Here is my situation. I have a closing date for a home in FL. The home’s purchase price is a good deal for around 125K. I was able to negotiate -10K off the listed price and the negotiated price of the house is -12K under the appraised price of the home. The seller refused to pay closing costs.

Upon first visiting the home with the agent, the HVAC was not properly working. The handler was buzzing but that was all the action that was happening. No air flow. The rest of the house was up to par. We called the owner and he said that there was nothing wrong with the HVAC and the realtor said that if I was interested in the house that we could find out about the HVAC in the inspection process. So we bid on the house and after a few days the seller agreed to the price. Upon arriving for inspection, the AC was already running and was properly cooling the house. The inspector was a former AC repairman and he went over the unit with me for about 20min. He could find nothing wrong with its operation but stated that the outside unit was 15 years old and the inside handler was 25 years old.

We have to have two appraisers because the seller is an investor (and also a real estate agent) and did not live in the house. Without any mention to the appraiser about the HVAC, he attempted to turn on the HVAC when he was at the house and was not able to get the compressor to turn on. He stated this in his report and that he also checked all breakers. The house appraised for more than we are paying and I was told by the lender to not share the appraisal with the seller.

Upon receiving the appraisal report, the loan underwriter (FHA loan) stated the HVAC must be fixed for the FHA loan to go through. Upon hearing this, the seller said he inspected the HVAC and stated that the appraiser did not turn on the circuit breaker! The appraiser explicitly stated that he checked all breakers while trying to get the compressor started during his time in the house. The seller appears to be lying.

There will be a second appraisal of the house next week. The real estate agent seems to take every excuse for the intermittent problems of the HVAC that the seller comes up with. The agent is not the listing agent as was not representing the seller from the beginning. I am afraid that when the second appraiser comes to visit that the seller will have this HVAC temporarily working again. What should I do? Of course I do not want to be duped into buying the house with the HVAC problems! However, the house is priced right.

You stated the house is priced right. Priced right for the HVAC working or NOT working?

Considering the age of the units getting a home warranty that covers the HVAC system could be advisable.

How has your agent felt about this situation? What is their advice? I ask this because without being able to read over your contract, it is very hard to answer without knowing all the details.

If you were smart you would understand mechanical items all have LIFE CYCLES.

Just like buying a car.You can buy one with 30,000 miles on it or one with 200,000 miles on it.Either one might break down tomorrow or work intermittently but the odds are greater with the older one of needing replacement sooner that later.

So I don't just look at whether something works or not.When I buy apartments for investments I look at the mechanicals.If they are at the end of their life expectancy I count that into a replacement costs that will happen soon after I buy.


Just like if the roof is 15 years old you might have 2 years left before having to re-shingle it. If the items are 15 and 25 years old there are 2 items to consider.

Number 1: They are not energy efficient and will run up utility bills.

Number 2:The older units have free-on that by federal law you have to replace the units when they go out.The good news is you can get tax credits for doing this.


It sounds like the seller is a cheap as@ but FHA won't let fly an A/C that works off and on.

So put the screws to the seller and walk and buy another place if they are being unreasonable.Whether they deal with you or the next buyer the A/C will still be an issue.As for the home warranty be real careful before buying those as the riders have loopholes in them.Make sure the seller pays for the home warranty and that the warranty is your choice and you read the contract thoroughly before signing.

No legal advice.

Marc when you price in buying a new HVAC then I am really buying the home for the listed price. That still beats the appraisal by a few thousand, but not a spectacular deal.

I have the warranty picked out already, but of course it will not recover replacement, just repair.

The agent thinks the house is priced right and that the deal is good. She is technically challenged and is just understanding that if the unit needs a new compressor that this equals brand new HVAC, She pretends to back my position, but I can tell she really just wants to close this deal. She didn't bring any of this up. I had to do it all. When I spelled the situation out to let her know that this seller was playing chess, then she began to become interested in resolving the issue of the HVAC. If I hadn't said anything, she would not have said anything.

Super Realtor, thanks for that advice on acknowledging life cycles. I needed to hear that. I went to thinking today and thought that if the seller even went so far as to replace the unit, then he would probably buy the cheapest piece of equipment possible anyway. IO need to have thought about that.

A second appraiser is being sent this week, and there is already special attention being paid to the HVAC. I will let the underwriters protect me through the FHA guidelines. If he runs away from the deal because of that then I will have to prepare to pick another home like you said. However, if this gets past the underwriter then I will probably bite the bullet and see what happens. Thanks for taking time to respond. You have been very helpful.

Yes it sounds like the agent just wants this to close. You have to protect yourself.When I look at apartments I look at capital improvements needed and deferred maintenance and price that into my offer.

You are right that the seller will buy the cheapest POS possible to put in there.This is why I always ask for a credit or amount to be held in escrow where (I) can choose what will go in there.

A home warranty for repair is crap.You will have a short warranty period and they will keep patching it up until the warranty expires and then you will buy a new one anyways.I don't think you really want to live through that hassle.

Right now you have the rebate credits some at the state and others at the federal level for making your property more energy efficient.Your local HVAC company can give you an estimate along with credits you would receive on the state and federal level before you buy.This way you know worst case scenario going in.

To me it sounds like you are getting a marginal deal as it is and should drive a harder bargain.Some agent-owners think they are selling a jewel and can railroad a buyer. I just say NEXT!

good luck

do you know what a new unit cost? my partner just had a rehab done and paid 2400 for the inside unit and the exterior unit...2400 total.

price it out adn you might be suprised at the reasonable cost for a new unit. not stating that the seller is doing anythign right or wrong, just like super said...the unit is at the end of its life anyway and the home "sounds" like it is priced right. that to me means taht it has taken into account that hte unit is not new and priced accordingly.