Buying a House Guide item #4 – Trust, Then Verify has as much to do with psychology as it does with the physical condition of the home.
In most cases, transferring California real property requires the Seller to complete, among other things, a Transfer Disclosure Statement. Here, the Seller describes, to the best of their knowledge, any defects, issues, problems or material facts about the home that may affect its usefulness, utility, or future value.
The phrase “to the best of their knowledge” is what we will focus on here!
Buying A Home Guide – Trust, But Always Verify!
Buying A Home Guide - Trust, then verify the condition before you buy!
It is generally assumed that the Seller knows as much about the property as anyone, especially if they have been residing on the premises. But the Seller may not be aware of the condition of the roof, the furnace, the hot water heater, or any one of the many systems in the home until they fail.
Most Sellers have never ventured under the house. Many have never gone into the attic. A great number have no idea of the condition of their electrical system or their plumbing.
They know that the dishwasher works – at least it makes noise when they turn it on! – and the furnace keeps the home relatively warm in the winter. The anxious Seller may not – nor are they required to – look too far below the surface at their home’s condition.
Read the Transfer Disclosure Statement carefully and trust the Seller to tell the truth about what they believe to be the condition of the home. Indeed, there are severe penalties and liability for them if they don’t!
But just to be sure – verify all that they tell you!
To really know the condition of the home, you should contract with an unbiased professional. Have them inspect the property, make candid observations, and issue a written report. Use the Seller’s disclosures as a guide, not the Gospel!
Sometimes, the property inspector will find things that even the Seller was not aware of!
And this extends beyond the property itself to include the surrounding neighborhood. Ask about neighborhood noises, then see for yourself. One person’s noise is another person’s music! Traffic to one person may be just an average commute to another.
Fortunately for Buyers AND Sellers in today’s real estate market, there are professional services that will issue reports on everything from property condition to property taxes, local ordinances, and commercial and industrial facilities in the area.
I have found most Sellers to be forthright in their disclosures, but they can only tell – and are only required to disclose – what they know.
If the Seller is a bank or a corporation, their burden of disclosure is even less than an owner occupant.
If you are buying in a development with a Homeowners Association, make sure you receive copies of the minutes of the association meetings for at least a year prior. Also review the budget and make note of the reserves.
All of these things can have an impact on your enjoyment of the property once you take possession – especially if there has been an upcoming dues increase that has been discussed for several months, but will not take effect until after you are the owner!
The Buying A Home Guide says buying the correct way involves taking the Seller at his word, but checking the facts just the same!
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