I have a client who was told by their Lending Bank that they would need to remove the asbestos siding from the home at a cost of $17,000 before they would give them a loan on the home.
Has anyone heard of this before.
tks
Hi Tim,
I’ve heard of it with the old insulbrick product is it is considered a fire hazard to insurance companies. I usually call this out as an issue because it happened to me years ago when I purchased a rental property. I have not heard of it for any other reason then that.
How do they know the siding contains asbestos? Did you tell them? Did you have it tested before you told them?
Agree with J.J. was it tested?
Are we talking about Johns Manville?
http://inspectapedia.com/exterior/Asbestos_Cement_Siding.php
Maybe your client should look for another lender!
Cheers
That was my first thought. The bank employee probably watches too many DIY TV shows!
Lets call it what it is - “cement asbestos”. Is it in friable condition?
Being outdoors - aka an exterior siding, how does it pose a real dangerous hazard?
As others noted - look to another lender.
Timothy, I come across this sort of request regularly, and am frankly not surprised.
As inspectors we know that Asbestos containing material, in good condition (i.e not damaged or deteriorated) poses little risk of releasing friable asbestos fibres.
When the product is on the exterior of the home, the risk to the occupants is even less.
But this isn’t about risk to your client. It’s about risk to the lender.
If the lender considers that there is a possibility that the value of the home may go down because of the existence of any component, and that the value of the home might be improved by it’s removal, then in order to protect their investment, they are full entitled to refuse to lend money on such a property.
Look at it this way.
Say the home is priced (and valued) at $175,000. The lender may be asked to loan $166,250 on that home.
If the siding is Asbestos containing, and in OK condition now, but after purchase the siding gets damaged by an uninsured incident, what is the home now worth?
The likelihood is that the value would be appraised at $175,000 minus the cost or professional remediation. As you can’t just repair asbestos siding (legally), you are left with two options, encapsulation or removal.
You can’t easily encapsulate Asbestos containing material professionally (legally) as you are bound to OSHA regs. so unless the owner does it themselves, encapsulation is likely to be as expensive as removal.
Removal can run into tens of thousands of dollars.
So, to the lender, this home starts to look like a risk from the outset. Hence they back away.
As others have said, look for a different lender, if that fails, look for a different house.
Ensure you tell your client that you are only reporting what you found. The decision of the lender lies with the lender, and the decision of whether to continue with the purchase is a matter for your client and their Realtor to sort out.
I suspect a coat or two of good quality paint would encapsulate any fibers. Would it not?
Cheers
What’s the collective noun for Banker? A Wunch!
Tim I see 9 people have offered advice and you have not answered …what has happened ???