BUYER BEWARE
You are about to take the plunge: make an offer on a house. You don’t, however, want to end up with a lot of expensive surprises down the road.
What to do?
Attorneys and real estate agents say there are plenty of things you can do to help protect yourself.
Below are some home-buying tips:
* Forget about decorating for now. “One of the biggest mistakes new home buyers make when looking at a possible home is thinking about how their furniture will look in it,” real estate attorney Michael Muirhead says. Instead, focus on the things that could go wrong.
* Be suspicious of any work done without permits. Often, there is a reason why someone has not taken the time to clear home improvements with the city.
* Check with your city’s department of building and safety. Permits that have been obtained for home improvements and room additions are public record. “If someone came to our counter and asked to see a permit on a home,” said Gaddis Farmer, building official with Simi Valley’s Department of Building and Safety, “we would open up our files. They would know.”
* Hire a professional. Within the past 10 years, the field of real estate inspection has burgeoned. For between $250 and $400, a house can be inspected for such things as structural and electrical defects. Although terms of liability can vary (check your contract with the inspection company), a professional inspection can let you know ahead of time what you’re getting into.
* Don’t overlook the obvious. If an oak tree is next to the house and it crashes onto your roof after you move in, it hardly can be called the seller’s fault for not mentioning the tree’s presence to you. Ditto for any other visible defects that are within plain sight. Use your eyes.
* Carefully consider the risks of sharing a real estate agent with the seller. “Generally, I don’t recommend it,” Muirhead says. “It takes a highly conscientious and ethical agent to represent both sides. . . . It’s difficult to serve two masters.”
* Ask your real estate agent if he or she has errors and omissions (E & O) insurance. Most reputable real estate offices carry this to protect themselves against anything that they might fail to mention to the buyer. Any agent without this coverage is like an uninsured driver--someone to steer clear of.
SELLER BEWARE
Selling a house has come a long way from the days when a seller and buyer simply shook hands on the deal and that was that.
Today, the entire process is much more complicated.
How do you protect yourself against having a buyer come back to you down the line?
Attorneys and real estate agents have some advice:
* Forget the days of “buyer beware.” If you know about any defect in your home--whether it’s a faulty air conditioner or a crack in the swimming pool--you have a duty to disclose it. The same holds true for such things as neighborhood conditions, which could affect the buyer’s decision to purchase.
* Get a termite inspection before listing the home. Most mortgage lenders and homeowners require this report anyway, but it’s good to know the extent of any problem up front.
* Provide a one-year home warranty policy for the buyer. Generally, such policies cost between $200 and $300, and cover such things as wiring, heating and built-in appliance repairs. Some buyers will agree to share the cost of the policy.
* If you are not certain about some aspect of the house, consider an “as is” clause. You might not know, for example, whether the enclosed patio that the previous owners built is up to code. An “as is” clause tells the buyer that you are disclosing the condition of your home to the best of your knowledge, but are making no guarantees or warranties. In order for a buyer to prevail in a court action later, he or she would have to prove that you knew otherwise.
