Home Inspections - There is no substitute for hiring a qualified home inspector when purchasing real estate, whether residential, commercial or industrial property.The problem is in identifying a qualified inspector as they are not licensed in the State of California.Thus choosing one is difficult.It must be based on other criteria such as their membership in one of the organizations for inspectors (perhaps as one of their instructors), their current licenses in other classifications (e.g. general contractors), and/or recommendations.
Home inspectors cover most systems, structural, mechanical and electrical in a home.Thus they must have a very broad knowledge base coupled with the experience needed to recognize deficiencies.
The home inspector generally conducts the primary overview of the property and recommends other inspections be done when finding conditions that warrant them.Home inspectors do not check for geologic conditions or hazardous materials present.They also may limit their inspections beyond these items, so buyers should be prepared to hire additional experts as needed.Selection of inspectors should be made based upon the inspectors thoroughness and depth of his knowledge.
Some categories of inspections that a buyer could find beneficial are listed below.
Geologists and soils engineers are licensed to perform inspections and do testing to establish the stability of land. Although hillside properties are the ones that generally cause concern about landslides, flat land can be a subject of concern also in terms of soil stability and may warrant being checked out. As an example, a dry lake bed can cause problems due to swelling and shrinking that occurs in rainy seasons, especially when top soil has been added on top of the sand base.
Poor compaction of the fill that underlies a structure can be a source of problems. In the past, compaction requirements were less stringent and, as a result, settling problems can be found in some older homes.
Soils engineering firms investigate other soil stability issues as well.Water causes many of the problems that are the purview of soils engineers, including mud flows and erosion that can follow rainstorms.For these reasons it is wise to investigate site stability.
Structural Engineering - Licensed professionals qualified to conduct inspections and do evaluations concerned with strength and stability of structures, including buildings and retaining walls.
When there are any concerns regarding the strength of a building, or when contemplating a roof replacement with heavier material or addition or change in the structure where original structure is removed, it is best to hire a licensed structural engineer to evaluate the situation. Sometimes, as an example, an owner will have replaced a portion of exterior walls with glass doors to enhance their enjoyment of a view. Unknowingly the owner removed an element (the wall) that was needed for sheer support in case of an earthquake where twisting forces could compromise the support.
Such situations are avoidable when proper Building Department reviews, permits and inspections are done. Thus when looking at remodeled properties, it is recommended that all building permits be examined.
Roof Inspections and Certifications - Many home inspectors will not walk on a roof to avoid the liability for damage. They lean a ladder along the edge of the roof and try to determine its condition from there. While some indications of the condition of the roof may be evident, other major concerns may not be. One of these is the condition of the mastic used to seal around flashings, skylights and fireplaces. Mastic dries out in time and cracks, causing perhaps the major reason for leakage into homes. It is therefore imperative that this be checked.
Some licensed roofing contractors perform roof inspections and for a fee will offer certifications for a period of years. During that time if any leaks occur, the contractor will make the repairs without charge. One important benefit from this contact is knowing someone to call for periodic maintenance.
Pest Control (Termite) Inspections - This inspection is commonly requested to evaluate structures for the presence of termites (dry wood and subterranean)and other wood-boring insects (such as carpenter ants found in some California communities). The inspection also covers fungus infections such as dry rot. Pest control inspection companies are licensed by the State of California and must file reports to the State Pest Control Board, where they remain on file for public benefit.
Changes in the reporting method provide for separation of the report into Section 1 (Active Infestation Items) and Section 2 (Recommended Corrections). Review of the State licensing guidelines is recommended to understand the guarantees provided by licensed pest control operators when they issue a Pest Control Certification (Clearance), which is the document that is provided upon completion of recommendations.
The Structural Pest Control Board can be reached at 1-800-737-8188 for questions or clarifications or by clicking here.
Environmental Hazard Inspections - Licensed inspectors qualified to perform inspections and tests for specific environmental hazards which are identified in the documents buyers receive as a part of their purchase agreement. Some of the environmental hazards are discussed below. Some may be relevant in other areas of the country where, for instance, in mining areas that are not of concern in Southern California.
Asbestos Inspections and Testing - Asbestos is found in our environment having been used widely to control heat within its source. Therefore we find it along highways, from automotive brakes, and in many older structures as a component in ceiling tiles (remember the ones with the holes---they often contain asbestos), acoustic ceiling materials, floor tiles and rolled flooring materials, wrappings that surround heat ducts and plenum chambers, and even heater exhaust vents themselves!
The material was considered an ideal substance to give added protection against heat---and it was inexpensive. This resulted in its being widely used. It is suggested by some authorities that the material when left undisturbed the presence of asbestos in building materials is not hazardous, but when abraded, shredded, scraped, or otherwise disturbed, asbestos becomes friable and the particles can become airborne. Then it can become a health hazard, especially when blown through damaged ducting into the home or business setting.
Some heater ducting has hard metal tubing with asbestos sheathing on the outside. Other heater ducts are comprised of a thin foil interior and corrugated asbestos material for the structural component. The latter type is easily crushed when unsuspecting or careless workmen climbing over or under it in making repairs or inspections in attics and crawl spaces. Then the asbestos becomes friable---capable of becoming airborne.
Under California law collection of asbestos samples for testing and removal of the hazardous material must be done different companies, properly licensed. California Asbestos Consultants (CAC) are professionals licensed to collect samples. Asbestos Abatement Contractors are licensed to remove and dispose of asbestos. They should be approved by Cal-OSHA. For more information, click here.
Protective breathing equipment is worn while asbestos is being removed. It is protected and labeled prior to disposal in a prescribed manner. After asbestos has been removed, the premises are tested to determine that the air quality is safe for reentry.
On the contrary, when asbestos is removed illegally (as in scraping acoustic ceilings), the interior air may become contaminated and become a health hazard. Cleaning the premises can be costly, requiring such techniques as "wet wiping" of every surface in the property!
To avoid this problem, it is important to test a sample of acoustic material before ceilings are scraped. Not all rough, acoustic-like ceiling material contains asbestos, but only by testing a small sample in a laboratory can you be sure.
Mold Inspections - Mold can result from water intrusion that is not quickly removed and the area thoroughly dried out. Some types of mold are classified as significant hazards to the health of occupants. Thus when evidence of moisture is found during an inspection, the buyer is advised to hire a licensed mold inspection company to conduct a thorough sampling of the suspected areas and testing to identify the types of mold, if any.
Radon Inspections - Licensed inspectors are available to do testing to satisfy concerns regarding radon gas. Information on radon can be obtained at http://www.dhs.ca.gov/ps/ddwem/environmental/radon/radon.htm
The Environmental Protection Agency provides information at http://www.epa.gov/inq/ .
Lead-Based Paint Inspections - Paint manufactured before 1978 may contain lead which has been found to be a health hazard. It is especially problematic for children living where paint may be peeling or chipping. As a result, the U.S. Environmental Protection Agency (EPA) has prepared a report entitled "Protect Your Family From Lead in Your Home." Sellers and landlords must provide this and a disclosure about any lead-based paint known to exist in the residential structure to a buyer or tenant.
The report can be accessed at http://www.epa.gov/iaq/
When desired buyers can have a professional check the property for lead paint. There are also some testing devices that can be obtained privately.
City inspections or reports by building departments are required in many cities to confirm that property in escrow is in compliance with building permits. These reports are fee-based, but not all require an on-site inspection. Some cities require that a buyer acknowledge if he is waiving an on-site inspection.
Point-of-sale Requirements - Some cities such as Los Angeles require more modifications than State law requires when property is being sold. These modifications can include water-flow restricting devices, automatic gas earthquake shutoff valves, ultra-low-flush toilets, shatter-proof glass or film coatings on certain doors and windows, etc. Smoke detectors and water heater strapping are other point-of-sale mandates.
Sellers are required to submit documents verifying that these changes have been made. Professionals often are hired to provide the certification for the City of Los Angeles and for the escrow holder.
Palos Verdes Homes Association Inspections - Building designs in Palos Verdes Estates and the Miraleste area of Rancho Palos Verdes are controlled by the Palos Verdes Homes Association and Art Jury. They recommend that buyers of property request sellers to obtain a letter of "completion and compliance" as a condition of purchase. This letter can only be requested by the property owner as it involves an on-site inspection and the sellers' authorization.
When such inspections are done, a member of the staff of the Homes Association compared the actual property with the approved plans that are on-file at the Association's office in Malaga Cove. When discrepancies are discovered, a letter is sent to the seller with discrepancies identified.
When there are no discrepancies, a letter of completion and compliance is provided.
Selection of a Qualified Agent - The agent you select to handle your home purchase should be well qualified to handle a wide variety of tasks.These tasks include providing information about the communities being considered, the schools, and other factors including area history as it has affected property values. Also are proposed neighborhood and city changes that also could influence the desirability and value of the areas.
The agent should also provide instruction about the purchase process, the documents involved, and the timing considerations and encourage buyers to obtain a letter of pre-approval from a qualified lender that will be included with a purchase offer. After researching available properties to satisfy the buyers' needs, the review process of visiting probable candidates begins.
When the property for purchase has been selected, the buyer and agent can begin the process of preparing and negotiating an offer. Buyers must rely upon their real estate agent for information and for guidance in formulating the terms of an offer. The information needed includes selling prices for all recent sales of comparable properties and analysis of recent market trends that are affecting prices, such as the impact of financing changes and the effect of increased competition, as in recent short sales and foreclosures. Determining the Offer Price - When market trends do not pose a major impact on pricing, the sales of recent comparable properties can be used to indicate a price to offer. The ratio of asking price to selling price of recent sales can be used to determine how much negotiating or "flex" room to allow in the offered price. If the seller's motivation is known that also helps in determining the price for an offer.
Needless to point out, in all markets some properties are just so unique and so desirable that multiple offers will be submitted. This also occurs when property is listed at a price well below market value. In these instances the consideration is how high to begin the offer to at least receive a counter offer from the seller!
In such situations, an offer presented by a known real estate agent with a good reputation among the real estate community will have an advantage over offers of other agents. This occurs because the seller wants confidence in the quality of the offer selected, and a known and respected Realtor provides an extra measure of strength to the offer presented.
Buyers can expect their real estate agents to review of all documents used in this purchase process as well as an explanation of all contingencies, disclosures, and possible inspections.
Ever aspect of the negotiating process is critical to success. Buyers benefit from being represented by highly skilled Realtors who know the real estate market, the laws, and the documents that apply. Their experience also provides an edge in negotiations.
Experience and education are excellent means to evaluate competence. Some elements to look for in the Realtor's list of qualifications are:
-----Preferably a Licensed Real Estate Broker1
-----Certified Residential Specialist2
-----Accredited Buyers Agent
-----Over 10 Years of Experience Selling Homes in this City
-----Affiliation with a Highly Respected Firm with Nationwide Presence
-----References from Satisfied Clients & Permission to Call
-----Local Resident, Active in the Community
1 Licensing requirements for real estate brokers are far more demandingthan those for sales agents.
2 Designation as a CRS, Certified Residential Specialist signifies that the Realtor has met a specified standard of education and experience. Fewer than 5% of real estate licensees have received this CRS designation. This designation should not to be confused with company-sponsored "Certified Relocation Specialist."
Required Disclosures - California law requires real estate sellers of 1 to 4 units to make full disclosure to buyers of all known defects and hazards associated with the property being sold. In addition to the disclosures required of sellers, real estate licensees who are involved in the transaction are duty-bound to make a careful visual inspection of the property and report to the buyers any problems noted.
Sellers are required to provide the Real Estate Transfer Disclosure Statement, known as a TDS, to disclose of the condition of the property as known to the Seller and/or observed by the agent(s). This disclosure has a built-in 3-day right of rescission if provided after the acceptance of an offer (or 5 days from the date mailed). When provided to the buyers prior to final acceptance of an offer, there is no such right of rescission. Other agreed contingencies are not affected.
Legal experts recommend that sellers provide their buyers with all information known about the property that could possibly affect the buyers' decision on whether or not to make the purchase, and at what price. If sellers fail to disclose known conditions, the seller's liability does not end at the close of escrow. Thus sellers are encouraged to disclose all relevant information.
The "Closing" Process - In California, closings of real estate sales are usually handled by escrow companies or the escrow departments of title companies. Acting as an intermediary in the transaction, the escrow companies follow the agreements set forth in the purchase agreements that have been prepared by attorneys of the California Association of Realtors. These documents also serve as escrow instructions.
When an agreement is reached, parties to the transaction deposit the purchase agreement and escrow instructions along with deposits into escrow which serves as an intermediary in the transaction. The escrow officer follows the purchase agreement performing the duties necessary to complete the transaction. The escrow agent sees that all paperwork is provided to the parties in a timely manner with proper tracking, maintains oversight of needed loans, ordering and processing the loan documents for closing, obtaining all other required documents, maintaining liaison with the company insuring the buyers' title, and after funding and recording providing the final sale proceeds to the seller.
Sale Transfer Fees - The County of Los Angeles imposes a transfer fee equivalent to $1.10 per $1,000 of the selling price on all sales of real property in the county. This is typically paid by the seller.
Some cities impose an additional transfer fee; others none. The city of Redondo Beach, as an example, charges $2.20 per $1,000 of selling price. This is often negotiated to be shared by the buyer and seller.
The city of Los Angeles charges $4.50 per $1,000 on the selling price exclusive of outstanding indebtedness (loans) against the property.
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