“Red flags” are clues that something is wrong or potentially wrong. They’re the hints that we need to investigate something further, the sign that we should be on alert.
Some parts of San Jose, and Silicon Valley generally, enjoy beautiful older homes with classic styling and beautiful finishing work. These properties and neighborhoods are prized because they are not cookie cutter, not ranch, not too new. They may be Victorian, Craftsman, Spanish, or any number of other interesting architectural styles.
One area of Santa Clara County that is well known for both charming historic homes and unfortunately also some stuctural issues among those older houses is the Willow Glen district of San Jose.
On Saturday I showed some clients about a half dozen homes, all in Willow Glen, and we saw a lot of “red flags” which hinted of foundation problems, among others. I thought I’d share a few pics I snapped at one of them with my treo camera here. All of these were taken on the front porch of this house – all visible structural “red flags” before we ever set foot into the house.
Several times in recent years I have represented buyers in transactions where the seller’s side of the escrow seems to be a little messed up. In most of those cases, the problem was a result (directly or indirectly) of the home seller doing too much prep work before hiring an agent. That is really putting the cart before the horse, is a waste of money and it can cause harm to you, the seller, down the road.
In a couple of instances, the sellers ordered pre-sale inspections first and hired a real estate licensee later. What could be wrong with that? Like all professionals, there are better and worse inspectors (and better and worse companies). There are firms with fantastic reputations for honesty, thoroughness, and reliability. And then there are the duds.
Most of my real estate colleagues have a preferred vendor or two, but also have a long list of professionals whom they would trust to inspect a property and do a good job of it. Most home sellers, though, do not have much experience with inspectors and do not know these companies by reputation. More than once, I’ve heard sellers picking a national brand due to name recognition. That may be OK some of the time, but it’s sure not how most real estate agents would suggest hiring anyone!
When you hire a Realtor or other real estate licensee in a full service capacity (which is what happens most of the time), you are paying not for just the MLS entry, the negotiations, the fliers etc., but the whole transaction package, from start to finish. You’re paying for advice and guidance and that can begin long, long before there’s a sign in the yard. Why not take advantage of that guidance from the very beginning, with basic input on decluttering and staging and then which inspections to order – and for those, get a list of trusted sources from the real estate professional you hire.
As for the sales in which the seller made a poor inspection choice, in one case it cost that home owner about $10,000 and in another a lost sale.
There are many decisions you’ll need to make when selling your home. You don’t have to go it alone! Hire a great agent or broker to work with you and take advantage of your trusted resource from the very beginning. That will save you time, money and stress in the long run!
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Listing information deemed reliable but not guaranteed. Read full disclaimer.
Silicon Valley home buyers, sellers, and their real estate agents rely heavily on the professional advice, insights and opinions of home inspectors, whether it’s for the property generally (house, townhouse or condominium inspection) or for some other component, such as the roof, foundation, chimney, pool, heater, etc. One of the most frustrating – and sometimes maddening – experiences for everyone involved happens when these inspection reports disagree with each other.
Either extreme is bad, either “calling” something when it’s fine or missing something if it’s not. Often resolution is accomplished by having yet another inspector come out OR by having the two who disagree meet at the property to sort it out.
Here are some real examples I’ve experienced first hand over the years while selling residential real estate in Santa Clara County:
- Over-called: General property inspector called for “further inspection” of heater, roof, or chimney because he said something’s wrong. Further inspection ordered by buyer or seller, and paid for by consumer – but the professional for that aspect of the home says it was just fine. Is it fine or not? The home buyer or seller is out some money and one of the two reports says there’s a problem with it but the other says it’s OK. (This happened a few times where the general inspector “called” things that experts said were in good working order. For that reason, I had to stop recommending him to my clients and began working with another inspector who wasn’t so over-eager that he called things which were not bad.)
- Crawl space nightmare: many homes have crawl spaces and if yours does, it’s important to either go down there yourself or have someone else do it for you periodically to check conditions there. My buyers were purchasing a home near Carlton Elementary in Cambrian (Los Gatos border) and the pre-sale pest or termite inspection (the only one available) was from a company with the absolute worst reputation in the valley, and that report said that there was not one thing wrong in a 50 year old house (highly unlikely!). We ordered new inspections, both home & pest. Both my inspectors found a lot of damage in the crawl space, amounting to about $10,000 in damage not reported by first inspector. The seller’s inspector had claimed to go into the crawl but it was evident that either he didn’t go or he didn’t do it thoroughly. The seller wanted his inspector’s company to do the repairs but we negotiated for a more reputable provider and got it. Continue reading
What is the purpose of a home inspection? Many real estate professionals would say that it is to uncover defects. While that is certainly true, I’d like to suggest that property inspections can be of much broader use than merely learning what’s wrong. For new home owners, or soon to be home owners, it’s a great chance to learn about all the components of your house, condominium or townhome, and how to maintain it well going forward.
Whether you are in escrow to purchase the property or you are a new home owner who purchased without inspections (or contingencies), it is wise to take a half day off from work so that you can be present for the inspections and learn about your home and how to maintain it for the long haul. A good property inspector will not mind your accompanying him or her throughout the property and will explain to you what you’re seeing. Many times, you will get helpful tips that will not make it into the written report, so bring along a notepad and pen. You may hear your inspector say “this is fine now, but you’ll need to replace it in about 5 years” or “if you do such and such, this will last a lot longer”. These are helpful things to know! Your inspector may also reveal that some items are functioning now but should be watched carefully. “Check the crawl space when it rains to see….” or “this is probably not an active leak, but no one has lived here for a year, so recheck this in 6 months” or…. you get the idea.
Home inspectors can only see what’s visible, and some bad conditions may be hidden. In general, though, you want to have a qualified home inspector out every 7 years (and a pest inspector every 3-5) so that if your home is developing any problems, they can be caught and addressed while more manageable.
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(all data current as of 3/26/2017)
Listing information deemed reliable but not guaranteed. Read full disclaimer.
If a house or other building is going to be fumigated for drywood termites (not subterranean termites), certain things must be done for the tent to go on and to effectively seal the structure. We call that “fume prep” work or “fumigation prep” work. It is sometimes included in the cost of the fumigation, and sometimes not – so if this work is being done at your property, be sure to ask if it’s part of the bid! If it’s not included, there are companies that can be hired to do these jobs if you do not want to or cannot do them yourself. (If you need one in Silicon Valley, please email me and I can give you a name or two.)
Anything which obstructs being able to enclose the home or building must be cut back, disconnected or removed. For instance:
- fences or gates which touch the building must have a few slats or sections removed so the tent can be placed next to the house
- bushes, hedges, trees and other plants which are adjacent to the house must be trimmed back or pulled away as much as possible – at least 12″ from the structure (if trees are touching it, they must be trimmed)
- any other structure such as a trellis or deck must either be included with the fumigation or separated from the house so that a tent can go between it and the house
- downspouts connected to French drains must be disconnected at the ground
- loose gravel, tanbark or mulch needs to be raked back or removed at least 12″
- any stored items up against the building must be removed Continue reading
How much extra money will it take, beyond the down payment, to purchase a home in San Jose or Santa Clara County? The answer varies, depending on what, where, and how you buy. Today I’ll offer some general information on home buyer‘s closing costs in Silicon Valley.
Just need a rule of thumb on the costs? A generalization, a really rough estimate is two percent of the purchase price, but your actual figure could be substantially more or less, depending on many factors. If your loan is a “zero point” product and if you do not need to pay for inspections, your costs should be between .5% and 1% of your purchase price. If you have an FHA backed loan or for credit reasons decide to buy down your interest rate with points, that will be expensive. If you buy a home that needs a lot of inspections and specialized ones to boot (structural engineering report), your costs will be higher. And, of course, if you buy a fixer upper “As Is”, your costs will be higher still.
What makes residential real estate closing costs vary so much? Continue reading
The real estate contracts in use in Santa Clara County (PRDS and CAR forms) both include a space for stating how many days are requested for the property condition contingency, which includes inspections as well as other investigations. How much time does it usually take? The CAR contract has a boilerplate number of days offered, 17, as well as a blank. The PRDS doesn’t make any such suggestion.
In Silicon Valley, unlike most of the rest of California, most home sellers provide pre-sale inspections for viewing by potential buyers. Often it’s at least a termite or pest report plus a home inspection. In many cases the disclosure package includes not just these two inspections, but others as well, possibly roof, chimney, or other components.
When there are no pre-sale inspections available for home buyers to read prior to writing the offer, the number of days requested for inspections tends to be longer. In this case, prospective buyers don’t really know the condition of what they’re purchasing so they will need a couple of weeks or more, in most cases, to be satisfied that they understand the condition of the property. Sellers are far less likely to see non-contingent offers or contracts with short numbers of days for investigation if the buyers aren’t given full disclosure upfront. Continue reading
Planning and Budgeting to Sell Your Silicon Valley Home
Preparing your San Jose area home to sell should be done enough in advance of when you want to have your home go on the market that any unplanned repairs can be completed first (without a lot of time pressures) so that you net the most money possible from the sale. It’s hard to know how much time to allow for the unknown, but my suggestion is to provide yourself a month or two, if possible. Three is even better. If you want to sell this upcoming spring, it’s smart to get started on your plan now.
In Santa Clara County, we have very mild winters and it’s not usually difficult to get most repairs & remodeling done even in winter (unless they are “outside” repairs and we’re in the middle of a rare El Nino year). If you start now, you should have no trouble finding inspectors (presale inspections are more than just a good idea!) and contractors. If you wait ’til March, you may not be on the schedule of your own choosing.
So where to start? What to budget?
In my experience, most Silicon Valley homes that have been lived in for many years often have 1 – 2 % of the value of the home needed in repairs, landscape freshening and staging prior to going on the market. The longer you’ve been in the home without doing periodic inspections for termites and other pests, on the roof or structure of the home, the more likely that number will creep upwards. If your home is young and you’ve been there a short while, chances are good that this doesn’t apply to you. Continue reading
Whether you’re preparing to sell a home or are in contract to purchase real estate in Silicon Valley, you likely will be faced with the prospect of hiring professionals to inspect your home. This can run hundreds of dollars, a thousand dollars or more. The potential liability, though, could be much higher than the cost of paying the professionals to inspect your home, so you’ll want to hire very carefully.
So, what must you know when selecting inspectors in the San Jose & Santa Clara County area?
First, there are different types of inspectors:
There are inspectors who focus on particular elements of the property, examples being termite or pest inspectors, chimney and masonry inspectors, foundation & drainage engineers, pool inspectors, heating & air conditioning inspectors and more. Generally, these are all licensed by the state of California, and they may perform repairs on the items they find in need of repair. The two go together – licensing and being allowed to do repairs.
But this is not true for property or home inspectors. There is no license for doing house or condo or townhouse inspections in this state. Is that good or bad? Part of that package is that they can’t do repairs on problems they find. You can see why it’s good to separate finding problems from being paid to fix them. That’s the plus. There is another side, though.
Recently I met with some of my past clients, who purchased their San Jose house close to the height of the market (2005-2007). In those days it was a hot seller’s market (not unlike many parts of the Silicon Valley real estate landscape today, actually), and buyers routinely purchased their homes “As Is“, meaning no repairs provided by the sellers. Desperate to get in when prices were appreciating fast, it seemed that most home buyers said “we’ll take care of it after we own it“.
But they forgot.
Actually this didn’t just happen during the peak of the market here in Santa Clara County – there’s always a percentage of consumers who buy As Is to get a better price. They have good intentions about taking care of the mold, the termites, the roof and whatever else might not be either in good working order or free of infestation. But once they move in, the “to do list” doesn’t seem to have those items as a high priority, and over time they completely fall through the cracks.
Pull out your old file, find your inspection reports and review them, especially if you are preparing to sell your home
Today I want to encourage you to dig out your old home inspection and pest reports, dust them off, and have a look. Did you need to address a problem with termites, electrical issues, leaks? Is there something to take care of with the roof, gutters, dry rot or fungus? All of those things do not self-correct, but instead grow worse over time. Continue reading