Montalvo Realty
14585 Big Basin Way Saratoga, CA 95070

On the web @ www.montalvorealty.com
Montalvo / FCH Inc. Realtors® - Devoted to excellence

Ismar Maslic, GRI/Broker/Pres. REALTOR® (DRE License Number 01313976) Montalvo Realty 14585 Big Basin Way Saratoga,  CA  95070 408.877.6000 408.867.7272  Contact Me Visit My Web Site Print Newsletter

By Paul Bianchina

It's an all too common situation. You find a perfect home for sale in an ideal neighborhood. It's been beautifully remodeled, and it has everything you've been searching for. Even the price is right. Something tells you it might be too good to be true, but you put in an offer anyway, and it's accepted.

You start doing all the paperwork, and sure enough you discover the catch that you always somehow suspected was there. The sellers did all of that remodeling work without any building permits.

So now you're faced with a dilemma. You really want this house. The sellers insist that all the work was done by licensed contractors, and that they have full documentation and photographs of all the work as it was being done.

The sellers also tell you that they're willing to allow any type of inspection on the home that you'd like -- except for one by the city.

They explain that they had a bad experience with a building inspector on a previous home, or that they have an ongoing feud with the city over their water bill, or they're protesting the fact that the city hasn't fixed the pothole on Main Street yet, or some other reason that they refuse to become involved with the local municipality.

Through all this, you still want the house. Red flags are waving, but you're trying to ignore them. After all, the remodeling really does look like it was done well, and you can certainly understand why the sellers would be protesting that big pothole, rather than trying to cover up bad workmanship on their own remodeling.

Perhaps you decide to go one step further and pay for inspections on the home, in the hope that someone is going to tell you that all is well, despite the lack of permits. You may even think that you can write some provisions into your sales contract that will offer some future protection for yourself.

Unfortunately, it's probably time to walk away from this "too good to be true deal."

A few hard realities

If the sellers are telling the truth about all of the work having been done by "licensed contractors," then they should be willing to provide you with a list of all of their names, so that's one of the first things you should ask for the sellers to provide. It's doubtful you'll get it, because in most states those contractors are risking hefty fines and even the loss of their licenses for doing remodeling work without a permit.

If the sellers are "open to any type of inspection," ask if they're willing to have all the walls opened up at their expense so your electrician and your plumber can thoroughly inspect the condition of the wiring and the pipes inside all of the concealed spaces.

This is what the city building inspectors that they were so anxious to avoid would have done. And this is what you, as the buyer, now have no access to. That's one of the big problems here: If you decide to buy this house, you have no idea what's hiding inside those walls.

If, at a later date, you have a fire or a water loss that's related to some defect that's been hidden somewhere by the seller or one of his contractors as part of this unpermitted work, your insurance company could deny all or part of your claim as a result.

I've personally been on jobs where that's happened. Can you even imagine having a loss in your home that runs into the tens or even the hundreds of thousands of dollars, and then finding out it's not covered because the previous owner didn't like city building inspectors?

Still can't live without that particular house? Then here's what you need to do to protect yourself:

• The sellers need to provide all necessary building permits for the remodeling work.

• If they can't do that, then they need to pay for a licensed structural engineer, a licensed electrician, a licensed plumber, and any other necessary professionals to inspect the work and issue letters stating that the structure currently meets or exceeds all current building codes. Using those letters, the sellers then need to contact the city building officials and obtain whatever the equivalent would be to a completed building permit.

• Once you have that paperwork, show it to your attorney and your homeowners insurance company to be certain it's sufficient protection, and be sure that a copy of it is recorded with the escrow company.

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1056 S. Daniel Way, $699K Beautiful 3bed/2.5bath home with 1,950 sq. ft. living space and lot size of 6,534 sq. ft.

Pay attention to home inspection

By Paul Bianchina

For just about anyone, a home is the single-most expensive and single-most complex thing that you'll ever own. So when making that purchase, you certainly want to do everything possible to be an informed buyer and to protect yourself and your investment.

One of the ways to do that is to have a home inspection prior to closing the deal on the purchase. A home inspection will give you a lot of information about the physical condition of the home you're considering buying, and should alert you to any potentially serious problems.

But as a potential home buyer, it's important that you understand what a home inspection includes and doesn’t include. There are certain things you legitimately can expect your inspection to provide for you, and certain things that it won't. And you also need to understand that the more you participate in the inspection process, the more you'll get out of it in return.

Finally, understand that just like there are good and bad contractors, there also are good and bad home inspectors. Expect to have to do a little homework to find one of the good ones.

What is a home inspection?

A home inspection is a visual inspection of the home you're thinking of purchasing, performed by an objective third-party inspector. The inspector will examine the physical structure of the home from top to bottom, as well as the home's operating systems. Typically, a home inspector will look at the following things:

• Outside: The exterior home site; general condition of the foundation and basement walls; condition of the exterior walls, including the siding, exterior trim, windows, exterior doors and exterior paint; type and condition of the roofing; condition of gutters, downspouts, flashings, and vents.

• Inside: The condition of the attic, roof support structure, attic insulation and attic moisture issues; condition of the basement and crawl space, including insulation and moisture issues; garage and carport; electrical system; visible plumbing system; heating, cooling and ventilation system; general interior condition of the home.

A short time after the end of the inspection you'll receive a written report detailing the inspector's findings. Any defects the inspector identified will be noted. Inspectors never should attempt to sell you anything, such as their services to come in and fix anything that was identified in the report. To do so would be a clear conflict of interest.

It's important to understand that inspectors do not do what is known as "destructive testing." In other words: they don't cut holes in walls or otherwise open up inaccessible areas to look inside. Everything is based on their visual inspection of whatever they can access. They're also not there to comment on anything that's readily apparent from a cosmetic standpoint, such as a sloppy paint job. What types of things does the inspection not cover?

It's equally important to understand what a home inspection doesn't cover, because this is where you need to be sure that you continue with your due diligence when you're buying your home.

For example, your home inspector will point out any obvious signs of visible mold or mildew in the home. However, he will not be performing any type of actual mold inspection. If you suspect a mold infestation in the home, you need to have testing done by a trained hygienist.

Home inspectors will point out structural problems that have been caused by insect damage. But they're not there to perform a complete termite inspection. They also don't do inspections for the condition of the well, septic tank, or any type of soil contaminants.

You also need to be very aware of the fact that a home inspection has nothing to do with code violations or zoning issues. You need to check those things out for yourself with the local building and planning offices. It's up to you to assure yourself that any prior work on the house was done with the necessary building permits.

It's also up to you to check that there are not any issues when it comes to how the house is currently zoned, or how the current zoning might affect your use of the property in the future.

What do you need to do?

You have a couple of other responsibilities in this process as well. First of all, know who your inspector is, and what's required of him. Different states have different regulations pertaining to how home inspectors are regulated, so find out what's required.

Interview the inspector before you hire him. Be sure he complies with all those requirements, including whatever license, insurance and bond is needed. Ask for and verify references. Ask for and read a sample report. Be sure it gives you the type of information you need, in a format you can understand. Find out if the inspector belongs to any professional trade organizations, and what their standards and codes of ethics are.

The other important thing is that you need to attend the inspection. Follow the inspector around, even up into the attic and into the crawlspace if you're physically able to do so. See what he's looking at. Understand the potential problems. Ask questions and take notes. When you get your report, read it over from cover to cover at least twice, and be sure you understand it.

You paid for it, and it's one of the most important documents you'll ever have. So if you don't understand any of it, be sure someone explains it to you.

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