This document supersedes the prior bid stress test. It incorporates a 31-property Zillow-filtered comp set (>5,000 sqft lot, 2+ parking, sold 2025–2026), the verified 3230 NW 64th St gold-standard comp on the same block at the same lot dimensions, the live 7007 26th Ave NW Heaton Dainard relisting as a real-time market signal, and an honest reckoning with a four-bid losing streak in a market that is firming, not softening.
The bottom line: the original strategy doc was directionally right about ARV. My prior critique pulled the ARV anchor too low by leaning on arterial and small-lot comps that under-represented this property's lot quality. Recalibrated, Band 3 ($1.45M + ~$425K reno) lands roughly at break-even on day-1 ARV against a $1.85–2.0M honest exit. The contingent-offer playbook should be retired given four losses; what replaces it is front-loaded diligence in the 5–7 day pre-offer window, then a clean waived offer with eyes open.
Bid waived at $1.45M–$1.50M after completing pre-offer diligence in the 5–7 day window before the review date. Build the financial plan around a Band 3 reno (~$425K) producing a livable, family-functional craftsman with an honest post-reno ARV of $1.85M–$2.0M. At a $1.45M purchase plus $425K reno plus $40K displacement carrying cost, all-in lands at $1.915M against a $1.85M–$2.0M exit — roughly break-even to slight day-1 equity, well within tolerance for a 7–15 year owner-occupied hold.
The contingent-offer alternative is no longer the right call. Four lost bids in two years says clearly that the Seattle 4-bed market in this corridor does not reward contingent offers, and the live 7007 NW 26th Heaton Dainard relisting (asking $1.95M, expected to clear above ask within the week) confirms the cohort is firming rather than softening. Continuing the contingent-offer strategy through another cycle of losses costs more in option value, emotional drag, and time-with-rent than it saves in risk reduction.
What waived doesn't mean is blind. Pre-offer diligence — independent sewer scope, SDCI public-records request for the DADU correction letter, electrician walk for knob-and-tube mapping, structural engineer for foundation, asbestos and lead screens — all happens before any offer is submitted. If any of those surface a deal-killer, no offer goes in. If they clear, the waived offer goes in with calibrated risk.
The trade you're making: waived offers cost you the right to renegotiate after acceptance. They do not cost you the right to walk before submitting. Your job is to do enough diligence in the 5–7 day pre-offer window to decide submit-or-pass with honest information. The earnest money is the price you pay for surprises that demo would surface but pre-inspection cannot.
Four discrete inputs since the bid stress test moved the recommendation:
The prior comprehensive comps doc flagged 3230 NW 64th as "⚠️ unverified — same block, sqft and vintage unknown." Direct fetch of the Redfin listing fills it in: built 1908, 3,050 sqft, 5BR/3.5BA, 8,100 sqft lot, sold $2,500,000 on Sep 5, 2025. This is the closest possible apples-to-apples comp for a Band 4 outcome at 3244 — same block of NW 64th, exact same lot dimensions, near-identical vintage, renovated craftsman with preserved period details and luxury updates. It puts the ARV ceiling at $2.5M on this lot at this size with this character, which makes the original strategy doc's $1.85M anchor look conservative, not aggressive.
The 31-row Zillow set (>5,000 sqft lot, 2+ parking, 98107/98117, 2025–2026 sales, $1.0M–$2.6M) clusters mid-tier renovated craftsman quiet-street sales at $540–$691/sqft, median ~$610/sqft, with absolute prices $1.27M–$1.73M for 2,000–2,900 sqft homes. Apply that median to 3244 at 2,710 sqft post-Band-3 with $100K lot premium: $1.75M as a reasonable mid-tier-reno ARV, with the cohort upper end pushing toward $1.90M.
Heaton Dainard bought 7007 26th Ave NW in Oct 2025 at $1.12M as a deep fixer, did six months of permitted top-tier renovation, and relisted Apr 24 at $1,950,998. Three days on market at time of writing. Spec at relist: 5BR/4BA, 3,780 sqft (+980 from acquisition, almost certainly a basement ADU plus finish work). Peter's read on the market — that this clears above ask within a week — is the operative real-time signal. If it does, that anchors the renovated-craftsman-with-ADU exit at $2.0M+ and tightens the case that 3244's lot premium plus DADU optionality is genuinely worth what the original strategy doc said it was.
The contingent-offer playbook I had been advocating is what produced the four losses. Continuing it produces a fifth. The market in this corridor for renovated 4-bed craftsman or 1900s-era homes with quality lots prices waived offers significantly above contingent ones — particularly during sealed-bid review-date events, which is how 3244 will likely be marketed. The strategic question shifts from "how do we protect ourselves with contingencies" to "how do we substitute pre-offer diligence for contingencies so we can submit waived without taking on blind risk."
Honest correction to my prior take: in earlier turns I argued that the ARV anchor should be $1.55–$1.70M and that Band 4 was $300–$575K underwater on day 1. That was wrong. The arterial-discount thesis I leaned on was directionally right but quantitatively too small to overcome the lot-premium and renovation-depth differences. The Zillow data + 3230 NW 64th together pull the anchor back up to $1.85M–$2.0M for Band 3/4. Document and recommendation updated accordingly.
Direct same-block comp at the exact same lot dimensions as 3244. Sold seven months ago. The closest apples-to-apples reference point in the entire dataset.
3230 sold at $2.5M for what is essentially a Band 4 outcome at slightly larger spec (3,050 vs. 2,710 sqft post-reno). Strip out the value of view deck (~$50–100K), home theater (~$30–50K), finished garage with mini-split (~$30–50K), and roughly 340 sqft of additional finished area (~$200K at $600/sqft) — that's $310–400K of extras above what a Band 4 outcome at 3244 would deliver. Net: $2.10M–$2.20M is a defensible Band 4 ARV anchor for 3244 if you can replicate 3230's preservation-plus-modernization approach. Stripping further to a Band 3 outcome (no top-tier finishes, basic modernization, basement finished but not luxury) takes another $150–250K off, landing at $1.85M–$2.0M.
What 3230 demonstrates concretely: this lot, this block, west of 32nd, with original 1900s craftsman bones preserved through a thoughtful renovation, trades well above $1.85M when the work is executed properly. The ceiling is real; the work is the variable.
Each band assumes Apr 2026 Seattle contractor pricing, 10–15% contingency baked in, and is structured around the actual condition unknowns surfaced in the deep-dive: knob-and-tube risk, two-repair sewer history, no roof permit since 2005, no plumbing repipe, foundation unknown, asbestos and lead paint highly likely.
Sewer scope and any spot fixes, panel size verification, emergency K&T mitigation, water heater if old, basic asbestos abatement of active hazards, deep clean, paint, refinished floors, smoke/CO compliance. Live in the discomfort while you plan Phase 2.
Not for this family. A toddler and an infant in original 1904 wiring with possible asbestos in the basement is not a defensible call unless the inspection clears those specific hazards — which is a low-probability outcome on a never-renovated home of this vintage.
K&T replacement and 200A panel upgrade ($25–40K), high-priority plumbing repipe or full PEX/copper ($15–30K), sewer lateral replacement if scope shows it ($25–50K), roof if needed ($15–25K), functional kitchen update preserving footprint ($35–60K), one bathroom remodeled plus one cosmetic refresh ($30–45K), ductless mini-split heat-pump providing heat + A/C ($15–25K), asbestos and lead abatement ($10–20K), basement waterproofing ($5–15K), refinished floors and paint ($10–20K). 10–15% contingency layered on top.
The cash-conservation sweet spot. Every safety and insurability item is fixed. Period details preserved. Substantial Alteration threshold (~50% of building improvement value) not crossed, so no Energy Code cascade. Optionality fully retained for Band 3-equivalent layered work in years 5–7.
Everything in Band 2, plus full kitchen renovation with reconfigured layout, real cabinets, quartz, mid-tier appliance package ($75–110K); both bathrooms remodeled including a primary suite ($55–80K); finished basement adding ~280 sqft of living space ($80–120K); window replacement on south/west elevations or full window package ($25–45K); proper central heat pump with ductwork ($25–45K); insulation upgrade ($10–20K); period-detail restoration of original built-ins, leaded glass, trim. 15% contingency.
The financial sweet spot. Honest exit at $1.75M–$1.95M anchored on 7027 Alonzo NW ($1.58M @ $691/sqft Mar 2026), 7041 14th NW ($1.73M @ $597 Mar 2026), and 7040 16th NW ($1.46M @ $633 Mar 2026), plus the $100K lot premium 3244 carries. Roughly break-even on day-1 ARV at a $1.45M acquisition.
Everything in Band 3, plus top-tier finishes throughout (custom millwork, premium tile/stone, professional appliance package, designer lighting); full electrical service upgrade and complete rewire to current NEC; full plumbing repipe; complete window package; complete insulation/air-sealing to current Energy Code; high-efficiency HVAC; comprehensive period-detail restoration; possibly a small primary-suite addition ($150–250K marginal); structural / seismic upgrade if required.
The Energy Code cliff applies here. Once you cross ~50% of improvement value (~$120K of work on $238K-improvement-assessed) you trigger Substantial Alteration: insulation, windows, ventilation, ducting, sometimes seismic. About $200K of the Band 3-to-Band 4 step is code, $300K is finishes. Not a financial trade you should make unless you specifically value the top-tier outcome for your own enjoyment.
Band 4 plus actually building the DADU on the existing 1950 garage footprint after reviving permit 6972158-CN ($350–500K, includes pile foundation if soils require it); possibly a true addition above existing footprint; full landscape/hardscape.
Justifiable only on a clear plan to (a) live in the DADU and rent the main house, (b) rent the DADU for income, or (c) build family compound infrastructure for parents/in-laws. DADU rental at $2,500/mo = $30K/yr gross is ~3% on the marginal $1M before vacancies and management — doesn't pencil unless you live in it yourself.
Each cell is purchase + reno + displacement (where applicable), then compared to the band-specific Apr 2026 ARV anchor. Bold cells are the recommended bid range × recommended renovation band combinations.
| Band | Reno + Disp | ARV anchor | @ $1.395M list | @ $1.425M | @ $1.45M | @ $1.475M | @ $1.50M |
|---|---|---|---|---|---|---|---|
| 1 — Camp it | $50K + $0 | $1.10–1.25M | $1.445M | $1.475M | $1.500M | $1.525M | $1.550M |
| 2 — Light | $225K + $10K | $1.40–1.55M | $1.630M | $1.660M | $1.685M | $1.710M | $1.735M |
| 3 — Mid-tier | $425K + $40K | $1.75–1.95M | $1.860M | $1.890M | $1.915M | $1.940M | $1.965M |
| 4 — Top-tier | $675K + $50K | $1.95–2.20M | $2.120M | $2.150M | $2.175M | $2.200M | $2.225M |
| 5 — Max + DADU | $1.0M + $70K | $2.20–2.50M | $2.465M | $2.495M | $2.520M | $2.545M | $2.570M |
Recommended path: $1.45M–$1.50M acquisition with Band 3 reno target. All-in $1.915M–$1.965M against $1.75M–$1.95M ARV → roughly break-even on day 1, comfortably in the green over a 7–15 year hold at any reasonable Seattle appreciation. Band 2 stays the safety valve if cash position requires deferring full renovation; Band 4 is only the right call if Liz strongly prefers the top-tier outcome on personal-enjoyment grounds.
What the math tolerates: if you bid up to $1.50M and the diligence pushes the reno from Band 3 to Band 4 because of unforeseen items, you're still in the $2.20–2.25M all-in range against a $1.95–2.20M ARV — within reach of break-even and absolutely fine on a long hold. What it does not tolerate is a $1.50M+ purchase with a Band 4–5 reno where the reno overruns into the $800K+ range. That's where the math collapses.
Source: 31 sales from the Zillow filtered set (98107/98117, >5,000 sqft lot, 2+ parking, sold 2025–2026, $1.0M–$2.6M), plus targeted Redfin verifications for renovation depth and street character. Segmented into three honest cohorts to avoid the methodological problem in the prior strategy doc (which mixed renovated period homes with new builds and inflated the median).
| Address | Sold | Price | Sqft | $/sqft | BR/BA | Lot | Notes |
|---|---|---|---|---|---|---|---|
| Cohort A — Same-block / direct lot match (gold standard) | |||||||
| 3230 NW 64th St | Sep 5, 2025 | $2,500,000 | 3,050 | $820 | 5 / 3.5 | 8,100 | 1908 craftsman, period details preserved + luxury updates, view deck, theater, finished garage + mini-split. Same block, exact lot match. |
| 3042 NW 64th St | Oct 8, 2025 | $1,997,500 | 3,127 | $639 | 5 / 3.5 | 8,100 | 2021 ground-up new construction with built DADU. Direct neighbor; new-build cohort ceiling reference. |
| Cohort B — Renovated period homes, quiet streets (Band 3 ARV anchors) | |||||||
| 7027 Alonzo Ave NW | Mar 23, 2026 | $1,575,000 | 2,280 | $691 | 3 / 2 | 5,201 | Recent Loyal Heights renovation |
| 7041 14th Ave NW | Mar 23, 2026 | $1,725,000 | 2,890 | $597 | 6 / 3 | 5,001 | Larger renovated craftsman (14th is arterial — partial discount) |
| 7040 16th Ave NW | Mar 20, 2026 | $1,455,000 | 2,300 | $633 | 4 / 3 | 5,101 | Mid-tier renovated |
| 7558 12th Ave NW | Mar 11, 2026 | $1,335,000 | 2,070 | $645 | 4 / 3 | 5,419 | Mid-tier renovated |
| 6526 16th Ave NW | Mar 10, 2026 | $1,338,000 | 2,460 | $544 | 3 / 2 | 6,120 | Mid-tier, slightly larger lot |
| 6520 37th Ave NW | Jul 18, 2025 | $1,590,000 | 2,680 | $593 | 3 / 3 | 9,500 | Largest lot in cohort B; closest lot-size analog |
| 6511 32nd Ave NW | Dec 3, 2024 | $1,335,000 | 2,860 | $467 | 4+ADU / 2.25 | ~5,000 | 1913 fully remodeled craftsman with built ADU |
| 3056 NW 67th St | Jun 24, 2025 | $1,410,000 | 2,240 | $629 | 4 / 2 | 5,000 | 1908 mid-tier reno (NW 67th is arterial — partial discount) |
| 6746 27th Ave NW | Mar 4, 2025 | $1,267,000 | 2,120 | $598 | 4 / 3 | 5,101 | Mid-tier |
| 3211 NW 70th St | Mar 26, 2025 | $1,467,000 | 2,160 | $679 | 4 / 2 | 5,001 | Renovated craftsman |
| Cohort C — New construction (Band 4–5 ceiling reference) | |||||||
| 2817 NW 66th St | Aug 22, 2025 | $2,250,000 | 3,300 | $682 | 4 / 3.5 | 5,001 | 2017 transitional new build |
| 2809 NW 71st St | Feb 3, 2026 | $2,473,000 | 4,400 | $562 | 6 / 5 | 5,001 | Larger new-build spec |
| 3043 NW 69th St | Apr 18, 2025 | $2,400,000 | 3,220 | $745 | 5 / 4 | 5,001 | 2013 new construction |
| 6102 32nd Ave NW | Apr 3, 2025 | $2,430,000 | 3,804 | $639 | 6 / 4.5 | 5,001 | Recent new construction, SW corner lot |
| 7051 Alonzo Ave NW | May 23, 2025 | $2,300,500 | 3,760 | $612 | 5 / 4 | 5,001 | Likely new build |
| Cohort D — Unrenovated / fixer floor (as-is ARV anchor) | |||||||
| 910 NW 64th St | Feb 27, 2026 | $1,140,000 | 2,530 | $451 | 3 / 2 | 5,001 | Same street, lighter reno or unrenovated |
| 2769 NW 65th St | May 23, 2025 | $1,135,000 | 2,680 | $424 | 4 / 3 | 5,031 | Likely unrenovated (NW 65th arterial, low $/sqft) |
| 3026 NW 65th St | May 29, 2025 | $1,250,000 | 2,230 | $561 | 4 / 2 | 5,001 | Older / lighter reno (arterial) |
| Live signal — currently active | |||||||
| 7007 26th Ave NW | Listed Apr 24, 2026 | $1,950,998 ASK | 3,780 | $516 ask | 5 / 4 | 5,100 | Heaton Dainard flip — bought $1.12M Oct 2025, top-tier reno + likely basement ADU, relisted 3 days. Peter expects above-ask sale within a week. |
Cohort statistics (verified renovated period homes, Cohort B, n=10): median price $1.43M, median $/sqft $612, P25–P75 $/sqft $565–$652. Apply $612/sqft × 2,710 sqft + $100K lot premium = $1.76M honest Band 3 ARV. The new-build cohort (C) clusters around $612–$745/sqft on much larger spec, validating the Band 4–5 ceiling near $2.0–2.4M.
The clearest real-time market signal available right now. Heaton Dainard is a known Seattle flipper with disciplined underwriting; their decision to relist at $1,950,998 — instead of $1.85M or $2.05M — represents their internal estimate of where the renovated 1915 craftsman exit clears in this micro-market today.
Peter's read is that it sells above ask within a week. If that holds, three things follow:
What 7007 doesn't change: the 1904-envelope risks at 3244 are still real. The flipper's product is fully renovated, fully de-risked, no permits to pull, no surprises behind walls. Buying 7007 at $2M is a different transaction than buying 3244 at $1.45M plus reno. They're approximately equivalent in total spend but very different in time-to-livable, control over finishes, lot quality, and zoning optionality.
The single highest-leverage diligence item. Two repairs in 30 months from two different contractors at two different sections of original 1904 vitrified clay tile — the pattern of the repairs is the tell. Pacific Trenchless's June 2023 CIPP relining only works on sections with intact pipe geometry; they picked the easy fix. Bob Oates's December 2025 spot repair plus cleanout install at a compromised section near the foundation is essentially the contractor saying "you're going to need to access this again."
| Probability | Likely finding | Cost impact | Triggers |
|---|---|---|---|
| 10–15% | Best case — holding, defer 5–7 years. 2023 CIPP and 2025 spot repair are doing their job. Acceptable flow with manageable root intrusion. | $0–10K immediate, $25–35K eventual | None — bid normally. |
| 60–70% | Most likely — full lateral replacement to property line, deferred 2–7 years. Root intrusion at multiple joints downstream of the spot repair, one or two minor bellies, original pipe in fair-to-poor condition outside the repaired sections. | $20–40K (deferred or now) | None — fits inside Band 2/3 reno budget already. Bid normally. |
| 20–25% | Bad case — ROW work needed. Lateral has failed or is collapsing in the public right-of-way between property line and main. Requires SDOT permit, pavement cut, restoration, SPU coordination. | $40–70K, 6–12 weeks permitting | Negotiate $30–40K seller credit at acceptance, or drop the cap by that amount, or walk pre-offer. |
| 5–10% | Worst case — foundation-proximate failure. Section under the foundation footprint needs work. Either tunnel under footing or replace through basement slab. Structural engineer involvement. | $60–100K plus engineer | Walk pre-offer. Don't submit. |
Independently obtain the December 2025 Bob Oates internal job report via Maggie Mallett — what they actually saw before the spot repair, not just what they fixed. That document is dispositive on whether the repair was ahead of failure or a band-aid on a worse problem.
Probability-weighted budget: ~$30K expected value, with the right tail going to $60K+. Build a $35K post-close reserve specifically labeled "sewer." That sits inside the Band 2/3 reno totals already; it does not require extra cash beyond the recommended renovation budget.
The substitute for inspection contingencies. Everything happens before the offer goes in. The decision tree at the end of the window is binary: submit waived, or pass.
permitcheck@seattle.gov for permit 6972158-CN correction letter (this is the bottleneck — 5–10 business days). Schedule independent sewer scope (not Bob Oates) for Day 1–2. Schedule pre-inspection event with: generalist inspector + electrician (K&T mapping + panel) + structural engineer (foundation walk) + roofer for age estimate. Order asbestos and lead paint screens.
Critical clarification on "walk before signing": in a waived offer, your right to walk ends at mutual acceptance. Once the seller signs, you can only exit by forfeiting earnest money ($45–75K). The diligence in the 5–7 day pre-offer window is what gives you the right to not submit — that's the walk. There is no post-acceptance walk in this strategy except via EM forfeit. This is why the SDCI letter timing matters: if it doesn't arrive before review date, you're choosing between bidding blind on that one variable or passing.
Bid waived at $1.45M–$1.50M after pre-offer diligence clears. Open at $1.45M; allow Maggie to read the room and step up to $1.475M or $1.50M only if the comparable bid intelligence supports it. Hard EM 3–5% ($45–75K). Twenty-one day close. Financing contingency only if your lender requires it; otherwise fully waived. Appraisal-gap addendum up to $50K. Cover letter from Liz.
$1.45M–$1.50M acquisition is supported by the recalibrated cohort math. At $1.45M + Band 3 reno $425K + displacement $40K = $1.915M all-in against $1.75M–$1.95M honest ARV → roughly break-even. At $1.50M + same = $1.965M against the same range → modestly underwater on day 1, but recovered within 1–2 years of normal Seattle appreciation on a long hold. Above $1.50M starts pushing the math past the comfort zone unless the SDCI letter clearly enables Band 5.
Band 3 as the renovation target is where the math works hardest. Band 4 produces a slightly higher ARV but spends roughly 1.7× the cost to capture maybe 1.2× the value — bad ratio. Band 2 preserves cash but requires a long quiet-time before any meaningful Phase B work; family-acceptable but financially weaker. Band 3 hits the family-functional, financially-coherent middle.
Waived rather than contingent because four lost bids says the contingent playbook does not work in this market for this product. The right substitute is front-loaded diligence, not contingent terms. Earnest money is the price you pay for surprises that demo finds and pre-inspection cannot — sized at $35–75K, that's manageable insurance for the upside of finally winning a bid on the right house.
Lead with cap. If asked for "best and final," the answer is "$1.50M is our best and final number; we will harden another $20K of EM and shorten close to 18 days, but we will not extend the close window because we need it for items the pre-inspection could not access." Do not raise price beyond $1.50M. Do not shorten close below 18 days unless your contractor explicitly says they can mobilize that fast.
Cover letter should foreground: family with two small kids who will walk to Adams Elementary; commitment to preserving period details (box-beam ceilings, leaded glass, original built-ins) rather than gut-renovating them; Peter and Liz personally will live in the home, not flip it; appreciation of the 30-year-hold seller's care for the property. This narrative is worth $15–30K of price-equivalent in front of a Maggie Mallett seller, in our honest read — not the $50K the original strategy doc implied, but real.
Hard triggers, ordered by likelihood:
The pattern: walk on items that aren't already in the band budget. Don't walk on items that are.
Added 2026-04-27 PM after the seller voluntarily shared a 45-page pre-listing inspection report (NW Certified Home Inspections, prepared Feb 20, 2026 for an earlier prospective buyer "Martin Fox") plus three Bob Oates Sewer Rooter invoices documenting $12,740 of December 2025 sewer work. Buyer also completed an in-person walkthrough with a general contractor between sections 1–11 and §12.
Per the Bob Oates invoices, the property owner is Eric Smith, phone (209) 399-0002. Area code 209 is California's Central Valley (Modesto/Stockton corridor), consistent with the 30-year-hold-with-California-ties hypothesis. Listing agent Maggie Mallett has signaled to the buyer's agent that Eric expects developer offers but prefers a family buyer. This is gold and should drive both the cover-letter strategy and the credit-ask posture.
The Section 8 probability table was right about the *risk* (collapsed-line scenario) but the December 2025 work addressed only the catastrophic-failure section, not the entire lateral. Reading the Bob Oates invoices closely:
Total addressed: ~35–40 feet of repaired/relined lateral plus one new cleanout. A typical Seattle side sewer runs 60–100+ feet from house to main; this property's 8,100 sqft lot west of 32nd Ave likely puts the lateral toward the high end. The portion in the public right-of-way and the segments outside the 30-foot CIPP run are still original 1904 vitrified clay tile, untouched. The 20-year transferable warranty covers Bob Oates's specific work, not the rest of the line.
Practical implication: The big-bang failure has been addressed and warrantied — that's a genuine plus and worth ~$15K of bid headroom against the prior probability table. But Section 8's "needs full lateral replacement deferred 2–7 years" outcome is still the most likely state of the *unrepaired* segments, including the public ROW segment. Independent sewer scope of the untouched portions remains a pre-offer requirement, performed by a contractor that is not Bob Oates (they have a financial interest in the warranty). Budget another $15–30K for the remaining work, deferred.
The Martin Fox inspection (Ken Harper, NW Certified Home Inspections, $825 fee, Feb 20, 2026) is detailed. Full severity-tiered analysis is in the companion file 3244-NW-64th-inspection-analysis.md. The summary here:
Insurability and lender-financing items (must address pre-occupancy or as condition of close): Zinsco main service panel — known-defective brand, most carriers will not insure as-is and most lenders will not fund without remediation. Active knob-and-tube wiring with insulation contact in the attic — a near-universal insurance refusal. 60-amp submain on a 120/240 split panel — undersized for any modern HVAC + appliance load. No GFCI protection anywhere. No carbon monoxide alarms (Washington law violation, seller-disclosure issue). Buried fuel-oil tank risk — typical for 1904 homes, not investigated.
Capital items (Band 3.5 budget): Galvanized water supply lines past life with active galvanic corrosion. Iron and galvanized waste lines past life with one active leak below the main bathroom tub causing rotted floor joists. No visible foundation bolts in either crawlspace or basement (seismic). Efflorescence on basement foundation walls indicating periodic moisture. 15-year-old water heater. 13-year-old furnace with rust in burner compartment. Roof "serviceable but within useful life" with moss, exposed nails, cracked vent boots. Wood stove and fireplace lack approved chimney liners.
Pest and moisture: Carpenter ant tunneling at deck and below entry stoop wood framing (no active activity). Rodent activity in crawlspace with damaged insulation. Active leak rotting floor joists below main bathroom.
Cosmetic and deferred: Failed wax ring at main toilet (~$200 fix). Loose vanity and utility sink. S-trap at kitchen sink. Various fixture and finish issues that fall into renovation scope anyway.
The buyer walked the property with a general contractor and reports: GC was excited about the project; some K&T appears to have been previously updated and only sheetrocked over (not entirely active wiring); cedar shingles are in great condition; the renovation plan is full guts on floors, kitchen, upstairs, and bathrooms with selective window replacement.
This changes three line items materially:
The buyer's actual planned scope (floors + kitchen + upstairs + bathrooms guts + selective windows) is between Band 3 and Band 4 in the framework above — call it Band 3.5. Real numbers based on the GC walkthrough and the inspection:
| Line item | Range | Notes |
|---|---|---|
| Electrical (sheetrocked K&T → partial rewire + Zinsco panel + 200A submain) | $15–22K | Down from $25–35K full rewire — GC confirmed |
| Plumbing — galvanized supply + iron/galv waste repipe | $25–40K | Active leak below bathroom tub forces this |
| Sewer balance (rest of lateral + ROW segment, deferred 3–7 yr) | $15–30K | Reduced by Bob Oates's 35–40 ft work |
| Foundation bolting / seismic retrofit | $15–25K | NEW vs. original Band 3 — inspection surfaced this |
| HVAC — heat pump + ductwork + condenser | $25–45K | Furnace mid-life, water heater past life |
| Floor refinish / replace | $15–30K | Buyer's "guts" scope |
| Kitchen full gut, mid-tier finishes | $80–110K | Buyer's "guts" scope |
| Both bathrooms full gut + master | $55–80K | Plus the rotted-joist repair $5–10K |
| Upstairs gut (bedrooms + hall + walls + ceilings) | $40–70K | Buyer's "guts" scope |
| Window replacement (Polish import — see §12.6) | $40–60K | $80–120K with US suppliers; saves $30–40K |
| Cedar shingles | $0 | GC confirmed great condition |
| Insulation upgrade (attic + crawl + basement) | $10–20K | Inspector flagged minimal attic insulation |
| Asbestos + lead abatement during demo | $10–20K | 1904 home — both highly likely |
| Buried fuel-oil tank scan + decommission if found | $3–15K | Inspector flagged; not yet investigated |
| Carpenter ant remediation + rodent abatement | $5–10K | Documented but no active activity |
| Period detail restoration (built-ins, leaded glass, trim) | $10–20K | Cover-letter narrative reinforcement |
| Chimney liners + cap (wood stove + fireplace) | $3–6K | Inspector flagged; insurance/code |
| 15% contingency on hard scope | $55–75K | Reduced from 18% — GC walkthrough lowers uncertainty |
| Total Band 3.5 renovation | $420–675K | Midpoint ~$550K |
That's $125K above the original Band 3 midpoint of $425K, but well below Band 4's $675K. The mix is the operative thing — Band 4-quality interior outcome (full kitchen + upstairs + baths gut) at Band 3-adjacent cost, because cedar shingles are $0, sheetrocked K&T cuts the electrical, Polish windows cut the window package, and the seller's $12.7K sewer investment cuts the sewer.
Buyer plans to import windows from Poland to manage the window-package cost. This is a strong move for a 25–30 window 1904 craftsman renovation. The economics:
Egress-rating caveat: European casement windows often ship with default dimensions that don't meet US bedroom egress codes (Seattle requires 5.7 sqft clear opening, ≥24" height, ≥20" width, ≤44" sill). Drutex sells US-spec windows but they're not the default — explicitly specify the egress-rated configuration when ordering, especially for upstairs bedrooms. Confirm dimensions match the US-spec sticker on each unit at delivery before installing.
Timing implication: Polish windows have 8–12 week lead time + 4–5 week ocean shipping = roughly 14–17 weeks from order to delivery. That's manageable in a 9–12 month renovation but only if the GC orders during demo, not at the end. Add this as an explicit milestone in the renovation timeline.
The recommendations in §10 narrow toward the buyer because the GC walkthrough has reduced renovation uncertainty and the seller is more flexible than the §10 recommendation assumed:
| Item | Section 10 (am) | Section 12 (pm — updated) |
|---|---|---|
| Bid range | $1.45–1.50M | $1.43–1.48M |
| Repair credit ask | None modeled | $30–50K (anchor at $40K) |
| Net to seller after credit | $1.45–1.50M | $1.39–1.44M (still above developer floor of ~$1.40M) |
| Renovation budget | $425K (Band 3) | $550K (Band 3.5) |
| Displacement carrying cost | $40K | $50K (longer reno timeline) |
| All-in @ midpoint $1.45M purchase | $1.915M | $2.05M |
| ARV anchor | $1.85–1.95M (Band 3) | $1.85–2.05M (Band 3.5) |
| Day-1 spread @ $1.45M | −$15K to +$135K | −$200K to ±$0 |
The day-1 spread looks worse on paper because the renovation is bigger — but the renovation is bigger because this is the renovation Peter and Liz actually want, not the financially-optimal one. At a 7–15 year hold with normal Seattle appreciation, the +$135K of additional renovation cost (Band 3.5 vs. Band 3) is more than absorbed in 18–24 months and you end up with a better house. The right way to read the table: at $1.43–1.45M purchase with a $40K credit, you're at break-even to slight day-1 underwater on Band 3.5 numbers — that's an entirely defensible owner-occupied position.
The seller's transparency in sharing the inspection and the sewer invoices, combined with the explicit "prefers family" signal, makes a meaningful credit ask appropriate. Recommended ask, prioritized by likelihood-of-acceptance × magnitude:
| Credit category | Ask | Justification |
|---|---|---|
| Electrical remediation (K&T + Zinsco) | $10–15K | Insurability blocker; lender will require |
| Plumbing (galvanized + active leak rotted joists) | $8–12K | Active defect documented; not aesthetic |
| Foundation bolting / seismic | $5–10K | Inspector recommended; safety |
| Buried oil tank investigation | $2–5K | Seller hasn't investigated; risk transfer |
| Carbon monoxide alarms (state law) | $0.5K | Required by RCW; seller obligation |
| Wax ring + utility sink + S-trap (active defects) | $1–2K | Inspector documented; small but symbolic |
| Total ask | $26–44K | Open at $40K; settle at $25–30K |
Posture: "We've reviewed the inspection you shared and we appreciate the transparency. We're committed to a Band 3.5 renovation that preserves the period details and we're not asking for credits on items already in our renovation plan. The credit ask covers the items that affect insurability and lender financing (electrical and plumbing) plus the items the inspector explicitly flagged as safety concerns (foundation, oil tank, CO alarms). Net to you after credit is $1.39–1.44M, which is above what we believe the developer-offer floor is for this lot, and we'll close in 21 days waived."
Section 9's pre-offer diligence list shrinks (the seller has done a lot of it for you) but doesn't go to zero. Items still required:
What's removed from the prior list because the seller has effectively done it: full-house pre-inspection (Martin Fox covered it); review of December 2025 sewer work (invoices in hand); buyer-funded inspection event (have the report).
Even with the credit ask, the recommendation stays waived. Reasons: (a) the inspection report is comprehensive and the seller-funded diligence is complete, so the buyer's pre-offer diligence is mostly already done; (b) the GC walkthrough has reduced uncertainty meaningfully; (c) Peter has lost 4 prior bids in 2 years on contingent offers — the playbook needs to change; (d) the credit ask is the substitute for inspection-contingency renegotiation in this transaction shape; (e) earnest money is the cost of accepting that demo will surface things pre-inspection didn't.
permitcheck@seattle.gov · permit 6972158-CN (DADU)