Should You Really Buy That Home?Originally published in The New York Times
Falling in love with a house is easy when it seems to have everything you want. But what if there is more to the house than your eye can see?
A cracked pipe underground, a litigious neighbor, a long list of code violations — these are the kinds of red flags that buyers should look out for to make sure that seemingly ideal house doesn’t turn out to be a money pit or some other type of real estate nightmare.
In 2015, Dena Ferrara Driscoll thought she had found her new home: a four-bedroom, one-and-a-half-bath in South Philadelphia — an older house but one that looked well maintained and perfect for her, her husband and two children.
“We weren’t too worried something big was going to come up,” said Ms. Driscoll, 33, a grant writer for the School District of Philadelphia.
Unfortunately, they were wrong. “When the inspector came up from the basement, he had the grimmest look on his face,” Ms. Driscoll said. The reason: a cracked sewer pipe. Replacing it, the couple was told, would cost between $10,000 and $20,000.Continue reading the main story
“An older woman lived in the house,” Ms. Driscoll said. “She flushes the toilet only so many times a day. But a family of four? We were definitely going to create a problem with this sewer pipe.”
Their request for a credit to cover the work was denied, so they moved on and wound up buying a smaller house in the same neighborhood, but one where they didn’t have to worry about finding sewage in the basement.
Underground problems, bowed foundations, litigious homeowner associations and flips that are actually flops: A lot of things could put the brakes on a home purchase, and they might not be the things you notice while you’re at the open house. Here are three categories of red flags to keep in mind while you’re looking for that perfect house.
STRUCTURAL OR UNDERGROUND ISSUES
Finding an inspector who will be thorough is crucial once you’ve made an offer on a home. And just as you would ask around for recommendations for a broker, get advice on inspectors, too. A great home inspector will point out every single little thing wrong with a property; one that isn’t as good could miss a flaw that leads to big repair bills down the line.
When reviewing an inspection report, keep in mind that while a faulty outlet or a leaky faucet may be a nuisance – as can be negotiations with a seller over who will cover the repair – they’re often not enough to kill a deal. It’s those things that can’t really be fixed, or can be fixed only for a hefty price, that should have buyers reconsidering their dream homes.
“The biggest issue would be structural failure,” said Frank Lesh, executive director of the American Society of Home Inspectors. While one small crack in a wall may not be a big deal, a crack with a bulge around it, one that runs horizontally the length of the house or one with a deflection, which “means one part of the wall is going one way and the other part is going the other way,” Mr. Lesh said, are likely signs of major foundation issues.
Water intrusion is another red flag because of how destructive water can be, he added. Sometimes there is an easy fix: If gutters are clogged, clean them out; if downspouts are emptying at the foundation, reorient them.
“But if you live next to a river or creek that always overflows — well, you know that’s going to be a long-term problem,” Mr. Lesh said. “It’s just a matter of when.”
In 2011, water stopped a home purchase for Marcia Layton Turner, now 52, and her family on a house in Pittsford, N.Y. The house was the right size and had extras that made it appealing, like a barn that Ms. Turner, a writer, pictured using as a home office. But she and her husband were concerned that they could smell mildew in a basement guest room. They also spotted a dehumidifier running in another part of the basement.
The home inspector raised a flag about water issues too. He noted that one of the basement walls was cold and damp, which he said was a sign of drainage problems. The inspector recommended adding a French drain system, which would take water away from the house, so they lowered their offer to factor in the cost. Before they could negotiate with the seller, another buyer came in with a better offer. The couple eventually bought another home in the same town.
A few years later, Ms. Turner’s husband, who runs a hearth-products store, was back in the home they nearly bought to give an estimate on converting a wood stove into a gas stove. The homeowner told him that they had spent about $40,000 on repairs, including installing a French drain. “He said something to the effect of ‘Be glad you didn’t buy it,’” Ms. Turner said.
Other structural or underground items Mr. Lesh said to look out for in the inspection report: lead paint and asbestos. If the inspection does not include sending a camera down drainage and sewer lines, he recommended paying extra for it, especially if the home is older or near trees whose roots could be damaging pipes.
Another potential issue: unremediated oil tanks, which Lesh said are a big issue on the East Coast, because so many homes there use oil for heat. Removing oil tanks and cleaning up a spill can be expensive and complicated if a state environmental agency gets involved.
Most document-related issues tend to be flagged by brokers, the lender, an insurance company or a lawyer, if you use one. The title report is one place where a lot of problems are found, said Gemma M. Giantomasi, a lawyer in the real estate, development and land use group at Chiesa Shahinian & Giantomasi. A title search can reveal things like judgments against the property that would stick to the property rather than the seller; an undisclosed fire; or even that the home is not owned by the person selling it.
For homes in areas that are near water or have flooded in the past, buyers will also need a certificate that states that the house is at the proper elevation. If you’re shopping for a house in a beach town, it might also make sense to avoid the only house on the block that has not been elevated.
“You’re going to need to know if you’re going to have to raise the house or pay exorbitant flood insurance,” said Heather K. Colella, a broker who works in areas that were affected by Superstorm Sandy in 2012. She recommended not just looking at flood maps, but going to the municipality and asking for the elevation requirement.
The seller’s disclosure is another place to look for problems. But be wary of disclosures filled out by someone who hasn’t lived in the home for some time — or ever — which could be the case when a child is selling the home of a deceased parent, said Elizabeth Mendenhall, president-elect of theNational Association of Realtors: “If the seller has never lived in a home, you may not have an accurate picture of what has actually happened in that home.”
For a home that has traded hands frequently in a short period of time, she suggested looking at how much it sold for each time. If each sale was at a significantly higher dollar figure, the turnover could be a sign that the property is in a hot neighborhood, not that something is wrong with it.
For a house that has been flipped, Ms. Mendenhall advised buyers to demand proof that all contractors who have worked on the house have been paid. Otherwise, contractors could put a lien on the home – which would affect the new owner, not the flipper who stiffed them.
But flips aren’t always a red flag, Ms. Mendenhall noted: “It’s not necessarily a bad thing. In many instances, somebody has taken the time and care and made an old home livable to a new family.” The quality of construction, however, should be scrutinized.
In 2012, Nikki Carpenter, 32, a research foundation grant manager, fell in love with a 100-year-old home in Scotch Plains, N.J., that had been abandoned for several years before being bought by an investor and renovated. Not only was it in a town that she and her husband, Joshua Pellittieri, loved, it was also big enough for their expanding family: She was seven months pregnant with their second child when they made the offer. And it looked beautiful.
Their inspector, however, saw through that. The inspection report came back with a list of big problems, including standing water in the basement; a deck not built to code; a connector from the outside water main to the inside plumbing that had been installed backward; and hookups for a washer and dryer, but no drain for the washer or vent for the dryer. The inspector also found evidence of improperly removed asbestos.
The sellers “claimed they had no idea there were so many things wrong with it,” Ms. Carpenter said. She and her husband didn’t try negotiating a lower price, or ask the sellers to make repairs. “We didn’t really trust them at that point, and didn’t trust them to do anything further,” she said. They stayed in their apartment, which they rented month to month, and eventually bought a different house in Scotch Plains.
You can’t always pick your neighbors if they move in after you do, but you can get an idea of who is already there before you move in.
When considering a property that is part of a homeowners’ association or co-op, buyers will want a record of the association’s maintenance costs and any increases in fees to unit owners, said Moses Seuram, treasurer of theNew York State Association of Realtors.
“Ask them how long ago major improvements were done, how it was paid for, and was it through special assessment or reserves,” he said. If the association has been putting off maintenance or doing big-ticket repairs like a roof replacement or HVAC upgrade, buyers could be on the hook for a lot of additional costs very quickly.
Also be wary of any board or association that has often been sued or that does a lot of suing, warned Ms. Giantomasi, the real estate lawyer. Lenders will often balk at financing such purchases — and maybe these are not the kind of people you want for neighbors, either.
If the home is not in an association or co-op, look as closely as you can at neighboring properties and how well they are maintained. Hang out on the block at different times of day to get a feel for what it’s like after school lets out, at night and during morning rush hour.
And if you’re looking at homes in the winter, try to find pictures of the block in the summer, which could tell you if the neighbors keep their outdoor spaces tidy. (Google Street View is a good place to start.) Neighbors who don’t maintain their homes can be an even bigger problem if property like a driveway is shared and negotiations over shared repairs are necessary.
If the inspection report reveals issues caused by a neighbor’s property — like a crack in that shared driveway or water from the neighbor’s land draining into the home that is for sale — buyers or their brokers should see how open the neighbors are to making the repair before the sale goes through.
That could sink a deal for the seller. But it could also save the buyer a world of headaches if the property – and the problem – eventually becomes their own.
Date : 10/20/2017