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My wife had an electrician in the house 10+ years ago and thought he was removing the old knob and tube wiring as part of the overall system upgrade to 200 amp service. An electrician there yesterday (to fix a light switch) discovered that the knob and tube wiring is still active in some of the lighting fixtures and switches.

We accepted a lowball offer on the house sale on the condition that the buyer not ask for any repairs to be made (or concessions provided in lieu of repairs). The buyer said "yes" but still wants to do a home inspection (which I have no problem with). We disclosed no knowledge of active knob and tube because that's what we thought the situation was.

I'm fine with our agent disclosing the new information to the buyer's agent. But I'm concerned that the buyer may say that we have to fix it, regardless of the "no repairs" agreement. My electrician said it would probably run about $7,000 just to replace the wiring, then another $1,000-3,000 to repair the walls, ceilings, and floors that would need to be opened up.

The offer on the table is already quite close to the bottom line number we can afford to take. I could see tossing a few thousand dollars (at most) to the buyer but not the total cost to remediate. I don't want to lose the deal, however. Any ideas on the best way to handle this? TIA.

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    Yeah I have an idea. Find that electrician that hosed you 10 years ago and make his ass do the job he originally was paid to do. Outside of that, take your lumps and disclose it. What's worse, not disclosing it and getting sued, or taking a loss on the sale and or losing the sale? Commented Apr 28, 2015 at 19:43
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    I've never heard of "knob and tube" wiring. Am I going to regret googling it?
    – Vicky
    Commented Apr 28, 2015 at 20:22
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    @Vicky your eyes might burn out of your head when you see it. All of my places still have it. I am planning an upgrade to my buildings over the next couple of years but in short it is EXPENSIVE. Commented Apr 28, 2015 at 20:53
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    I am fairly sure that knob-and-tube wiring no longer meets NEC standards for new construction, but most likely the NEC grandfathers in existing wiring so that it need not be replaced on the grounds that it is out of code (or a safety hazard). There are many (older) houses in my town that still have knob-and-tube wiring and which get sold like hot cakes (with the wiring in place) because of their century-old charm, mature landscaping, etc. And yes, replacing knob-and-tube wiring is expensive. Commented Apr 28, 2015 at 21:05
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    Disclosure is probably best, and if you really aren't willing or can't go lower you tell them that. Worse that happens is they walk away, but that's better than you doing something you can't afford.
    – Andy
    Commented Apr 29, 2015 at 1:23

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My house still has a lot of knob and tube wiring, as did a house I owned years ago. I don't think there's anything inherently dangerous or otherwise problematic about it. It's more work to install and maintain than modern wiring, but so what? If you need to change the wiring, you replace the sections you need to change at that time. See this page on the subject: http://www.nachi.org/knob-and-tube.htm The only real issue I see is the lack of a ground wire. In my old house I replaced sections of it as I did minor electrical upgrades, like when I ran a wire for a new outlet I'd replace the knob and tube from the fuse box up to where I would be splicing in the new wire. I've lived in my current house for about five years and I don't recall replacing any of it. This house has stood for 102 years so it can't be too dangerous.

Of course the buyer may be concerned about it for any number of reasons. Whether the buyer's concerns are valid are not, they're realities that you have to deal with. I'd disclose the information matter of factly, not make a big deal of it or propose doing anything about it, and see how the buyer reacts. If they say, "huh, what do you know", you leave it at that. If they demand upgrades, then you have to look at your maneuvering room. As with any sale, the bottom line is: am I better off accepting the best deal that I am likely to get with this person, or walking away and looking for another customer? Whether the net price you are getting is too low because the customer is demanding electrical upgrades, or because they want a new roof, or just because they're offering a low overall price, doesn't really matter to the final go/no go decision you'll have to make.

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  • (I'm the OP) The issue is not about disclosure; we did that yesterday. The problem's that the price we accepted was based on not thinking we'd have to spend $5-10K on repairs. The buyer offered a lowball number, which we accepted contingent on him not asking/expecting us to make any repairs (or drop the price at closing). Where I'm located (New Jersey) it's nearly impossible to get insurance on a house with knob & tube. No insurance = no mortgage. No mortgage = no closing = no sale. If the repairs were a $2,000 thing, I'd just offer to split the difference w/ the buyer. But it's not.
    – user249493
    Commented Apr 29, 2015 at 20:59
  • @user249493: This is really dumb. I have learned long since this question was asked that knob and tube is acutally safer than modern wiring. Plastic insulation degrades and after about a hundred years you have a problem. But knob and tube lasts. Even with all the insulation gone there is no short. The problem comes in when contractors that don't know how to work on it (and that's most of them) work on it. The insurance company doesn't like that risk.
    – Joshua
    Commented May 3 at 16:28
  • Coming back to this question years later: If the buyer is demanding rewiring -- again, whether because they can't get insurance without it, or whether they, rightly or wrongly, consider it unsafe, or whatever reason -- then you have to go back to negotiation. If the buyer is thinking, "I agreed to pay $X as-is, but now I don't like the as-is so I want you to pay for upgrades", sorry, but that's not reasonable. And it's certainly not legally binding. You can't just decide you don't like a contract and declare it must be modified to your advantage.
    – Jay
    Commented May 4 at 5:19
  • @Joshua Probably true. With knob and tube, the wires are like a foot apart, it would be almost impossible to get a short without really trying hard. With modern wiring, the wires are like 2 mm apart. Something damages the insulation and you can easily get a short.
    – Jay
    Commented May 4 at 5:21
  • At one point I got new insurance on my house and one company wouldn't cover it because of the knob and tube. Again, whether that is a rational position or not doesn't change the fact that that was their policy. I also had the crazy situation that, my house has a lot of old plaster and lathe, and the insurance company insisted that if the house was damaged by fire or flood or whatever and walls needed to be replaced, they had to be replaced with plaster and lathe matching the original. Which is way more expensive than modern plaster board because it's labor intensive. And so they priced ...
    – Jay
    Commented May 4 at 5:23

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