Step Three: Inspection

I can’t imagine purchasing a property without a full inspection, but I guess some people feel more confident in what they’re purchasing.  Even though our plan was to tear down the existing home, we still had a full inspection done so we had a sense of what we might be dealing with during demolition.  The inspection was actually enlightening.  We learned that despite its appearance and age, the home was in surprisingly good condition.  The floor joists were basically whole tree trunks, and showed almost none of the normal signs of rot.  The basement was dry, even though it had been a pretty damp month and there was no sump pump.  Most of the basic mechanical systems were either new or in good repair.  The water test did come back negative, but that would be easy to fix with a filter or ultraviolet system.  We already knew about the state of the septic system, but the inspector confirmed that it was cracked and taking on ground water.  Learning that the house was in such good condition made us start to rethink the idea of completely tearing down the house.  We started to wonder if we shouldn’t preserve this historical construction, which had held up so well for so long.

We also had the property lines surveyed.  This was so we could better see where the property lines were, other than just the word of the owner.  It was also important to us because the property does not actually have any frontage.  It is accessed from the road by a right of way across a neighbor’s property.  We wanted to be sure that there would be no legal problems regarding the right of way, so we made sure to research the deed for such and make sure it was included in our new deed.

During this inspection phase we received our first real setback.  The seller’s attorney sent us a letter amending the seller’s disclosure.  Where she had initially noted that there was no litigation against the property, we now learned that the health department had initiated litigation against the property for repair of the septic system.  As I mentioned before, we knew the septic system was in poor condition and would need to be replaced.  But now we learned that the health department was involved and would require us to install holding tanks and put money in escrow for replacing the system before the sale could go through.  Since we had been planning to take out a construction loan, we had intended to include the price of the septic installation in that loan amount.

We spoke to our attorney and she spoke with the attorney for the health department, and explained our plans to build.  Given our plans, the health department was willing to be more flexible in their arrangements, but we still had to agree to not occupy the house until temporary holding tanks or a new septic system were installed.  This put an end to our plans to move in while we built, but in the end, this actually offered us a bit more flexibility in deciding whether to reuse the existing house or tear down and rebuild.  So despite this hiccough, we moved forward to closing.