Most people I meet don’t know that in California, every home is sold as is. It’s sort of a presumption that the seller will make repairs but this is not always the case. Why should a seller make any repairs then, if they are not required to? The obvious answer is that they want to sell the home and given the choice of some small fixes or having their buyer walk, sellers in general opt to make some repairs. Another common misconception is that the inspection is always paid by the buyer. While almost always true in Southern California, in the San Francisco Bay Area, it is actually the other way around. In San Francisco for example, the seller will pay for the inspection, make any repairs they want and then include the inspection report and repairs made with the original listing information. From there a buyer will probably not do a full inspection and unless there is something incredibly wrong with the property, write their offer as is. It’s actually a fairer way to sell and buy when you consider the requirements of full seller disclosure and the oft misguided use of the Request For Repairs as a means for a buyer to renegotiate the original offer (by asking for some huge cash credit to close).
When I have a buyer write an offer, we discuss the issue of inspection and disclosure. I explain that the seller is required to disclose anything that can materially affect the value or desirability of the property. I recently sold a home that the seller repaired a ceiling leak a week before we went on the market. A pipe all of a sudden started to drip, a stain was formed and the seller repaired it. In doing so they painted the spot on the ceiling. Thus the repair was invisible. Why they asked, should they tell the buyer about it then? I explained that any buyer that would back out because of this disclosure, is the very buyer we want to tell, for if we didn’t and they found out later, we’d all get sued. So tell them and let them back out if that’s what they want to do. Disclosure is the best way to stay out of trouble.
Every home, even a brand new one, should have a home inspection. I tell my buyers that the inspection is our “first line of defense.” If for example, on the inspection the inspector points out staining in the attic, this would trigger a roof inspection. A roof inspection costs about $350. If there is no evidence of leaking and either the home is less than 20 years old or the roof is, why spend the money? If the inspector doesn’t find evidence of water intrusion, why do a mold inspection? On the contrary if the find a sink appears to have been leaking for a long time, now a mold inspection may not be a bad idea. If there’s no major cracking or all the doors close just fine, why pay $500 for a structural engineer? You see, the inspector is going to go through home with a fine toothed comb. In doing so they will find things and depending on what they find, will determine whether there’s a need for subsequent investigation and inspection. That said, if a client has a child with asthma or some other specific health concern, things like mold inspections may be a good idea if for nothing else, piece of mind.
How does one choose an inspector anyway? Naturally I have my list of preferred vendors and more often than not my clients defer to my judgment. Is there risk in this for me as the referer? You bet. However I believe that the risk is lowered by my knowing a host of good inspectors from which my clients rely, as opposed to the Yellow Pages, Yelp or “my friend is a contractor and he’ll check it out for me.” A good thorough inspection should take about 3 hours on an average 4 bedroom 2000 square foot home and cost between $400-500. If the home is a raised foundation it will be more. If it significantly larger or has a pool it can go $600 and if it is a giant 7000+ square feet, expect around $1,000. Interestingly I have seen inspections take as little as 45 minutes. When this happens and it only happens when I represent the seller because I don’t use that kind of inspector, I tell my seller that this kind of inspection is great when you’re the seller, not so great if you’re the buyer. Like a doctor or attorney or even a Realtor, you really don’t want to go with the cheapest one out there. Money spent on an inspection is some of the best money you’ll ever spend.
So what types of things typically show up on an inspection? Obviously the age of the home has a lot to do with this. A home built in the 1990’s is going to have different issues than one built in the 1940’s. Where I sell, most of the homes were built after the 1960’s so by and large they have a lot of the same issues. If it was a Viet Nam era built home, there is always concern over aluminum wiring. Copper was in short supply in the late 1960’s early 1970’s and many builders turned to aluminum and a substitute. Aluminum would be fine if it weren’t for the fact that it heats at a different rate than the electrical panel and this can cause a gap between the wire and the screw causing arcing and this can cause a fire. Galvanized plumbing is notorious for building up deposits that eventually slow the flow of water. Clay sewer lines crack; tree roots can be an issue in older homes too causing slow drains and back up. What about in newer homes? Typical problems here have to do with builder’s contractors who take short cuts or City inspectors who don’t read manufacturer specs. For example many attic forced air units (furnaces), are set directly up wooden platforms. Most manufacturers want a sheet metal barrier put down and metal supporting feet. Is this something that is commonly asked for? Yes. Double lugging, though really common, is not allowed either. This is where the electrician put two wires on the same screw in the panel. An easy fix but one that is important. Sprinklers spraying the house, that’s a commons one. Does the seller always fix? Not so much. Water heaters, air conditioning, the list of possible corrections is seemingly endless, so where does a seller draw the line and what should a buyer be asking for?
I always advise my clients that “health and safety” is and should be a point of discussion. If something is a fire hazard, could cause mold or cause someone to get hurt, these are things a seller should be responsible for. Cosmetic things like bad caulking are Ok to ask for but cracked tiles, chipped stucco or a difficult to operate door handle, again, not so much. Do buyers sometimes ask for the moon and stars on their request for repair? Yes they do. How a seller responds really depends on the market condition at the time; is it a buyer’s or seller’s market? Also how difficult are the fixes? Many times the nickel and dime things are one afternoon with a handyman and a few hundred bucks. Hardly worth fighting over. Your agent should be there with you and have a working knowledge on the costs estimates or at least have the trades available to refer you to.
So if you’re buying be diligent and practical. If you are a seller, ask yourself what you would want the seller to fix if you were the buyer. I tell every buyer and seller that there are two negotiations with each transaction: first is price and terms; (what’s the price, how much down, what’s excluded, when do we close etc.?) The second is the request for repair. It’s always the more difficult of the two. But if you keep your eye on the prize, the prize being a successful close, the repair request is manageable and a smooth transaction that much more likely.
Published on 2014-03-02 09:57:39