Signed a contract on a house. The kitchen had an industrial looking stove and an additional electric oven (thought it was a foodie who owned the house). During inspection, it became apparent that the owner of the house was running a home catering business out of the house for years (this was never disclosed and they were probably running without the correct permits, inspections etc.). The 2" sewer line that is fed from the kitchen to the main line is caked with an oily mess from the business (it needs to be replaced as it will always be a problem). The homeowners disclosed that they have to clean the line annually but not the reason why.

Not worrying about legal reasons, do you think it is fair to back out of this deal?

 

Unless there's something else you didn't disclose, I don't see how you have "fair" cause to back out of the deal. So they used to run an unlicensed kitchen, so what? You say the 2" line needs to be replaced, maybe so, maybe it can just be cleaned and it won't be a problem any more because you won't be running a business. If you have an inspection contingency, then you can negotiate with them over the price to replace the line. If you don't have an inspection contingency, but you want out of the deal anyway and have something you think you can get away with, then what's legal is up to you, but it doesn't seem "fair", for what it's worth.

Here's a picture of a watch. Seiko 6138-0030 "Kakume". About to go off for a service, vaya con queso.

 

How old is the house and what material is the sewer line made out of?

If your are looking for a reason to back out, just back out. Don’t buy house your not 100% happy with.

 

I'm not going to try to answer the question of whether it's "fair" to walk away, and the legality of it will depend on the specific laws in your state. In my state, you can just walk away if you don't like what you find in an inspection. It's common enough that I don't think anyone would blame you.

However, it's wise to remember that something like this need not be a dealbreaker. I'm not sure how old the house is, but in my experience, in houses over 50 years old, there's a reasonable chance you might have to replace the main drain line within the first 10 years of owning the house. They can crack, roots can intrude, etc. They just don't last forever. It's similar to having to re-pour a concrete driveway, replace a roof, take down huge trees, etc. You're dealing with some deferred maintenance. So if I loved the house otherwise and the location was fantastic, I don't think it would stop me from moving forward, but it's certainly reasonable to try to get a price adjustment if it was unexpected. It's just a price/money issue, nothing that can't be fixed.

 

Well there are other items: bad electrical, shoddy repairs, etc. But buying a house that was operated as a commercially run food prep business takes a different inspection approach than a residential house. Exhaust inspection of the range, etc were not done because in a normal residential house this is not a big issue. If the rest of the house was in better shape, than I would be more forgiving. Some of the electrical outlets in the kitchen were not GFCI and some were. I suspect the homeowner repaired many things himself and that scares me even more.

 

It's totally reasonable to walk away if the inspection turned up more issues than you want to deal with. It sounds like the house might be a good purchase for someone who planned to immediately gut and replace the kitchen. They wouldn't really care about the current condition.

 

The real estate mantra of "location, location, location" always applies. You can't pick a house up and move it, but you can fix almost everything else. If you love where the house is at - good schools, great neighborhood, short commute to work, awesome views, historic home - then you may be able to negotiate a price reduction to cover your estimated costs to repair based on what you found during the inspection. If the location is not a factor and you don't want to deal with the hassle, then move on.

 

Walked away from two houses during our recent move over inspection issues. Issues would have required significant work, and we didn’t want a project house so didn’t pursue a price reduction or pre-purchase remedy for that reason. In my state, it is allowed & according to our broker, not uncommon. I found it interesting that in both cases the seller accepted the contract cancellation without question and in fact refused to receive the inspection report, preferring to remain ignorant rather than having to disclose issues to future buyers.

 

It It sounds like you're not crazy about the house in general. The pipe is a pretty easy fix, and a price can be included in the final sales price. So can replacement of the commercial range with a normal residential-grade range. This is all small potatoes vs the overall cost of a house in many part of the country.

 

What does contract say about time lines for inspection? If you are within the time frame, then no problem walking, as that is the whole point of the inspection process.

But what you describe is not a big deal, and perhaps more attention to initial walk through before making offer would have helped. Perhaps you have some valid concerns for negotiating a lower rate. But it all depends on local market.

 

Good thoughts from everyone...I agree that fixing everything is possible, and it would be a nice house (great location). I was dismayed in the inspection when every repair that I looked at closely was done completely wrong (ungrounded outlets in the bathroom, exhaust fan in bathroom blows directly into the attic). Electrical issues from disconnect, to breaker box, to outlets. You start worrying about the areas that you did not look at.

BTW, the first buyer of the home walked away from the deal. I am the second buyer now considering it. I am not sure if the first buyer identified the plumbing issue. We will see how it goes next week.....

 

This gives you good leverage, and after a year or two you won't even remember the repairs. Location is forever.

 

First off, trust your gut. However if you really like other aspects of the house and do want it, you can ask for additional inspections and repairs. If they already had one buyer walk, they may be more accommodating than normal.

About the sewer drain, root incursion could be an issue. A plumber can run a camera down to check. We had root issues in our last house (built in 1949). It had clay sewer pipes and totally clogged up every six months, usually on holidays. Expensive and no fun. We had a trenchless sewer main put in. It has no seems and is pretty bullet proof, but cost a few thousand dollars.

 

Every house I've bought has had issues many of which were not apparent until much later. For some, it was obvious, for others, less so. In every case though, the repairs paid for themselves easily. If the location is good and the house has "good bones", I would see it through. YMMV.

 

I am assuming this is in the USA and I am not familiar with your real estate laws but in Canada, if the deal is not firm and there are conditions before making it firm, you have a chance to get out of the deal.
As an example, If there was an inspection condition then you can get the seller to pay for all the repairs before you wave your condition and making the deal firm. If they refuse then you can terminate the deal.
If the deal is firm then you must go through with it and after closing sue the seller and/or the seller's realtor for damages if you can prove they knew about an existing problem that they did not disclose.

 

Can I ask a general question?

Is there no independent inspection carried out prior to the sale? In Denmark, it is mandatory for the seller to supply a document covering the various aspects of the house (electricals, floors, windows, etc), at least for all visible parts. Then there is a "change of ownership" insurance that is available for the buyer which covers a large amount of unforeseens. After the house deal has been signed, the seller has 10 days to cancel the purchase, but that is pretty much it.

 

In the US it works a little different, additionally every state has slightly different laws.

I’m going to guess @kippyk is in New York by the way he worded it.

In CA for example the inspection is before escrow. He appears to be in escrow.

 

Ah, ok. Here the independent inspection review has to be ready when the listing comes up and the 10 day period is during escrow.

 

Back to the original question, If the property was run used as a food business, I’d have a pest guy (exterminator) in there first thing. You could have many previous occupants unwilling to leave.

 

That’s not gone bad.

I just got new tenants in after the last one done 20k damage and lost 7k on rent whilst I fixed everything.

Painted the house around the furniture, needed 8 new doors, stole the shed and took all the draws out of the walk in wardrobes, one room had 196 holes in the wall