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  • Big Change in California’s Real Estate Purchase Contract

    Posted on January 28th, 2015 acimetta No comments

    Tenting a home for fumigation can cost a couple thousand dollars depending on the home’s cubic feet.

    In southern California where the majority of Realtors use CAR’s residential purchase agreement to make an offer, there have been a number of changes to the contract for 2015.  (CAR = California Association of Realtors).

    One of the biggest changes – which could potentially restructure how buyers and sellers negotiate – is the removal of the WPA form. WPA stands for Wood Destroying Pest Inspection. It’s basically the form buyers includes with their offer that stipulates that sellers will pay for a termite report as well as any Section 1 items identified on that report. Section 1 items must be fixed prior to the close of escrow (lender requirements) and usually include termite infestation and dry rot among other things. These two are usually the big ticket items. And although these points are negotiable (as is everything in the contract), it was standard practice for sellers to pay for Section 1 items. This was handled up front with the offer. Sellers accepted the fact that this was a standard expense to selling a home. Then when buyers come back with a Request for Repairs, all repairs would be over and above the termite work.

    But in 2015, the WPA has been eliminated. Potentially, buyers can still request termite work up front in the offer. And this will probably happen for some time to come. Eventually, however, the process will evolve and termite work will become part of the negotiations for repairs.

    The biggest impact from this change is that sellers won’t automatically feel it’s their responsibility to do the termite work, i.e. tent their home for infestation, replace rotted wood with fresh wood. And sellers can simply say they won’t do the work. Of course, they will be more apt to do the work in a buyers’ market and probably less willing in a sellers’ market. These can be expensive repairs and buyers may have to get used to incurring this expense as time goes on.

     

  • Real Estate Advice: Am I Able to do an Inspection before I close?

    Posted on February 21st, 2013 acimetta No comments

    Yes, you should have the option to do inspections before you close. In California, buyers typically have 17 days from acceptance to do their inspections. If within those 17 days, the buyers decide that they don’t like what they find, then they can walk away. If the buyers do their inspections, then remove their contingencies, then they are committed to the property and the deposit becomes nonrefundable.

    It’s extremely important for you to get your inspections done as soon as possible especially if you want to do any further negotating with the seller on repairs, a credit or a price reduction. If your looking at a single family home, I would always recommend a home inspection and a mold inspection. The home inspection will give you a general understanding of the roof, foundation, plumbing, electrical, appliances, HVAC, fireplace, etc. The mold inspection focuses on water/mold issues. So many buyers don’t do a mold inspection, but it’s so important. Water is absolutely damaging to a home and so many times there can be leaks or mold problems that the homeowner is not even aware of. Needless to say, I have all my buyers do a mold inspection. And depending on the age of the home and the existence of large trees on the property, I also suggest a video sewer line inspection which will let you know if there are any obstructions (such as tree roots) or clogging issues. Replacing a sewer line can be expensive and it’s a good idea to know up front what you’re dealing with.