Silicon Valley Homebuyer Tip: Check the Property History of the House You Like
What is the benefit to a home buyer in knowing that the home sold recently? There are really two advantages: first, if it’s a normal sale (not distress), you can get an idea of the sellers’ equity. If it was a short sale or bank owned property, you may learn that it is a “flipped” house – and that would bear some extra investigating (did they get permits, did they do the important items which you cannot see, etc.). More importantly, though, if the current owners bought the home not too long ago, you may be able to read the prior inspections and disclosures.
Sometimes sellers – and sometimes even their real estate agents – are reluctant to admit that they saved this type of information. But if they hired the same Realtor who assisted them in purchasing this property (also reported on the MLS), that agent would have access to all of the disclosures and reports. California state law demands that brokers save all transaction records for three years. Homeowners and their agents usually save them for many more years than that, though. (Sometimes agents move brokerages and this can make it more challenging to get full and complete records.)
So back to the issue of buying a property that sold not too long ago. Let’s say you have found a nice bit of real estate in San Jose (a house, condo, townhouse) which you want to buy, and perhaps there are recent improvements, updating or remodeling, “permits unknown“. The best way to get clarity on the situation is to then ask for the prior disclosures, inspections and reports. It is imperative to get everything because clues may turn up in any of these documents. Often the current owner will not recall the story if the work was done by prior owners, and will not think to check the original paperwork. But by reading through it, you may learn what the status really is – whether there are permits and finals or not, for instance.
Particularly when buying a home that sold in recent years, you can leverage your knowledge to improve your ability to purchase wisely.
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