Profile picture for CTBuyer203

Buy a home with stolen copper pipes?

First time buyer here. Today we're being shown a house that has been on the market for quite some time. Our agent found out that sometime during that vacancy, the copper plumping pipes had been stolen (common occurrence I'm told). 

My question is more toward how we, as the potential buyers, should approach this. The home is listed at 200k and we've been approved for an FHA up to 225k. Problem is, I know this home won't qualify for an FHA if it is devoid of working plumbing.

Bottom line: Should we ask the seller to foot the bill for the repairs and if so, can we expect that cost to be transferred to us in an inflated sale price? I know they are not required to meet FHA standards to sell to a non FHA buyer, but with us, they either fix it or we do for the loan to go through. 

Any thoughts on how we should approach this situation?
  • November 26 2011 - Milford
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Answers (14)

If you like the home try to get it for a "no brainer" price that makes sense for you to deal with the short comings of the home.  You mentioned it's been on the market for a while so the seller "bank/whoever" maybe be willing to unload at a fair priced based on condition.  There are loans that can facilitate the purchase such as a rehab loan, which FHA has a great 203k product and a streamlined version if the home meets the qualifications (talk to your lender about that).  Otherwise, ask your lender if they will allow the repair work to be escrowed and paid for by the buyer at closing, and if so talk to your agent about going to the buyer with that offer.  Good luck...  
  • December 12 2011
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Not really a big deal.  Since the copper piping is gone, look at using PEX.  Easy to work.

http://www.pexinfo.com/

http://www.plumbingnetworks.com/info/pex-copper/

cheers,

Steve
  • December 08 2011
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Certainly, it is not my place to tell another Realtor what to do--
Vacant homes have been subject to vandalization, and one current trend is the removal of copper from a home for scrap value. As an Exclusive Buyer Agent, I have often explained to a client that we can not determine the entire scope of the damage on aproperty that is missing pipes/plumbing. Yes, there are rehab loans, however, I do not feel there is a 100% way to know exactly what you are dealing with. Since you are a first time homebuyer, I would strongly suggest that you look for a home that requires little or cosmetic repair.
  • December 08 2011
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A further concern to take note of is that the theft can cause other damage beyond the replacement of the plumbing pipes. In one home the copper theives pulled copper out of the HVAC, and when they did they damaged the compressor. This resuleted in an additional repair that cost $7,000.
Having this situation means that if seller repair is not an option, the price needs to reflect your headaches and possible unforseen costs to be worth proceeding.
The seller should not have the option of inflating the price of the repairs, but should have a licensed, permit pulling professional do it. Don't forget to shop for a home warranty!
  • November 29 2011
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Odds are this is a REO property and this is unfortunately a common occurance.  I doubt the seller is willing to fix the issue and wants to sell the home "as is".   I've been able to help other buyers with very similar situations with a rehab loan with as little as 3% down.  Not a FHA 203K loan.  If you are in Massachusetts, then I may be able to help.  Please feel free to contact me directly for the details and guidelines to see if you qualify.  Thank you!
  • November 28 2011
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"Yes, absolutely ask that the pipes be replaced and no it should not be reflected in a new sales price. They must have had insurance on the home so perhaps they are waiting for a firm offer before replacing them....are they?"

Not necessarily. If this is an REO, and it sounds like it is because it has been vacant for some time, the selling bank will not likely bother to make any repairs, insurance or not. They will just wait for a cash buyer who will deal with the problem. With REO's, the listing agent and/or an asset protection company is often responsible for repairs & upkeep of the property & the slush fund they are given to do this might not cover this.

There are, however, some banks that will make a house qualify for FHA loans. Especially if the loan is going to be with their bank. It doesn't hurt to ask. (unless the listing specifies "Do NOT ask for repairs") Then you can deal with the outcome as it happens.
  • November 28 2011
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Since you are an FHA loan the proper plumbing is required.  You can ask the seller to fix the issues or move on to a better property that doesn't require that much extensive work. 
  • November 28 2011
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Profile picture for NY Broker
your agent should know what other homes in the area would suit you better
  • November 28 2011
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Profile picture for Juan A Pineda

your answer is that your agent find you properties that qualify for fha loan

  • November 27 2011
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Hi CTbuyer203, I know you are looking for answers to this issue but your Agent should be knowledgeable and up to date on how to proceed with this situation.  It would concern me as a buyer in this market if I was working with an agent who did not have the answers.  It would also make me question is my agent going to be looking out for my best interest when it comes to other issues.
Wish you the best of luck!
Ray
  • November 27 2011
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As you're an FHA home buyer you may need to select REO's that do not require as much repair and that will meet FHA appraisal guidelines...

the property you're currently considering sounds suitable for a cash buyer
  • November 26 2011
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Profile picture for sunnyview
You need a tight estimate of the repairs that are needed and you need to ask your lender about a 203K loan for rolling repair costs into your total financing.

I would make sure that the repaired value of the house is well above your loan amount or you need to negotiate the price down for hassle factor and additional risk.
  • November 26 2011
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You can request the repairs be made in your offer or get a 203k FHA Rehab Loan.   The rehab loan may come with higher expenses tho.  $225k sounds like a lot of money for a house that is nearly being offered to Cash Only buyers.
  • November 26 2011
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Profile picture for Sharon Lewis
Yes, absolutely ask that the pipes be replaced and no it should not be reflected in a new sales price. They must have had insurance on the home so perhaps they are waiting for a firm offer before replacing them....are they?
  • November 26 2011
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