Home Buying Warfare

April 7, 2016

The hidden enemies of home buying.  Your Enemy: Outdated electrical panels



I recently ran into a problem when I was flipping a house that a home inspector pointed out.  I thought it was an isolated event and then about two houses later the same exact problem popped up.  The problem was that the electrical panel was an outdated brand that was known for causing electrical fires. 


Enemy: Outdated electrical panels

Why it’s an issue:  Fire hazard

Likelihood of finding it: Likely in older homes between 1950 and 1990

Cost to fix:  Reasonable


There are two major brands of electrical panels that are known to have safety risks.  Those brands are Zinsco and Federal Pacific.  Oddly enough, I bought a house with a Zinsco panel, learned it was a problem and kept an eye out for them.  Two houses later I bought a house with a Federal Pacific panel and realized that brand was an issue as well.  If you run across an electrical panel in a home you are considering with either of these brands, you should budget to change the panel.  I would recommend just changing the panel even if a licensed electrician were to tell you it is safe.  If you’re planning to flip the home, a buyer will likely get an inspection.  The home inspector will undoubtedly write some pretty strong language in their inspection report about the panel being a fire hazard.  This has potential to spook the buyer, realtor, lender etc.  If you go ahead and budget to change the panel out before you get to that stage you won’t have to go through the stress of a bad inspection report and potentially losing a buyer.  There is also the benefit that once the panel has been changed you’ve removed the potential of a future problem arising.  That could save you a liability headache in the future.




What to look for:

Knowing what brand of electrical panel you have should be fairly straight forward.  The branding is going to be written somewhere on the panel.  It may be on the front of the panel or on the inside of the door.  Make sure you check all panels in the house.  Sometimes the main panel could feed a smaller sub panel.  Any one of those panels could be a Zinsco or a Federal Pacific. 


How to fix and costs of fixing:

For me this was a pretty easy fix.  I hired a licensed electrician and had them swap out the panels.  You’ll probably need to pull a permit to do this so keep that in mind as well.  The cost for me was about $1,200 per panel that I swapped out.  That included the permit as well.  Talk to your electrician about the financial consequences of getting a permit too.  They will have a good handle on what the current code is and what additional items the municipality may require.  They should be able to give you an idea on how much more those items will cost.  Some areas are stricter than others on building codes.


Happy home buying



About the Author:


Daniel Smith is the Owner/Broker-in Charge of Red Link Realty a Lexington, North Carolina based real estate firm.  Daniel uses his real estate knowledge to help both prospective home buyers and sellers with their real estate transactions.  Daniel has been investing in residential rental properties and house flipping since 2008.  www.redlinkrealty.com





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