In a Litigious Society...

Real Estate Agent with Coldwell Banker Previews International 01236148

A decade ago, if someone brought up the word "mold" in a conversation, it more than likely had something to do with food gone bad, or a bathroom in need of a good cleaning.

Today, just mentioning the word sends a shiver down the spines of principals involved in a real estate transaction, as well as their agents.

A suggestion, or, "idea," if you will:




All defects

This "rule" applies to both Buyers and Sellers.  As a Buyer, you want the piece of mind you and your family will be free of any health and safety hazards.  There is, of course, a caveat, which I will explain at the conclusion of this post.

As a homeowner and potential Seller, nip this nightmare in the bud by periodically inspecting and maintaining, just as you would with regard to termites, and the rest of the ongoing maintenance that goes hand in hand with ownership and the pride thereof.

Example: a transaction I was involved with not too long ago, I was representing one client as both their listing agent, as well as representing them for their purchase.  The combined value of the inventory in question was close to 5 million; no small matter.

My clients asked me about inspections, what was required, etc.  I explained that the majority of inspection costs here in California are incurred by the Buyer, and not always necessary to close a transaction.  It is important to point out there are no guarantees that once they pay for and inspect the property, their purchase will move forward and close.  In fact, a Buyer's Inspection Advisory was incorporated into the standard Residential Purchase Agreement (RPA-CA) by the Dept. of Real Estate approximately six years ago.

The exception is the termite inspection, a seller's expense.  And, contrary to popular belief, termite inspections and repairs (if any) are necessary only if the lending institution providing the buyer's loan requires a termite certification. 

Other than the issue of their purchase property was a cosmetic fixer, it appeared to be an outstanding find.  We negotiated the transaction, opened escrow, and the physical inspection was ordered to take place during the time frame set forth in the purchase agreement.  Since the contracted inspection company did not include mold as part of their service, the question of having a separate inspection inevitably came up.

I advised that it was an additional expense, one they had to decide if they wanted to incur.  Naturally, as with the standard physical inspection, my clients chose to inspect.  In addition to faulty wiring, a leak in the roof the seller failed to disclose, and various other items found during the physical inspection, the contracted mold inspector did indeed find mold in the family room, and my clients were informed there was approximately $10,000 worth of mold remediation recommended.

When the seller said they were not willing to pay for any additional repairs, I found myself in the familiar and uncomfortable position of pointing out to my clients that they were not willing to pay for the mold work at THEIR property, still in escrow.  I repeated what I had told my clients at least 10 times during the five months we had been working together: while Buyer's in the state of California have the right to perform due diligence by inspecting, and subsequently request the Seller make repairs, all sales in California are "as is" sales, that it's the Seller's commodity, and ultimately up to them as to whether or not they will make the repairs to facilitate the transaction.

That said it's almost always in everyone's best interests that the Seller make any reasonable repairs.  For instance, if an electrical panel is found to be faulty, outdated, not to code, etc., that is a safety hazard and a reasonable request.  If the Buyer doesn't like the color of the exterior paint and requests the Seller re-paint the house, the Seller more than likely will not oblige.

The moral: Always inspect and be prepared for a subsequent negotiation(s).  Just because you've managed to negotiate a purchase price, that by no means constitutes a transaction that's ready to move forward and close escrow.

Call Hermosa Beach local Mike Boito for all your financial needs!


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