Below is a copy of the email I sent our real estate agent this morning. It should give you an adequate idea of how things went. Ugh!
I'm not optimistic after the home inspection. We know that similar houses in poor state are going for more money in the area, but after seeing intimately the amateurish re-fab of those bathrooms and the poor workmanship on a lot of the repairs that made 2434 at least cosmetically superior to others in its price range, I have severe reservations. Some of this stuff could be put off with simple finishing work, but I'd not be comfortable knowing the state of the workmanship underlying those repairs, and those problems would need to be addressed sooner rather than later.
To go forward we'd need the listers to come down substantially on the list price. We're cognizant of the market realities, but expected the work already done was of a certain quality, otherwise we would not have bid on it. After checking out the burner and the water heater and the water pressure, and now suspecting that those sewage lines leading to loose toilets would need to be reset or moved (one toilet is actually embedded in the wall because the sewage pipe is too close to the wall, another has a broken tank lid because it is too close to the wall), I am balking at the substantial work necessary not only to bring the house up to code, but to do so with quality workmanship. We'd likely need more than a hundred thousand dollars to revamp the first two floors to a comfortable (and safe) degree for mere livability (the kitchen, bathrooms, plumbing, wiring, and heat alone would entail major work). Or, barring a heavy investment, we'd need substantial time to complete the work ourselves.
We'd also hoped the existing woodstoves and fireplace were sound, but they're not, and the listing agent says none of those things would be guaranteed under the home warranty. A chimney re-lining of one of those would run $5000-$6000 I'm sure (ours cost $3800 seven years ago, and is less than half the height). And with the burner replacement, detached radiators on the third floor and other likely problems in the heating system (water damage around at least two radiators) we'd need those woodstoves! The oven in the kitchen doesn't even work.
Because I almost fell through a gaping hole in the floor upstairs that was covered over with wall-to-wall carpet, and which I was unable to see, I pulled up the carpet at the back of the house a bit and noted that not only is the third floor completely rotted, but that the visible joists were substantially deteriorated. I pushed the carpet down in that hole and could not even FEEL a joist. The rooms in the front of the third floor are in much better shape, leading me to wonder if the ceiling was down at the back of the house at one point. I suspect that rather than repair the heavy water damage sustained, a decision was taken at some point to simply hide it. The roof is sound now, but I worry about the ceiling of the second floor and how secure the joists are, etc. Of course we'd expect this in an old house, and could live with that damage and save toward eventual repairs, but given the fixes necessary to the first two levels we're not comfortable at this time and at this list price.
Our inspector actually pulled me aside and told me flat-out not to buy the house. He said he wouldn't pay more than $250 for it gutted, and that we'd be better off if it were gutted--I'd already thought the same thing after examining the inept tile work and plumbing in all the baths, the master included. Of course our inspector is hostile toward old homes, which is one of the reasons I hired him, but his point is valid nonetheless. He urged me to hire a plumbing inspector, an electrical inspector, a heating inspector, a mason, and a builder to individually itemize needed repairs. I suspect such an itemized list would easily add up to more than 100k just to meet code requirements, and there's no way we'd get that shaved off the list price; the world's most motivated seller would be foolish given the market realities to drop so far. We know there are people with cash who are willing to pay for the bones of this house and the square footage, and who are able to come in and demolish and start from scratch. We'd have a good chunk of cash available after selling our place in Towson, but the new mortgage would be twice what we're paying now, and the necessity of having to re-do the existing repairs would make this a very unattractive option for us.
What are your thoughts? If you think we could renegotiate substantially (we'd want a price under 290k) downward and get a good response we'd still like to play ball on what we consider a house with a great deal of potential. I think, however, the listing agents would give or take 20 grand at the most, putting it out of our zone of acceptable risk. They'd have market data backing them up to boot. Perhaps we should simply discuss listing our house and continuing to look at other properties to save everyone time? We don't want to delay the owner further if they won't come down that far because we know he needs to sell quickly.