going into broken record mode.... (sorry guys)
So, I'm in escrow on this house
(which will be my first house). I beat out 4 other bids to get it. My bid was almost 10% over asking price. I've been in the house market for a while, and this is, by far, the most unique house I've come across. Absolute privacy, nearly 270 degree views and it's not very far out of LA - only a 20 minute drive to my office. Houses like this don't come on the market very often - this one has been in its previous owner's family since the 60's.
I've had a structural engineer come out to survey the house & surrounding retaining wall... Turns out the retaining wall is a gravity-type wall, i.e. it's only held in place by its weight. It also happens to be cracked pretty good around the tree that's growing in the patio. Because the wall is not anchored into bedrock, it has settled a bit & the dirt it's holding up has settled as well. The unfortunate part here is that the dirt it is holding up holds up a large portion of the patio and the dining room
. The engineer said that on one hand, the wall has withstood two good earthquakes and the second largest rainy season in recorded history, however, that doesn't mean that it will hold forever. He said that in a big earthquake, there is a good chance it will give & the patio, dining room, and laundry room will go with it & there's a possibility the rest of the house will be dragged down as well.
He said it could be re-enforced, but it could cost $50K+/- to do so.
The property is unique enough that if I had the money, I would buy it and fix it right, but I don't. There's a chance that the market will continue to rise & I'll have the equity for a fix in a year or two, but there are lots of people who think the market may stabalize or start coming down.
I need to back out by tomorrow to get my earnest money back.
To sum it up: on the positive side, there is a very good chance I will never find another place like this one - i's amazing & I absolutely love it.. On the negative side, there is a chance that if I don't get the wall fixed & there's an earthquake, the house may slide down the hill (possibly with me in it) and be destroyed.
What would you do - continue on the purchase or bail?