Natural Hazards, where does the fault lie

When meeting with new clients, I always have a conversation about natural hazards.  The reality is, one will have to determine their comfort level when it comes to natural hazard zones before they enter into a particular transaction.  Many of my clients feel that it is inevitable that one will live in an earthquake fault zone, while others are adamant about living outside of that zone.  Additionally, there are other hazardous conditions such as high fire, liquefaction and landslide to consider.  In this seller centric market, many buyers will overlook hazards to win a property, but keep in mind, when a market shifts and inventory is higher than the buyer demand, some buyers may be discriminating when it comes to what they will accept or not.  Last fall, I had a heart-to-heart with buyers who were strongly considering a home with the trifecta of natural hazards: earthquake fault, landslide and fire zones.  I shared with them this could potentially impact future resale value.  After sleeping on it, they decided not to write an offer.

This interactive website was provided to me by one of the structural engineers that I have worked with. http://pubs.usgs.gov/ds/2006/177/HF_zoom.html

Buyer Beware - all that sparkles does not shine

Last month, I showed some clients an attractive house in one of our solid Oakland neighborhoods. The marketing campaign advertising this home as “all new” was an asset to my clients. They have good jobs and credit but, like most new homeowners, they can’t absorb the cost of any major repairs right now. The house had all the sparkle of a fresh remodeling project: fresh paint, granite counters, stainless steel appliances, new landscaping etc. It was the right house, in the right location, in apparently superb condition.  My clients were excited and, after two visits to make sure, wrote an offer that was accepted. Next came the inspection period. Although everything looked perfect on the surface, it was still important to have reputable professionals give their independent opinions. The back story on this house is that it was purchased at a foreclosure sale, all cash, by a group of investors. They prepared it for resale and marketed it as having $80,000 worth of improvements.

Our inspections began with a three hour examination of all systems by my favorite home inspector. He checked the roof, the crawl space, and everywhere in between. What he found was substantial pest damage to the structure, an outdated electrical system with glass fuses, potential drainage problems, and a sewer connection that was inaccessible for video inspection. Based on this we got a drainage consultation from an expert who advised us that the house some of the work done to improve the house was not done to building code standards, that it needed $40,000 to $50,000 worth of structural work, and that we should get an engineering inspection, at an additional cost of $500, to confirm that this work would be enough.

Sadly, I sent my clients’ cancellation notice to the seller today. They spent several hundred dollars on inspections and had their hopes raised and crushed by the entire incident. But that is a much better outcome than they would have had if they had relied on superficial impressions given by the remodeling work. All buyers should have inspections on their properties. Whether it’s old, new, or “flipped” like this one.

What to Inspect When You’re Inspecting

Tips On Home Inspections

All home inspection should be done by an ASHI (American Society of Home Inspectors) certified inspector. These guys will look at everything from the foundation to the roof. They’ll inspect the electrical, plumbing, roof condition, foundation and everything in between. An inspection can cost anywhere from $585 to $ 650, depending on the size of the home.

Pest inspection of termites or beetles and all water damage. Approximately $235

Sewer – buyers are responsible for sewer lines until they hit the city main. For $75 your inspector can take a video camera into the pipe to check the condition of the pipes.

When to Get a Second Opinion:

Pest/Termite Inspections:

Recently a seller supplied an inspection report that had been done by an out-of-area pest inspection company. The report stated that there was no pest damage to the seller’s property.

I encouraged my buyers to get a second opinion.  My clients employed a highly respected local company to do another inspection. The local company found $6500 worth of pest damage. Ultimately, I was able to negotiate a $6500 credit for this discrepancy.

Sometimes home inspectors will call for a second inspection. It could be for anything from electrical wiring follow up to having a structural engineer come to look at the foundation.

Anytime that this is suggested it is recommended that you have professionals look before removing your inspection contingency. (An inspection contingency is a period of time during an escrow that a buyer is allowed to investigate the condition of a home and neighborhood.)

Jason - Harry Clark 

Paul

what's behind there

Rot

Sewers, the Dirty Truth

Within in the last decade having a sewer lateral inspection has become standard during the home buying and selling process.  Many Bay Area cities require that a sewer line be in compliance, (working order, not made out of terracotta and having no major cracks) prior to close of escrow.  Oakland and Piedmont, cities that currently do not have this ordinance soon will. Since homeowners are responsible for their sewer lines until it connects to the city main; home buyers want to know the condition of the sewer line before they buy a home.  Depending upon your property, a sewer line can cost anywhere from $3000 to over $10,000 to replace.   I recently found out that if I need to replace my sewer line in the future,  I could not do it in a trench-less fashion.  (Trench-less sewer replacement is when a a plastic material is inserted into your existing sewer-line.) Jason, from Harry Clark, told me that my lot has no slope to insert the plastic, so my concrete walk-way will need to be removed and the old sewer line dug up to make this improvement. Exterior Clean-outs: Some homes do not have an exterior clean out. (sewer clean outs are often situated near the house, providing a point of access.) What does it mean to have an exterior clean-out?  1. If your sewer line backs up, it will typically back sewage into your home.  Possibly through the shower or laundry sink.  This can be a gross mess to clean up!  2.  Often sewer-lines have many bends and turns, so without a clean-out it is often difficult to video and examine a sewer-line.  The cost to install an exterior clean- out is typically under $1000.

I recently represented a buyer as she purchased a home in the Redwood Heights district of Oakland.  There was no clean-out at the property in question, so there was no way to view the entire sewer line without installing a clean-out.  My client decided that she was definitely going to purchase the property, so she was willing to invest the $885 into installing the clean out before close of escrow. (We had to obtain the permission of the seller first.)  Once the clean-out was installed the line was able to be scoped and videoed, and it was determined that the line was made of terracotta and it was in satisfactory condition.  My client also understood that there was no need to replace the sewer-line as it was in good shape, but if she sells her house in the future and the line will need to be replaced as Oakland will soon have a sewer line ordinance passed. (requiring that all clay/terracotta be removed.)

At the end of the day, it is my goal that my clients understand the overall health of their home and that includes the waste pipe.  There is so much more to that flush!