Why do real estate agents do a visual inspection of the properties they sell?

What is the agent visual inspection, or AVID, and why is it required with home sales in California?

The short answer on the purpose of the AVID

When real estate sales people represent buyers and sellers on residential real estate transactions in CA, they must do a visual inspection of the property as part of their disclosure obligations. In other words, they are required to walk through the property, inside and out, and look carefully at what they sell and advise the parties to the contract of any red flags noticed.

This is required by the state. It is not optional.

If an attentive Realtor walks through and notes something that would make a buyer unhappy to discover after close of escrow, that agent needs to note it on the required form so that any such concerns are disclosed to the home buyer(s).

Video discussing the AVID, or Agent Visual Inspection Disclosure

 

Where do the agents write up their visual inspection disclosure comments?

 

Agent Visual Inspection Disclosure, top of page 1

Agent Visual Inspection Disclosure, top of page 1

 

Sometimes the real estate licensees will simply make a few comments on page 3 of the Transfer Disclosure Statement (TDS).  More and more, though, they are completing the separate 3 page AVID (Agent Visual Inspection Disclosure) form instead.  It is larger and allows for more thorough list of items noted. Both approaches are permitted by law to fulfill that obligation, though.

 

Why is the AVID required?

(more…)

Buying a townhome

Buying a townhome - consider the grounds! Photo of townhomes in west San Jose - Cabernet Vineyards Circle, San Jose CA 95117 Front of home & walkwayBuying a townhome in the next year? Here are some pointers to help you get up to speed more quickly.

There are a number of things to ask about and learn to make sure that you are happy with the end result of your townhouse or townhome purchase. There’s tremendous variation in townhomes across Silicon Valley, how well the property is managed, how well the finances are managed, how happy the residents are, and so on.

I’ll put my tips into 3 categories: (1) before you go, (2) things to consider while there, and (3) research if you are serious about a particular property.

  1. Before you go – there may be things that will take the property off of your short list, such as the property condition, HOA finances or rules. There may be natural or environmental hazards that cause you to skip it. Usually these can be learned before you ever visit the property, and they can save you a lot of time.
  2. Things to note or consider while there – some tips on what to perceive while in and near the property.
  3. Deeper research if you are serious about buying a townhome or townhouse

Buying a townhome: a little pre-visit recon

Your real estate agent may help you with this – I do with my buyers and we can sometimes eliminate non-starters with a little research. Most people interested in buying a townhome or condo will check these out upfront:

  • Maps: Take a look at Google maps and see what can be learned from Google street view and the satellite image, if possible. Street view may provide info on how crowded a complex is and if there’s a parking problem if the townhomes are directly on public streets.
    • Sometimes there are undesirable buildings or structures right next to the complex you’re planning to visit which may be visible from either the satellite or street view. The negatives usually don’t make their way into the MLS photos, so look at these other views to get a more complete sense of the area. Recently I saw a power sub-station directly next to a unit my client wanted to see. We did visit it anyway, but many home buyers would have skipped it. You can often identify high voltage power lines from the maps, too.
    • The Google Satellite View will alert you to undesirable neighbors. Recently we saw a unit that backed up to something odd looking – turned out to be a gas station.
  • Odors: If you are buying a townhome in South County or in an area where farming takes place, be sure to zoom out on the map view to see if the property might be impacted by farm smells. In Gilroy, San Martin, and Morgan Hill, mushroom farms can be smelly if you are downwind. And…garlic happens. In Milpitas and North Valley, there are a number of odors, particularly as you get closer to the bay.
  • Natural and environmental hazards: you can find out upfront if the property is in a 100 year floodplain, liquefaction zone, near gas transmission lines or near a Superfund site. There are links to maps for almost every kind of hazard out there.  For example, the Cal OES My Cal Hazards Awareness site can provide info on liquefaction, flood, quake, and fire zones.
  • Disclosures: you may be able to get them upfront and skim for the local hazards, expensive repairs needed, etc. Most of the time we can provide these before you see the home. Keep in mind that no condo, townhouse, or house is perfect, and most do need thousands of dollars in repairs, replacements, and upgrades. A good rule of thumb is to budget 1% for a condominium or townhouse.

In person visit – when you visit the townhome

Again, your Realtor should help you to see what’s amiss or what’s a big plus as you go through the grounds and the home. No home is ever perfect (not even new construction), but it’s imperative that buying a townhome you have as full knowledge as possible about it upfront.

Once in awhile, a buyer will not get the value of this input. The majority of buyers, though, appreciate it if their buyer’s agent makes sure they see things upfront, while there together. (more…)

Increasing demands by some listing agents on what is to be included with purchase offers

Offer checklist for some listing agents in Silicon Valley

For a long time, Silicon Valley real estate agents have expected home buyers to be preapproved, not just prequalified, for a mortgage or loan when they submit an offer to buy a property.  So the offer package would consist of an agency disclosure, the contract (PRDS or CAR), and a preapproval letter from the home buyer’s lender.  (Some listing agents require the buyer to be preapproved with the listing agent’s lender. This is especially true with REOs.)

Over time, a few disclosures got signed to go with the submission, too – such as one on the dangers of writing non-contingent offers, another on brokers potentially submitting offers for competing buyers, etc.

When the market gets overheated, as it is now, listing agents begin to require even more things upfront, with the offer – not after it’s been accepted.   In many cases, listing agents want all disclosures signed upfront, plus the covers of any inspections.  This often means initialing and signing 60+ pages.

Cash offers traditionally come with “proof of funds”.  That means bank statements or eTrade or other statements proving that you’ve got the money.  Sometimes it’s a portfolio showing how much stock one owns. (Last week I got 22 offers on a listing and one agent, who”s been in the business for decades, showed me his preapproval letter when I asked for the proof of funds. He didn’t understand.) Naturally, we black out or white out or otherwise obfuscate the account numbers for safety’s sake.  In recent years, though, the strongest offers come with proof of funds no matter the size of the down payment.  Many Realtors in the San Jose, Los Gatos, and Saratoga areas expect it.

Buyer’s agent: do your visual inspection upfront, too….

(more…)