Friday, February 07, 2014

Heights House, We Hardly Knew You

UPDATE: 8/22/16. Congratulations to the newly contracted buyer of this house. The owners removed the oil tank in 2014, and in May of 2016, public records indicate activity in front of the city council. I don't know what, but perhaps that's an all-clear report. Seems obvious to me that putting money into escrow during my contract would've been easier on them, but they were able to sell for more in the current market, and I ended up with a much better house in a great location. So it all worked out in the end, but they had two years of fun in there involving this leaking tank. All seems good now.  

It's been a while. We should catch up.

I've been working overtime on two projects. I was looking forward to the crunch of work slowing down right around the time I closed on my house, which I was looking forward to personally renovating, though I would have paid someone to remove the asbestos. And probably to work on the moist chimney and the cracks in the stucco. But I was going to redo the old-lady kitchens and completely over-the-top bathrooms myself.

This house was for sale in Jersey City Heights. Which I was in a legally binding contract to buy until a soil test revealed a seriously leaking oil tank at a PPM threshold a few hundred away from mandatory DEP reporting and remediations threshold in the State of New Jersey. I watched a nice guy from Accurate Tank Inspections pull the soil sample out right in front of me. P.U.! There wasn't any doubt. Either the oil tank was leaking or a hadrosaurus, the state dinosaur of New Jersey, died under the sidewalk.
I might be wrong about the state dinosaur of New Jersey, actually. I think I was about to encounter that.

The house seemed perfect for me. Not too far from the PATH train in Journal Square and only a few blocks from the Port Authority jitney. Two apartments and room to grow in the basement (once you got the asbestos out). Once you factored in the mortgage and taxes, it would have been about $1800 a month for two apartments. Well, that's what I originally thought. That's a bargain. Of course, tax reval letters just went out, and I later learned I had to factor in an additional $5500 a year ($458/month) in oil heating costs. $1800 a month just went to $2258 for a place that produces income of $2500, at a time when taxes are quite likely to go screamingly high on it. But you convert to gas and get that leaking oil tank out and then the tenants can pay for their heat. Of course, you still have the ax of the tax reval hanging over you.

It had original detail. Lots of wood. I did some research into public records. Turns out Dad was a carpenter at a pencil factory. I'm guessing the one around the corner. The family came over from Ukraine in 1936. They bought the house in the forties. I'm not sure when Dad stripped the wood, and for sure someone did. People painted wood in the old days. You only showed wood if it was high-quality wood. This was normal wood, beautiful only for being wood without paint on it. But he'd applied a varnish and there was no evidence of termites. He'd done a nice job on it.

When I first looked at the house, the manual from the downstairs oven was still in it. I believe no one had lived downstairs since the early seventies.

I was excited about the original pocket doors and the stripped moulding, though the more I think about it, the more I laugh at the last bit. Dip'N'Strip in Hackensack can do the same thing, and I have a pocket door in my garage waiting to be restored when I "have the time."

I was still excited about the house after the most hardcore property inspector in Jersey City turned up that the house was "a project." That's okay. I love projects. And it was my house! It was fate! The last resident, Stella, had died on my birthday. She wanted me to have it, see?

It got even weirder when I found a Jersey City record that she'd divided the two houses the family owned into two legal lots...also on my birthday, though several years earlier. That's probably when they sold the house next door.

I got a mortgage commitment and an asbestos removal estimate. I nearly started tile shopping, but then I held back in case something went wrong.

And it did.

The sellers refused to address the leaking oil tank. (Results are posted here.)

I know what you're thinking. What if you this, what if you that? No, refused. As in no credit. No escrows. House is as-is. And by as-is, we mean it. "You damn hippies and your crazy ideas about the en-vie-roh-ment." No, they didn't really say that, but I have this visual of a house full of really old classic Jersey City guys sitting around somewhere in the suburbs talking about how "In my day, you'd get in a friend with a Bobcat on a long weekend."

This all seems kind of crazy to me. It's still their house leaking oil under the city sidewalk. Seems to me they should do something about that.

Since they didn't appear keen to act, I did some calling around. It's only $2750 to install a new inside oil tank, and $100 for the permit to dig up the Jersey City sidewalk. That seemed manageable. And that's when I learned it's $5500 a year to heat the house. Yikes! But there was water in the tank when my house inspector was there, and apparently the tank doesn't quite work right even without spewing oil into the dirt, because the bottom several inches don't actually get used. Like a straw that is too short for a glass. The oil guy came during the house inspection. He siphoned out the water and put in more oil. There was a half-inch of water back in it a few weeks later when the oil tank guy came.

Look, I don't want a toxic oil tank anyway. Of course I'd move it. $2850 seemed okay, even on top of the $1700 I would have to pay for the asbestos and the $500 or so to fix the chimney.
My hadrosaurus under the sidewalk

Then I started calling oil tank removal companies. They scared me out of my wits, which is for the best, as if they hadn't told me all about the risk of liability, I probably wouldn't have listened when my attorney told me no way in hell would he support me buying the place without knowing the extent of the contamination.

I was very, very sad to back out of what was the nicest old detail I'd seen at a price I could actually afford. But let's say the cost was between $20,000 and $100,000 (yes, it can go that high).

I can't really afford to buy a toxic site. Even if it is tradition where I live.

I had to let it go.

Here's what I lost:

$500 for the appraisal.
$600 for the home inspection.
$385 for the tank soil test.
And whatever my lawyer charges. I don't know if it's full-price for a closing that doesn't close.

I'm not rich and I was operating way out of my league here, trying to make something of myself for my future. Instead, I lost about $2,500, POOF, it's gone, like it never existed.

I could have done a lot with that money. I probably wouldn't have. I probably would have just left it in the bank, with the rest of the money from selling my condo a few years back. I'm not happy about it. I think people who try to sell a house have an obligation to actually sell it, and to be serious about selling, not to just stick their heads in the sand, or even worse—what if they're going to fill the tank up with gravel on a long weekend, put a new one in the basement, and call it a day? But it's not my problem now. Though I'm happy to assist with their legal obligation of disclosure, here. now. Because I'm interested in helping other potential buyers not end up losing money like I did.

It's a nice house (photos here), though, up in Jersey City Heights. Shame it's contaminated by a rotting hadrosaurus.


Anonymous said...

Oh dear, what a shame.I think you have to pull the tank and remove all contaminated soil and replace it.Utilities are probably running right thru it, walks etc.Big Bucks.I believe the owner is obligated to disclose his prior knowledge of this early on, before you run up expenses.
If you're feeling real low about the $2500, find a copy of The Money Pit.
Don in AL

Marie Javins said...

Yeah, it is true that the owner is required to disclose. Either they thought it would pass or they didn't realize that water showing up in the tank all the time was worth thinking about. Hmm.

Anonymous said...

I dont' know these people but it sounds to me like they found a buyer who didn't mind dealing with the leaking oil tank, and since they found the buyer on their own (like maybe it's the same group that bought their other property? just a guess), they are waiting for the expiration date with the Realtor they'd listed with so they can make the deal without paying for a commission or an oil tank. But I am just a random reader who stumbled over your blog while looking for information on investing in Jersey City. I don't really know.