Questions to ask when buying a home
If you want to buy a home, prepare to ask a lot of questions. This is not a time to be shy or to hold back because you think someone might be offended by a question. If you're like most people, this real estate purchase will be the largest purchase of your life, so I recommend working with your Realtor to find out everything you can.
The good news is that the process of selling a house in California requires property owners to complete at least five disclosures: one from the state, one from the county, a transfer disclosure statement, a real estate agent's visual inspection report, and a natural hazards disclosure. Taken together, this represents an enormous amount of information about the history and current condition of the property (as long as you read it), but it may not reveal everything.
Here are some additional questions to consider.
What should I know about the property that wasn't included in the TDS?
A transfer disclosure statement (TDS) is required by California law. Sellers must disclose any defects related to the house (and all other items included in the sale such as appliances or built-in furniture). However, if a problem was remedied, it may not be included on the TDS, so consider asking whether the seller has made any repairs or updates to the house, especially big ones like replacing the roof or fixing a leaky pipe under the bathroom sink that went unnoticed for a period of time.
Ask when repairs were made and by whom. Were licensed contractors employed or did the seller and his brother put a little plumber's tape on the leak and call it good? Past issues can sometimes predict future problems, so it's good to know about them.
Ask about homeowner association fees
If the home you want belongs to a subdivision with a homeowner's association, ask for the bylaws or agreement as well as minutes of meetings.
This will reveal important details such as whether you should expect an increase in dues or the fact that your prospective neighbor's avant garde lawn art may not be appropriate for children. These and other issues may impact your enjoyment or use of the property.
Ask about additional insurance needs
In addition to homeowners' insurance, does the current homeowner carry flood insurance? How about earthquake insurance? Be aware that if they own the house free and clear, they may be able to opt out of insurance coverage that a lender would require.
Is the house to be sold as is?
When sellers put their house up for sale “as is,” it signals they are not willing to take on repairs or consider minor renovations. However, as a prospective buyer, you can still ask. Sometimes it is in everyone's best interest for the seller to take on the responsibility to fix something. If the seller is willing to repair or upgrade the house in a way that impacts the property's appraised value, it can increase the size of loan you can get—and thus, the price the seller can ask for the house.
Contractors are often willing to bill the escrow account for the repairs and get paid when escrow closes.
Which appliances come with the house?
Regardless of what you may see in an advertisement or Multiple Listing Service posting, if it isn't in the purchase agreement, it isn't included. Unless specifically identified, only real property that is physically attached to the structure is included. Something that is plugged in or attached to a gas hookup is not considered attached.
How long has the house been on the market?
Sometimes, the only reason a house remains on the market for a long time is because it was originally overpriced. When sellers determine the sale price based on their emotional attachment as opposed to the home's features, it can take a long time to sell. Another reason a property doesn't sell right away is because it has a quirky set of features that only appeal to a specific set of buyers.
When I notice that a property has been on the market for a while, a little red flag goes up. I get curious about whether there's some flaw others are seeing that I am missing.
Next week, I'll share more questions to ask.
If you have questions about property management or real estate, please contact me at rselzer@selzerrealty.com or call (707) 462- 4000. If you have an idea for a future column, share it with me and if I use it, I'll send you a $25 gift certificate to Schat's Bakery.