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January 24, 2011

For California Home Buyers and Sellers: New Editions of Nolo Books

What's so special about California real estate? Well, lets see: This state requires sellers to disclose more to buyers about the condition of the property than most other states do; its real estate market requires careful local study, with foreclosures the norm in some areas and bidding wars still taking place in others; and because California law doesn't require lawyers to be involved in the transaction, it gives buyers and sellers good reason to find a great agent and educate themselves about the process.

And that's just the beginning. (Notice I didn't even mention researching whether your house -- or prospective house -- is on an earthquake fault line?) All of these are among the many topics covered in the latest editions of Nolo's popular books, How to Buy a House in California and For Sale By Owner in California -- recently updated with the latest on legal requirements, market trends, mortgage options, and more.
November 1, 2010

Buying Foreclosure Homes: Unexpected Risks

Back when the foreclosure crisis was fairly new, we thought we knew the basic risks: the frequent requirement that the home be purchased "as-is" without an inspection; poor home conditions; processing delays; and the risk that the homeowner would, within a legal time period, pay off the debt and reclaim the house.

Turns out those were just the basics. Check out these two excellent articles by Ron Lieber of The New York Times: "Avoid Foreclosure Market Until the Dust Settles,"  and  "What It Takes to Buy a Home in Foreclosure;" for accounts of other crazy situations faced by buyers of foreclosure homes. Battles to keep out squatters, sabotage by the departing angry owner (with home inspectors are having to learn to look for cleverly hidden damage like concrete down the toilet), and unhappy discoveries of other, major debts against the property are just a few of the highlights. Not a task for the faint of heart.
August 22, 2010

Home Repairs: Deal With Before You Move In, or After?

Like many homebuyers, we discovered during the course of the inspections that our new home-to-be wasn't entirely perfect -- in fact, it really needed a whole new foundation if we wanted a decent chance of surviving the next earthquake. (Not too surprising for a house that's nearly 100 years old.)

That led us to the same question many others have dealt with: Do the work right away, in the midst of all the craziness of moving, or wait a bit?

Of course, for some people, there's no choice, because their mortgage lender insists that the work be done before funding the loan. But our lender wasn't requiring this. So for us, the pros and cons looked something like this:

ADVANTAGES TO DOING WORK RIGHT AWAY:
1) Our lives were already in chaos, why not add a little more?
2) Once the work was done, we'd be able to settle in, hang paintings, and repaint if we wanted to, without having to undo it all and repaint over new cracks in the walls after the foundation work was done.
3) We could avoid buying earthquake insurance (which many homeowners with solid new foundations forgo)

DISADVANTAGES TO DOING WORK RIGHT AWAY:
1) The weather. It was one of the rainiest winters in my memory, which would have made it nearly impossible to store things outside that would have, but for the foundation work, normally been in the basement.
2) We didn't know anyone who'd need a house-sitter in January -- whereas, by waiting, we could house-sit for friends on summer vacations if the noise and chaos of construction got to be too much.
3) We'd have a chance to regroup, cash-wise. We moved into our new house before selling the old, which was already a financial challenge. We didn't want to be down to our last dollar when the inevitable new costs arose ("Hey, how about we replace your old, cracking floor slab while we're at it?")

So, three against three -- and we decided to wait. Mostly glad we did. We keep looking at the surrounding chaos, with a trench all around the house, deep holes underneath, and dirt piles in our back yard, and saying, "Can you imagine doing this in the rain?" fdn.JPG 

But it does sometimes feel like we're moving all over again. And we did end up house-sitting for friends. (Thanks, guys.)

A foundation removal is a big deal -- there was dust pouring through cracks in the house we didn't know existed. It was shooting up behind the mantel! And the downstairs plumbing had to be disconnected for nearly a week.

Does this lead me to any advice for others? Nope, I'm afraid there no universal answer. Wait, there's a better way to put that: There's no wrong answer. Do what feels more comfortable, and expect some chaos either way!

March 23, 2010

Home Seller Disclosures: Don't Wait Until Last Minute!

Having recently sold my house, I had to be grateful that the State of California has created a form with which to make the mandatory seller disclosures. Grateful for having to fill out yet another form, you ask?

Yes, it might sound odd, but I've read and written enough Nolo books to know that not only is providing full disclosures the law, but that it's far better for buyers to learn stuff ahead of time than be unpleasantly surprised later.

And here's the thing: After having lived in our house for ten-plus year, we'd fallen into the common rut of having become somewhat blind to its minor repair needs. That side door that had a little trouble opening? Oh, right, but we'd always used the nearby back door. The oven door that didn't quite close? That's what the nearby broom handle was for!

It was a shock to realize that, even when I wanted to give the prospective buyers a full set of disclosures, my memory was slow to cooperate.

Good thing I started a draft of the form a few days before we were to meet with our Realtor. And still, we remembered a couple more things while sitting in her office filling out the final version. But it was only the next day when we remembered the crack in the front door.

Remembering house defects after having filled out the disclosure forms doesn't excuse a seller from having to tell the buyers. This could have involved both hassle and embarrassment if we'd needed to amend our disclosures, but luckily, our Realtor still hadn't filled out her version of the disclosure form. She added the aforementioned crack to her list. 

Whew. Now you see why my opening advice was, don't wait until the last minute to fill out the form! 
January 13, 2010

Why Home Buyers and Sellers Remain Cautious

Today we have a guest blog from George Devine, author of For Sale By Owner in California and co-author of How to Buy a House in California. George is also an adjunct professor in the School of Business and Professional Studies at the University of San Francisco.

 

When asked how I'd describe the real estate market as we begin 2010, the word that comes to mind is "caution." Both buyers and sellers are waiting to see what will happen next, and trying to avoid making impulsive or risky decisions.

 

If the current state of the economy and home prices weren't enough to make people cautious, anyone with friends or a newspaper can find instances of how overly eager buyers and sellers got themselves into trouble just a few years back.


For example, when Alan and Jill found their dream house in 2006, and figured  they could stretch their finances just far enough to make the payments, they decided to accept the inspection reports that had already been provided by the sellers and their agents. After all, they reasoned, why spend another several hundred dollars to reinvent the wheel?

 

Almost three years after closing, the home is worth 25% less than what Alan and Jill bought it for and they are saddled with a money pit in terms of needed repairs. Everybody is suing everybody else. Alan and Jill allege the structural pest control inspections were really cover-ups, and both they and the sellers claim their agents failed to protect them.

 

This kind of thing creates a lesson for present-day buyers who - usually with help from protective agents - now more commonly insist on "another set of eyes," by having their own inspections done. For a few hundred dollars, they're buying peace of mind, and possibly opening the door to negotiating an adjustment to the purchase price. With the market still slow, sellers have little choice but to go along with the buyers' wishes in this regard.

August 3, 2009

Dreamed of Buying a House by a Golf Course? Read This First

Yesterday, while out on a quest for the elusive urban blackberry, I stopped to admire the view over a chain link fence into a local golf course. Compared with busy Oakland, the green rolling lawn and elegant clubhouse looked like a mirage from another time.

But my next thought was, "What are the odds that a stray golf ball will come flying at my skull?"

If you've ever contemplated buying a house by a golf course -- and perhaps been additionally tempted by low prices by developers eager to move their properties -- you should be weighing both types of sentiments. And as for those odds, check out this article from Steve Pajak, of The Sacramento Bee.

My favorite account is of the guy who was told upon buying that golfballs would hit his house "occasionally," and it's turned out to be ten times a day on average. But the article also offers some useful tips on safest locations in relation to the course.

March 12, 2008

Be Wary When Buying a Home With a Deck

pr-post-crawl-0406.jpgGetting It Done. Paul A. Rude, retired General Contractor and member of the American Society of Home Inspectors, answers your questions on remodeling, dealing with contractors, and home maintenance.

Oh, boy, here we go again. A house I inspected for prospective buyers a few days ago had one of the "red flags" that give ASHI inspectors the willies: a big tiled deck with a view of the San Francisco Bay. This would surely be an asset, yes? Well yes, if it's properly designed and built. The problem is that a very large percentage -- 90% or more in my experience -- are not done properly, so they leak into whatever is below them. If your master bedroom is underneath, you're not going to be happy with an installation that's less than perfect.

Decks with a hard surface such as concrete, tile, or stone are often called "plaza decks" or "paved decks" by architects. The problem is that contractors and designers too often assume that such surfaces are waterproof. But concrete, mortar, tile grout, and similar materials absorb water. Once moisture gets past the surface, it will find its way into the structure if the waterproofing system is inadequate. When I see one of these, whether new or old, I tell my clients to ask for a warranty against leaks.

These decks are a nightmare for inspectors because it can be hard to explain how something can go wrong with a brand new, stunning, and very expensive architectural feature. In my recent inspection, the sellers, who had installed the deck and were "flipping" the house, got more than a little testy when I questioned their work. My client's agent made a note not to call me for inspections again, either. But defects in a deck can be extremely expensive to fix, so my responsibility to the client is my overriding concern.

Most of the critical details in a paved deck are concealed by the time a home inspector gets there, so we can only judge by the few visible clues. Below are some of the key things we look for.

Missing or improper flashings between the deck and adjacent walls. Flashings are transition pieces, usually of metal, that protect intersections in a roof. Oh yeah, by the way: If the deck is over a space that needs protection from the weather, it is a roof. It's easy to forget that when you're counting all the big bucks you're going to make from your flip.

Adjacent walls with improper waterproofing. One very common mistake is to bring the adjacent wall surface - stucco, shingles, or other siding - right down onto the deck. This is a great recipe for trapping water. We see this most often with stucco because builders -- and even some architects! -- still think it's waterproof. We want to see a separation of about 2 inches between the horizontal and vertical surface, with flashings visible between them.

Conspicuously absent flashings. Builders often figure that they don't need no stinking flashings because they are installing a "bulletproof" waterproofing membrane below the paved surface. They turn this membrane up the wall, cover the top edge with siding, and call it good. Problem is, most of these membranes deteriorate under ultraviolet light (that would be sunlight). Someone who took the time to read the manufacturer's specs would know that, but who reads? Even with materials approved for exposed installation, it can be tricky getting them to fit around corners and obstacles without creating bad seams.

Poor flashing at thresholds leading onto the deck. In better installations, a "pan flashing" is installed below a threshold; it normally extends to the interior side of the threshold and several inches up behind the jambs. Off-the-shelf pan flashings are sold in lumber yards, but a good one has to be made to specification in a shop. This is not terribly expensive -- it might add $150 or so to the cost of a $5,000 door -- but it requires actual thinking, a commodity all too rare in remodeling, as the flashing must be installed before the door goes in.

Absent drainage. We always look for a way for water to escape, both from the deck surface and from below it. The surface should slope to drains or gutters; just letting water flow over the edge and down the wall is certain to cause leaks. Drainage is also needed between the waterproofing membrane and the finished surface. This can be a corrugated plastic sheet, fine gravel, or other permeable material. It has to slope to a drain or gutter, which means that the supporting structure itself needs a slope. Although building codes have long required a minimum of ¼ inch per foot of slope for roofs, this is often ignored because building it flat is easier.

Waterproofing not accounted for in design plan. Maybe the biggest red flag of all is a designer who fails to specify the waterproofing details in the plans for a paved deck. Last summer, I looked at a $500,000 remodel in San Francisco that included a large tiled deck over a new media room. Flashings were missing and the waterproofing membrane appeared to be a roofing material turned up under the siding. The designer, an experienced architect, was on the job with a crew to take photos -- the project had won a prestigious design award. When I asked him what kind of waterproofing was used in the deck, he gave me a blank look and muttered something about "roofing." I got the call in January, about six months later -- the deck leaks and will have to be torn out and done over.