Ask for disclosures before settling on a final price.

[ScrippsRenter]

A little background first…

I have been renting in Scripps Ranch for 2 years now. My wife and I sold a home in Spring Valley back in Nov of 2005 and netted over $500K. I have since invested the proceeds in fixed income securities and receive enough monthly interest to cover the rent.. Hip Hip Horaay. Sold high in the up market and live essentially rent free. So far so good.

Renting however is not for everyone (as some of you will agree). My wife and I are now expecting a second child (due in Feb). So we decided to start looking to buy a house. Keep in mind that we plan to buy this house/home and live it it for a very loooong time 20 + years. So we are being very picky and are looking for a fixer upper (I’m fairly handy and love fixing up homes).

Here a some of my more astute observations being a prospective home buyer again.

1) Range pricing is for up markets, not down. Anytime a see these range pricings I instantly think since it’s a “buyers market” let’s offer the low end of the range and ask them to pay my closing costs. Go ahead sellers entertain my offer. Of course, we did make an offer on a competitively priced property and they had instant “other” offers. So, I told them to take the other offers, because mine isn’t going to move much higher than what’s on paper. I guess the other offers aren’t that great either, since the home is still for sale. Hello.

2) Ask for the disclose(s) prior to the final price agreement. This point is very important!!! Currently I have $10,000 stuck in an escrow account because I wasn’t able to read the disclosures prior to final price agreement and start of escrow.

This was to be the perfect fixer upper. 5 bedrooms and 3.5 baths approx 2,900 sqft on a large (so cal.) lot and in need of a complete remodel. The price appeared competitive as price per sqft goes.

However, after the price negotiations and the start of escrow, it was disclosed to me that the property had a cracked slab that had been repaired with pins and epoxy. Wonderful! So this leads me to the next observation.

3) Always get a home inspection and in particular a manometer reading. This handy little device measures the tilt of a slab. This house has a very severe tilt and migration of existing slab. Bad news for everyone invloved.

When all of the information was finally presented to me. I decided to run (not walk) from the deal. However, the seller was not yet signed the release/cancellation of escrow instructions and my money is still stuck in escrow. Over two weeks and counting.

In retrospect, my wife and I are now going to defer our home purchase until after our second child is born (probably May 2008). We feel that the market will probabaly present itself an even better opportunity when we are ready.

Hopefully, those of you who are in the hunt and making low ball offers can use my experience(s) for your own future transactions.

Good luck from a long time reader and first time contributor to this outstanding website/blog.

[The OC Scam]

ScrippsRenter,

Agree with you on the home inspection! In fact I just had one done a rental home and the proerty management had a cow about it! They said: ” YOu know your not buying the home right?” I said: “Yes but I’m going to be living in it right?

This house had a of problems that I demanded to be fixed before move in date and the property mangement company fixed the major issues. The main sewer line was disconnected below the home and the electrical cables were exposed in the attic to the insulation which could start a fire while sleeping in the night without setting off the fire alarms right away…

Good research about the escrow account ! Thanks

[The OC Scam]

ScrippsRenter,

Agree with you on the home inspection! In fact I just had one done a rental home and the proerty management had a cow about it! They said: ” YOu know your not buying the home right?” I said: “Yes but I’m going to be living in it right?

This house had a of problems that I demanded to be fixed before move in date and the property mangement company fixed the major issues. The main sewer line was disconnected below the home and the electrical cables were exposed in the attic to the insulation which could start a fire while sleeping in the night without setting off the fire alarms right away…

Good research about the escrow account ! Thanks

[XBoxBoy]

Another important thing to do that is often overlooked is to have the house checked for mold. My wife and I moved into a house that although was a recent remodel, had mold growing in the crawl space. My wife developed asthma and it took us several months and lots of doctor visits before we figured out what was the issue. After having my wife stay with friends for a couple weeks and making significant recovery we knew the house was the issue. Fortunately it was a rental and the landlord was cooperative about letting us out of the lease. (It would have been a real nightmare had we bought the house!) But now any offer I would write to purchase would have a provision for a mold and environmental inspection. And I highly recommend that to anyone buying a property.

[XBoxBoy]

Another important thing to do that is often overlooked is to have the house checked for mold. My wife and I moved into a house that although was a recent remodel, had mold growing in the crawl space. My wife developed asthma and it took us several months and lots of doctor visits before we figured out what was the issue. After having my wife stay with friends for a couple weeks and making significant recovery we knew the house was the issue. Fortunately it was a rental and the landlord was cooperative about letting us out of the lease. (It would have been a real nightmare had we bought the house!) But now any offer I would write to purchase would have a provision for a mold and environmental inspection. And I highly recommend that to anyone buying a property.

[lonestar2000]

Excellent comments and observations, thank you!
Also, don’t forget to check/insisit on termite and ground water inspections. Finding mercury in your ground water (which has a way of seepeing into basements/foundations can be expensive/impossible to remedy.

[lonestar2000]

Excellent comments and observations, thank you!
Also, don’t forget to check/insisit on termite and ground water inspections. Finding mercury in your ground water (which has a way of seepeing into basements/foundations can be expensive/impossible to remedy.

[raptorduck]

I am also in the hunt as many folks know. I have noticed something different between areas I looked in the Bay Area and SD. Up here, I can ask for a disclosure packet after I tour the home and before I write an offer. It usually has all the inspections and reports (mold, foundation, termintes, everything). I still put in all those contingencies and do my own inspections, but they are to confirm what is there.

In SD I have asked for disclosures from the get go and always been told there are none other than the mandatory questionaire. I have stopped asking. Along with the abscense of lock boxes in SD, this is another odd difference between here and there.

[raptorduck]

I am also in the hunt as many folks know. I have noticed something different between areas I looked in the Bay Area and SD. Up here, I can ask for a disclosure packet after I tour the home and before I write an offer. It usually has all the inspections and reports (mold, foundation, termintes, everything). I still put in all those contingencies and do my own inspections, but they are to confirm what is there.

In SD I have asked for disclosures from the get go and always been told there are none other than the mandatory questionaire. I have stopped asking. Along with the abscense of lock boxes in SD, this is another odd difference between here and there.

[Anonymous]

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[Author]

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