(Location – Fort Wayne, Indiana)
So, we put an offer on an old house because my wife really wants to make me move closer to downtown in more historic neighborhoods. I don't feel super comfortable, but I'm trying to oblige her. It's near the top of our budget, and they come down from 300k to 275k, and we move ahead and schedule inspection.
Inspection finds active knob and tube wiring in basement and attic, and we had an electrician come in to investigate more and noticed it running up walls – not sure where it all goes. There are some grounded outlets in the back half of the house where it had an addition and kitchen renovation and 200amp box, but the front rooms on main and second floor bedrooms all have 2 prong ungrounded outlets. I SUSPECT that these may be knob and tube but we didn't open them up.
Anyways, I'm feeling uncomfortable. I called multiple insurance companies and they all said they wouldn't insure if there is any active knob and tube. We replied to inspection and said we wanted them to fix it, and now they're asking for extension (their response was originally due tonight, but they're asking for it to be Wednesday) so they can get contractors in to take a look and get a quote.
They are going to get a price and probably try to renegotiate selling price of house and knock off a bit perhaps and make it our problem to fix. I don't want to do this because it's an old house, and if they have to get into ceilings/walls and repair plaster and stuff, I don't want to get stuck with a ballooning price as things go potentially wrong. I want it to be totally their responsibility to have it all fixed before, or we walk.
The problem is, my realtor is making it sound like I am obliged to go through with this with no way to recover earnest money. If they're making efforts to negotiate and look into things and get quotes, that I am locked in to keep proceeding or totally cutting and running and losing our 2,000 dollar earnest. I am worried their licensed contractor quote won't cover the full extent of rewiring and fixing walls and making sure ALL active knob and tube is gone (I bet it's in random ceiling lights and stuff).
Sorry this is rambling – I can't even get a loan or insurance if there's knob and tube, and I want to get out of this somehow without losing money. If they come back and say "we will fix stuff and knock some money off the price" but I'm not convinced their quote was fully realistic for the scope of all the projects, do I have options?
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