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Urgent - Known Restumping Required Prior to Offer Acceptance

Discussion in 'General Property Chat' started by C-mac, 16th Sep, 2016.

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  1. C-mac

    C-mac Well-Known Member

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    Hi folks,

    I have a pretty urgent question that I'm hoping anyone with this experience could give me insight into.

    I am close to having an offer accepted on a house that will definitely require re-stumping. I don't like to pay for a $500 building and pest inspection on ANY property where my offer hasn't fully been accepted (its just not the way I roll), but with this situation its a multiple-offer scenario and the deal stacks up.

    The agent was actually quite honest with me and told me something he shouldn't have which was that one of the bedrooms will definitely need re-stumping.

    Has anyone here seen a good deal, known that it WILL require some re-stumping work (possibly $5-$10K of cost to do so) and still entered into that deal anyway?

    The house is about 100 years old and only a foot off the ground which is really crappy in the re-stumping world as it requires more expense/cost to repair it than a house higher up off the ground.

    I could bit the bullet and pay $500 for a b&p prior to putting my final offer in, but the crappy thing is I'm still at mercy of being out-offered. I think a lower offer (that compensates for the restumping costs) is stronger if it is unconditional to b&p report issues thereafter. Smarter for a vendor to accept a slightly lower price for a guaranteed sale, than a slightly higher price, then have the contract crash due to that offer's B&P revealing the restumping work required.

    What do you think?
     
  2. C-mac

    C-mac Well-Known Member

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    Oh and one other question - is a room needing re-stumping really that bad an issue?

    Agent reckons the house is still rentable as-is, its just that the re-stumping will probably be needed within the next couple of years. So I could buy it and delay doing it till later perhaps?
     
  3. thatbum

    thatbum Well-Known Member

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    Uh if I was worried about being out offered, I'd be more inclined to put a higher number on the offer rather than lower. I think most vendors would be seeing dollar signs rather than thinking about conditions.

    The stumping thing just seems like something you factor in in the overall DD and pricing.
     
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  4. Big Will

    Big Will Well-Known Member

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    I agree with thatbum put the offer in higher STB&P and then try work backwards. It is only 5-10k for restumping from the sounds of it would be more 5k. Not sure what price point you are look at but it is rather minor.
     
  5. Perthguy

    Perthguy Well-Known Member

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    It depends on the house, the area and the rental price. The house I am renovating now needs restumping in at least 1 room, possibly 2. But it is a lower end rental and I am ignoring it for now. In my case, it is just that the floor level has dropped slightly. It's not wobbly or springy. In the past when I have had a springy floor, I had it fixed.

    Could you get an estimate of the cost to restump?
     
  6. Propagate

    Propagate Well-Known Member

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    Paying devils advocate here, how can you be sure it's only one room? Even with a report there's no guarantee unless they are prepared to let you lift some of the floor to check.

    Our PPOR is 113 years old. B&P report said "possible stumping required but no access to check". We ended up having to re-stump the whole front end, (4 rooms & a hall - 86 stumps all up), plus over 50 meters of rotten joists and bearers replaced plus replace the timber floor boards throughout as they were too far gone once we started pulling them up to get access under. When you see how bad the joists were it amazes me no one had gone through the floor!
     
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  7. C-mac

    C-mac Well-Known Member

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    Folks thank you very much! I can't respond properly now (busy scrambling to get things done to try and close this deal!). Will respond later with outcomes :)
     
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  8. melbournian

    melbournian Well-Known Member

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    depends how severe it is - if your doors still close and open and not get stuck or the floor is not collapsing, I would just leave it and rent it out. It cost about $500-$600 per stump in Melbourne depending on the concrete or timber stumps and depends how many stumps it is. Also better to rent it out and restump it later as claim through tax as initial repairs prior to renting are non-deductible and added to the capital base. My previous work colleague didn't do any restumping for 10 years in his house before finally doing it.
     
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  9. C-mac

    C-mac Well-Known Member

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    This is a great tactic - my thoughts exactly! Risky, but I've enlisted a b&p tomorrow morning at 10am, so we'll see what he comes back with. Doors open/close no worries, but he might say otherwise re: the urgency of their repair.

    I've asked him to project a cost implication to restump the whole house, too, as well as detecting roof, rot, cracks, and other issues (including Heritage issues - i.e. cost to conduct any repairs down the track and the possible need to replace heritage-specific things).
     
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  10. Joynz

    Joynz Well-Known Member

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    In Melbourne it is not usually $500-$600 per stump - was that a typo?
     
  11. S0805

    S0805 Well-Known Member

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    You may want to check this accountants here. re stumping even part of the house if its rental is not considered as repair from my understanding hence its no claimable....not sure if it improves depreciation benefit either...
     
  12. melbournian

    melbournian Well-Known Member

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    I do use qualified reputable accounting firms which do specialize in tax. so for example I purchased house A I did all the initial works it is not straight away deductible as it is initial works prior to a tenant moving in where else if my hot water system broke when my tenant has been living for the last 6 months or it is straight up deduction. Same applies, If for some reason the door is Jambed tenant complains so realized one room needs restumping as it is not level (which that cost is deductible). If you saying that repair an IP it is not deductible as the property is income producing that is really not logical if you ask me. It is like saying a taxi driver can't claim maintenance on his car or new tyre etc.
     
  13. Beyond Wealth

    Beyond Wealth Active Member

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    @Propagate - what did this cost?
     
  14. Tim86

    Tim86 Well-Known Member

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    Thats a big job. How much did it set you back?
     
  15. Propagate

    Propagate Well-Known Member

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    @Beyond Wealth @Tim86 - Re stump was around $12k which included leveling, 86 new concrete stumps, 50 meters of new joists and certification. I had to pull the floor up prior for access. Another $1k on top to cart away all the old rubbish and soil that was dug out. Can't remember how much the floor was to replace, we got the "new" timbers reclaimed from a timber yard, they were laid at an hourly rate (which took a few days), that another $3.5k on top to sand them back and 2 pac them. $25-$30k feels about right from memory, but as I say, a good chunk of that was the replacement floor so may get away with just the stumping? I Know it's nowhere near $500-600 per stump! That would have meant over $40k just in stumps!
     
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  16. Magoo

    Magoo Well-Known Member

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    The fact that other buyers have so much interest tells me they are willing to overcome the stumping issue. In my experience most Vendors would take a little less for a contract with no conditions over one with conditions. I would always encourage a vendor to accept contracts with less terms so it has less chance of crashing.
     
  17. Luke T

    Luke T Well-Known Member

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    Most older places like this off the groung need some stumping work somewhere.
    I would just do the ones needed (if bad enough) and rent it out
    depends who you use but can be from $3k-10K
    If you do it yrself allow $120 each for new steel adjustable piers
     
  18. C-mac

    C-mac Well-Known Member

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    Hi folks, thanks again for all the great insights and advice!

    I didnt end up going ahead with this purchase which is unfortunate as I'd coughed up the $500 for the b&p report anyway. On the plus side I learned a tonne of things from the b&p (about restumping as well as many other areas) so to feel better about it I'm treating the $500 as an investment in my property education. I'll be better equipped for future deals with some of the intel scraped out of this property's report!
     
  19. Azazel

    Azazel Well-Known Member

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    At that price it would be worth looking into house raising, and developing underneath over time.
    Seen some pretty reasonable prices thrown around, but the extras add up pretty quickly.
     
  20. Big Will

    Big Will Well-Known Member

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    Make sure you put that $500 towards your capital cost on your actual purchase :)