. I also appreciate the play by play you’re giving us on this property. This is a very helpful/informative post about the buying process.

  5. Charles is gone, but our appraisal did come back at value and we are moving foward to close on time. I am sure he will give more details soon.

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