Knob & Tube Unravelled My Deal!

Jolenta Averill, MBA, Broker, ABR, CRS, e-PRO (Bunbury & Associates Realtors) — Fri, 30 May 2008 09:07:57 -0500

Hi everybody,

I just recently joined this forum and have been enjoying it. It's a great resource. I thought I'd share with y'all my latest experience with knob & tube wiring in the current credit-crunched environment we're operating in <sigh>. Get ready, this isn't a short post!

Great 2BR, 1.5 bath starter home built in the 1920's. Hardwoods, woodwork, archways, high ceilings. In short, TONS of character for a modest price of $185K. Listed it and wrote on it the same day. Everything went smoothly for the last six weeks until an electrician looked at it for the lender yesterday (the loan commitment that the bank issued was actually contingent on an electrician giving his blessing on the house) and low and behold, he found knob & tube wiring. He scared the crap out of my buyers saying it would cost 10-20K to remove (I knew that wasn't true because I had a two-story home removed of its knob & tube wiring exactly two years ago and that cost $4,800 and this is only a one-story home. The buyers could not afford that since they were already borrowing the maximum amount which included $1,800 to upgrade to 200 amp service from 60 amp. Long story short, I found a quote for $5,870 for the removal of the K&T and the seller agreed to have the work done at her expense prior to closing but the buyers were too freaked out by this point to go forward (if 10K-20K to get rid of the K&T that their inspector and two other electricians didn't even find, then what other disasters are looming so-to-speak?). I guess the whole idea of owning an older home finally weighed too heavily on their minds and they insisted on backing out. They do still want to work with me and I didn't lose the listing so I feel fortunate, even though I've got 2+ months invested in the project and will have to not only find a new buyer for the listing but find a new home for the buyers. Talk about starting from scratch! But in this market, who can complain if you've got actual business to tend to? Anyway, I also wanted to comment that I had called the lender to find out what the objection was: if we could locate a company to insure the K&T would that suffice or did they object to it being in there in the first place? They said, they objected to it being in there at all. They didn't care if we could get the current insurer (or anyone else for that matter) to insure the home. I guess this is just another way for banks to mitigate their risk which translates into ever-tightening credit for consumers. But what bothers me is that banks and people may be getting the impression that K&T is a much bigger deal financially than it really is. I mean, both times I've had to deal with K&T I've been quoted outrageously high prices (7K-15K two years ago for the 2-story job) and 10K-20K this time for a 1,000sf one-story bungalow with full attic and basement access. Both times I ended up getting quotes that were a mere fraction of the initial quotes. So perhaps banks (and lots of other folks, including us Realtors!) are under the assumption that K&T is a HUGE financial liability. Secondly (and I'm sure there are people out there who are going to call me crazy for this) but isn't the whole idea of K&T being a major fire hazard pretty blown out of proportion? My seller lived in this house for 15 years with K&T and never had a problem. And I defy anyone on this forum to provide a FIRST-HAND example of a fire ever occuring as a direct result of K&T. Nevermind that there are something in the order of 200,000 people (that's TWO HUNDRED THOUSAND, folks) dying of lung cancer EVERY YEAR in the United States. But God forbid we have K&T wiring in any of our older homes. Excuse me for saying this but I think a lot of the stuff they come up with in the electrical code is simply a way for electricians to open brand new markets for themselves. The state creates a code that says you can't have this or that and voila! these folks suddenly have a license to print money. Worse, people fall for their crazy pricing. Why else would I be quoted prices of 10K-20K for two days of work? It's highway robbery, not rocket science or brain surgery. But people don't know that, they don't shop around and they simply take the electricians' word for it. So, be forewarned and price compare if you have to get rid of K&T! There are serious thieves out there! Oh and by the way, if you're going to have a home pre-inspected (which you should if you have a home of this vintage or older) because you think it might have knob & tube wiring, be sure to hire a Master electrician in addition to a home inspector and make sure that Master electrician goes into the attic with the proper tools to test for knob & tube in addition to a flashlight and a backup flashlight. In the case of this house, both the inspector and THREE other electricians failed to locate the knob & tube. Maybe they could charge less to remove K&T if they were competent enough to locate it in the first place. Sheesh. Well, that's about all the light I can shed on this one. I hope my pain and suffering won't be for nothing and this will help someone out there.

Here's the link to this fabulous house if anyone is interested! It would make a great flip, rental property, or you could put up a two-car garage (it's on a huge lot) and build a Master suite out over the garage.

http://scwmls.fnismls.com/publink/default.asp?GUID=289e5fa6-e592-49ab-a84a-3236d2907e68&Report=Yes

Happy Spring Selling!

Jolenta

Jolenta E. Averill, MBA
Broker, GRI, ABR, e-PRO
Bunbury & Associates Realtors
(608) 230-5553 (direct)
(608) 628-9701 (cell)
(608) 310-5771 (fax)
Email: jolenta@jolenta.com
Visit: http://www.jolenta.com

Expert Service. Exceptional Results.

A Lost ID Can Cause A Nightmare Closing

Jolenta Averill, MBA, Broker, ABR, CRS, e-PRO (Bunbury & Associates Realtors) — Sat, 10 May 2008 08:56:55 -0500

I just sent the following note to all my clients. You may want to warn your clients of simliar complications that could take place at their closing depending on the rules in your state as to what forms of ID are valid...

_______________________________________________________________________________________________________________________

Dear Friends,

I’m writing to you because you have a closing coming up in the next few weeks. After a very nerve-racking and time-consuming closing lasting more than 5 1/2 hours yesterday involving one lost driver's license and an incompetent processor at Wells Fargo, I feel it's necessary to advise my clients of the following:

Please, carefully safeguard your driver's license as it is nearly impossible to close on a house without it.

Other acceptable forms of picture ID for closings (in the State of Wisconsin) are 1.) a valid passport, 2.) a picture ID issued by the military, or 3.) a picture ID issued by the State of Wisconsin. If you’ve lost your driver’s license, have never traveled overseas, have not worked in the military and have never been employed by the State of Wi, your closing could become disastrously complicated (read on for details).

Depending on your circumstances (out of state license, lack of other picture ID) and the time of day, it can be nearly impossible to get a replacement copy of your driver’s license the same day you discover it is missing.

The title company you are working with can refuse to accept a copy of your driver’s license. In the event they are nice enough to do so, it can be hard to get ahold of a copy of it.

You may have provided a photocopy of your driver’s license to your employer, however in the State of WI they are obligated by law to destroy this document within a few weeks for your own protection/security.

Your bank will most likely have a copy of your driver’s license but may be unwilling to give out the photocopy of the document they have on file. Moreover, a photocopy of a photocopy is unlikely to be of sufficiently high quality for the bank’s processor to accept. You may not be able to get around this by scanning the photocopy the bank has on file. In this case the bank refused.

H&R Block and other tax preparers may have a copy of your driver’s license on file but during “off season” their offices can be closed during what’s considered normal business hours. In this case we were informed they were only available by appointment (this was in the middle of the day on a Friday!).

For your own protection, please photocopy your driver's license and store at least one copy at work as well as at home (a bank safety deposit is also a good place if you have other valuables).

If you do not have your actual driver’s license for the closing the title company may be able to get around this if and only if you have a clear copy of your driver’s license PLUS another form of picture ID that has both your name and photo (in this case a student ID was acceptable).

Never, ever store your driver's license in a loose pocket - always put it in your wallet no matter how many times you have to take it out of your wallet for airport checkpoints, etc.

If you are unable to close on schedule your loan application has to be resubmitted to your lender and may not be approved (especially these days as credit is getting tighter by the minute). Also, if you resubmit your loan your rate lock automatically expires so you will not be guaranteed the same rate even if your loan is re-approved. If you cannot close on schedule the seller may hold you liable for damages and may try to keep your earnest money or sue you for specific performance.

Who knew a little document like a driver’s license could be so critical to buying a house? Please, carefully safeguard this document and protect yourself in the process.

Best regards,
Jolenta

Jolenta's Blog

Knob & Tube Unravelled My Deal!

A Lost ID Can Cause A Nightmare Closing