Lenn Harley has written another informative post for Home Buyers. When you're buying a house where major repairs have been made and you know of them, have you done all of your due diligence?
Make sure you've read and understood any documents that accompany these repairs; check for permits and know what's covered in the warranties. They may not be transferable. I remember when we bought our home in Leesburg, we even had a document transferred to us that gave the previous owner and now us, permission to have a basketball hoop in our driveway.
Don't assume anything.
BUYER BEWARE! BEWARE OF EXISTING HOMES FOR SALE WHERE MAJOR REPAIRS HAVE BEEN MADE!!
WHY IT'S IMPORTANT TO HAVE A HOME INSPECTION and, IF REPAIRS WILL BE MADE OR ARE TO BE MADE. . . .
READ THE DOCUMENTS.
Home for sale advertisements in the MLS have the required data such as Rooms, Utilities, Price, etc., but rarely is there adequate disclosure about home owner repairs, home owner remodeling details, foundation modifications, major repairs of defects, etc. that may cause a buyer to experience severe financial loss after closing.
Jay Markinich, Home Inspector extraordinaire, through some very good photos, highlights modifications to a property that would cause Lenn to see some very large RED FLAGS.
BUYERS' AGENTS CAN USE OUR COLLECTIVE EXPERIENCE TO KEEP BUYERS AND SELLERS OUT OF COURT.
Advice to Buyer's Agents:
HELP THE BUYER TO MAKE DECISIONS BASED ON THE DOCUMENTS, NOT WHAT THE LISTING AGENT OR SELLER SAYS. If a property has had significant repairs or modifications to the basement/foundation, kitchen, baths, fireplace/chimney, roof, any additions, etc., get the documents BEFORE writing the offer to buy.
What Documents Lenn??
1. Permits. Many counties require that a contractor or owner submit plans/specification/DOM, etc. for any significant work planned. Speak with the county involved to determine if a permit is/was required.2. Include a home inspection contingency in the Contract of Sale. If a home buyer is alerted by a home inspector that repairs, modifications or remodeling may not be sound, the Home Inspection Contingency will protect the buyer.
3. If the property for sale shows evidence of work done on the Basement/foundation, kitchen/baths (plumbing), fireplace/chimney, roof, additions, etc.
MAKE RECEIPT OF A COPY OF ANY PLANS, SPECIFICATIONS and DESCRIPTION OF MATERIALS, WARRANTY, pROOF OF PAYMENT, ETC. a CONDITION of the Contract of Sale. By making receipt of these documents a CONDITION of the offer, unless the seller is willing or able to provide the DOCUMENTS, the buyer is protected. If the documents are not provided up front, the buyer doesn't have to proceed.
EXPERIENCE IS A WONDERFUL TEACHER. A while back, I wrote an offer to buy a home wherein there had been repairs to the foundation. The home inspector believed that the repair to the foundation was sound. The process for the repair of the foundation was not new to me or the home inspector. I had seen that process used by a new home builder when a basement foundation was back filled before the concrete cured and the foundation buckled. In this case, the crack showing on the internal wall in the basement was about 1/2 inch wide. The repair was done by a process using an Epoxy that is an accepted process in this area. Example: http://glennconstruction.com/wall-repair
As is my practice, I requested the DOCUMENTS, drawings, contract and Warranty for the work performed. We
received a copy of the contract, the drawings for the repair, paid receipt, warranty, etc.
RED FLAG ALERT!!! The contractor's WARRANTY clearly stated that the WARRANTY was NOT transferable!
NO TRANSFER - NO WARRANTY! The warranty was not limited by time. However, since it was not transferable, the new owner would have no protection if the repair failed. This presented a problem in the mind of the buyer since the repair was only about 6 months old. He was also concerned about disclosure when/if he decided to sell. This property was in Maryland where disclosure is important.
Did the buyer buy the house?? YES! However, with the information we had about the limits of the Warranty, the buyer was able to negotiate a new warranty from the contractor that was better than the one the seller had. The new warranty for the buyer was transferable and was insured should the contractor go out of business. The seller paid for it. The listing agent was exasperated but cooperative.
DO YOU READ THE DOCUMENTS??? I believe that it's a good practice for buyer's agents to read all documents transferred to the buyer, including HOA documents. Perhaps I'll write about the HOA doc that killed a contract when the community didn't permit a basketball ring to be installed in the back yard.
Courtesy, Lenn Harley, Broker, Homefinders.com, 800-711-7988. Serving home buyers in MD and Northern Virginia.
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A home buyer walks into a house, spends an hour wandering around fawning over how nice it is and how it's absolutely perfect. They've been looking for a while and decide, we'd like to make an offer! Good news! But, before they write the offer they'd like to have a couple of friends and family show up to get their opinion. You come back to the house and meet your clients, along with 15 friends and family who, the helpful sort they are, point out all the things THEY DON'T LIKE. When they're done, the buyers decide not to buy.
they just can't make up their minds. It's not that they haven't liked what you've shown them... they just can't decide.
I received a call today from a someone getting ready to put an offer on a house. They had a few concerns about a some of the rooms and wanted to know if I might be able to help.
