Home Buyers Beware…What You Need to Know When Purchasing
There is no doubt that home buyers are very savvy these days, but despite full seller disclosures and a clean home inspection there is always a chance that the home could have hidden issues that could cost lots of money down the road. Luckily there are steps that can be taken to avoid some big disasters.
State Law Protection: Every state is different, but focusing on California it should comfort buyers to know that our state is extremely pro-buyer. While the notion of caveat emptor does play out to an extent, there are laws in place that require the seller to disclose information about the home and it’s history. If you have ever sold or purchased a home, you are likely aware of the detailed disclosures that sellers need to fill out. Questions range from whether the seller has any knowledge of damage from floods, fires, plumbing, electricity, appliances and other issues, to whether there have been pets on the property and whether there is an active Homeowners Association governing the property.
These disclosures apply to only what the seller knows/is aware of (for example, if a prior owner disclosed something to them they are deemed to have knowledge of that issue), and what the seller reasonably should have known (if there was a water stain on a ceiling and the seller painted over it and did not disclose it, he will be deemed to have had knowledge of a potential leak, since a reasonable person would have realized such). Sellers should disclose everything, or can be subject to fraud and negligence.
Home Inspection: Getting a home inspection is probably the most important part of the purchase process. If there are any hidden issues that are not disclosed by/known to the sellers, the only way to find those is to have a home inspection. I ALWAYS tell my buyers to have an inspection. But the caveat here is to make sure the inspector is a good one…there are lots of inspectors out there. It is a good idea to ask your agent – we work with many inspectors and most agents know who is good at what they do and who is not. My favorite inspector is a also a licensed contractor and a civil engineer.
Further Inspection: It is important to keep in mind that a home inspector does a thorough inspection of the home, but usually not deeper inspections. For example, if the home is on a slope or cliff the inspector will likely recommend further inspection by a civil engineer to check for soil erosion and stability of the structure. If the roof is older he may recommend a roofer (note that many inspectors don’t even go on the roof); if a room smells musty and the inspector gets high moisture readings he will likely recommend a mold inspection.
If your inspector recommends further evaluation by an expert YOU NEED TO ADHERE TO THIS ADVICE. If you do not, and if you have issues down the road, you may be out of luck and need to spend money from your pocket to remedy the issue. It is well worth paying an extra few hundred dollars for peace of mind. There is enough case law where buyers tried to go after sellers for such issues but had no cause of action because they did not pursue further inspections on issues that were disclosed or uncovered in the home inspection (and oftentimes the issues were small). It’s better to be safe than sorry.
The lesson to be learned here is that all buyers should get a home inspection from a very good inspector, AND if the inspector notes anything that is a problem or might become one, they should follow through and have an expert out to investigate further. If problems are discovered the buyer will be able to negotiate with the seller to remedy the situation, or can choose to cancel the contract if within their inspection/contingency period (which is usually 17 days in California, unless contracted otherwise).
Speak with your agent and make sure you take precautions so that you do not have any surprises down the road after escrow has closed.
