What You Need to Know
The Tahoe home buying process is one of discovery. Throughout, you will receive crucial information on the condition of the property – from its physical attributes to the condition of its title. Piece by piece, you will learn what you need to know to make an informed purchase. The following is an explanation of some of the most significant parts of the puzzle.
Transfer Disclosure Statement
The seller of your property is required by law to furnish you with a “Real Estate Transfer Disclosure Statement,” (TDS), in which the seller will make known to you important disclosures about that property, including any known existing conditions, any hazards or nuisances. For example, if the property drains improperly or if there are cracks in the chimney and the seller knows about it, he or she is required to let you know via the TDS.
In the TDS, the seller’s agent and the buyer’s agent are also obligated to inspect the property and to provide results regarding any known existing conditions, any hazards or nuisances. This is known as the Agent Visual Inspection (AVID). If the TDS is delivered to you after execution of the offer to purchase, you have three days if the form is delivered to you in person or five days if it is delivered to you by mail, to use it to terminate the contract if you are not satisfied with its contents.
Typically, the TDS is delivered with in the first seven (7) days of the escrow period.
Home Inspection Report
Just as important as the TDS is the home inspection report. While the TDS documents the property’s condition, to the knowledge of the seller, a home inspection will provide you with the additional insight of a construction expert.
As a result, I advise anyone buying a home to first have it inspected by a professional home inspector who is:
• A licensed general contractor
• A member of a recognized home inspection trade group
• Carries professional liability insurance
Your home inspector will provide you with a written report, which will advise you of the physical condition of the property as determined from the inspection of accessible areas. Generally, the cost is approximately $300-$500 for a home up to 2,500 square feet in size. For larger homes, or for properties that have multiple structures you can expect to pay more. A home inspector will provide you with their fee quote prior to doing a home inspection, so you’ll know the cost before you agree to have the work done.
The report also will identify areas that could not be inspected and may recommend additional inspections by other experts in areas including roofs, foundations, soils, drainage, heating/air conditioning, or electrical. Less usual, but also recommended from time to time, are inspections for health-related risks such as mold, radon gas, asbestos or problems with water or waste disposal systems. While additional inspections will cost more money, they definitely are worth it if they uncover an expensive defect in the property.
A general inspector will focus on the structure, construction, and mechanical systems of the house, and will make you aware only of repairs that are needed. Generally, an inspector checks (and gives estimated prices for repairs on): the electrical system, plumbing and waste disposal, the water heater, insulation and ventilation, heating and cooling systems, water source and quality, the foundation, doors, windows, ceilings, walls, floors, and roof.
The inspector does not evaluate whether or not you’re getting good value for your money.
Once you’ve done your inspections you may be able to negotiate with the seller for some repairs, a credit to complete repair work, or receive a reduction in the price of the home, however, all homes are sold “As Is” and in the present condition when the offer was made, meaning, the seller is under no obligation to repair, provide a financial credit, or do anything based upon any of the buyer home inspections. Here are some options:
• Negotiate for the seller to fix the problems prior to close of escrow,
• Receive a credit from the seller for an amount to make the repairs; or
• Cancel the contract if your and the seller cannot agree on the repairs or their costs.
It’s not required that you attend the inspection, but it’s a good idea and I strongly recommend that you be present at the end of the home inspection so that the inspector can go over what they have learned about the property.
The inspection also provides a great opportunity to hear an objective opinion on the home you would like to purchase and it is a good time to ask general, maintenance questions of an expert in the Tahoe area.
Pest Control Inspection Report
While you are in escrow, you should have the property inspected by a licensed pest control professional. While termites or other pest infestations are not common, pest control operators also are trained to look for dry rot, usually caused where wood comes into continuous contact with water, ants, and other pests common for our area.
There are two parts to a pest inspection – Section I work, which are current problems that need to be fixed, and Section II work, which are potential problems that if not addressed will some day turn into Section I current problems.
Depending on what you have negotiated with the seller, if any condition is discovered in a pest control report, it may need to be corrected and the property re-inspected by a certified pest control inspector, before you close the sale of the home if the seller is responsible for pest work.
Pest control reports generally cost around $200-$300 and will vary depending on how many structures are involved in the inspection.
Smoke Detector and Water Heater
During the escrow process, sellers are required to provide for you evidence that they have equipped the home with smoke detectors, and that water heaters are braced, anchored, or strapped to resist falling in an earthquake.
Residential dwellings built prior to 1978 require sellers to complete and provide a lead-based paint and lead based paint hazards disclosure to the buyer. While most sellers don’t know if lead based paint was used in the home, the disclosure will be provided to you as the buyer. If this is a concern to a buyer, they can have a lead based paint test completed.
Carbon Monoxide Detector
All residential dwellings that have gas powered devices must have a carbon monoxide detector on each sleeping floor in the home. At this time, appraisers are noting the presence of a working carbon monoxide detector, along with home inspectors.
There are a number of disclosures that will be provided to a buyer during the investigation/inspection period and these are just a few of the ones you’ll get. It is strongly recommend that all buyers review, verify, and satisfy themselves on any and all information they receive on the property.