Tag: purchasing a home

PERMITS: OPEN PERMITS CAN THROW MONKEY WRENCH INTO PURCHASING A HOME

Home Improvement

BUYING A HOME – MAKE SURE THERE ARE NO OUTSTANDING PERMITS

OH NO! OPENS PERMITS DELAY HOME CLOSING
OH NO! OPEN PERMITS DELAY HOME CLOSING.
 
Yesterday, we received a call for help.  This call, however, was not because the house needed a repair. A woman wanted to sell her mother’s home… but, there was an outstanding permit that had not been closed. The daughter had no reason to suspect that an outstanding permit existed on the home.
After a few minutes on the phone with her, I was able to determine that there had been an open permit since 1995.  Yes, back in 1995, the seller’s mother had an alarm system installed and the permit was never closed. To make this more challenging, the company that installed the alarm system is no longer in business.
Now, the seller will have to hire another company to inspect the alarm system, re-open the permit, and get it inspected.  These are all unexpected costs and delays that may make her lose the sale.

BEFORE BUYING / SELLING A HOME

Just like when hiring a home remodeling professional, do your due diligence before buying or selling a home. Repair or remodel work may not be obvious during a visual inspection of the property.

Buyers should request that the seller disclose work that was performed  – even years ago. An outstanding permit issue may lay dormant until you try to modify an electric panel, remodel a room or repair a heating system and then find that previous work was not officially inspected and approved.

Sellers should also verify that no outstanding permits exist on their property.  They may have hired a contractor who did not complete all inspections.

CHECK FOR OPEN PERMITS ON A PROPERTY

Buyers/sellers can request that the title company run a courtesy permit history search, which should reveal all permits — whether pending or closed — on a property. Of course, this may be too late in the game.

search permitBuyers can take the initiative and look up the permit history of a property by contacting the local regulatory building department for their area. You can do many of these searches online, without having to pay for it.

For example, in Wellington, Florida you can search by your property address on the e-permit page of the Village of Wellington Website.

For addresses in unincorporated Palm Beach County, search the “Building Permits and Inspections” (a link to the Palm Beach County Planning, Zoning and Building Page.)

WARNINGS

Open permits or building code violations may not be listed in the preliminary title report nor be covered by your title insurance policy.  It is important to clear up un-permitted work early on and avoid a possible delay in the closing.

If you have work performed on your home, make sure it gets done by a licensed contractor.

When you hire a licensed contractor, he or she will be responsible for obtaining a permit for the work to be performed and closing out the permit after the job is completed. Ask your contractor to give you a copy of the closed permit for your files.

Work done without a permit can also cause problems for a new owner.

The residential alteration may have been completed according to the local building code, but if no permit was filed, the new owner may be liable for a fine. And if the work is found to not be up to code, the new owner will be required to correct the problem, bring the alteration up to standard and get a final inspection.

BEFORE purchasing a property – have a professional remodeling contractor, like Leading Edge Homes, Inc. inspect the property to see if there are outstanding permits, work that was done improperly, or if work was done without a permit.

Please note: This article is for information purposes only. It is not meant to provide any legal advice. I recommend that, if you have any questions about the clauses in your contract or the suitability of the home you wish to purchase, you discuss them with a real estate attorney.

If you want a professional remodeling experience or a home inspection with a home remodeling expert’s view, contact your local design-build contractor, Leading Edge Homes. Inc. Want to see some of our work? Visit our website or view our online book.

Knowing your options now, will help you be prepared in the future. If you are buying a home, knowing what needs to be corrected and the costs to do so, can help you decide if the home is right for you.

For all of your home remodeling and inspection needs, contact your local certified “roomologist”, Leading Edge Homes. Inc. at 561-795-2551.

Todd Perry, a State of Florida Certified Building Contractor and president of Leading Edge Homes, Inc., provided this information.

If you have questions about a home improvement project, call Leading Edge Homes at 561-795-2551 or email Todd at: todd@leadingedgehomes.com and he’ll be happy to share his knowledge with you.

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BUYING A HOME – WHO REPAIRS THE HOME?

Buying a Home, Home Improvement

BUYING A HOME – WHO REPAIRS “PROBLEMS?”

Buyers and sellers disagree on who is responsible for repairs

Buyers and sellers often disagree on who is responsible for repairs.

THREE HOME INSPECTIONS – THREE DIFFERENT OUTCOMES

Leading Edge Homes, Inc. conducted three home inspections within the last month. Not surprisingly, all of the homes had issues – which is normal!
Who is responsible to correct the issues? The sellers naturally don’t want to make repairs and incur costs to sell a house in which they will no longer be living.  The buyers, with justification, want their “new home” to be free of defects. So, who’s right?

Usually, buyers and sellers negotiate a compromise that allows their transaction to move forward.

BUYER 1 – WANTED REPAIR MONEY

This doesn’t always work out. Buyer 1 knew the cost of the repairs and tried to get the seller to lower his price. The buyer did not want the seller to do the repairs because he did not have control over the quality of the work.

The seller decided to stand firm with his price and wasn’t willing to compromise. Consequently, the buyer walked away.

SELLER’S RESPONSIBILITY TO FUTURE BUYERS

Sellers should be aware that a buyer’s inspection report can be problematic for them because if the deal doesn’t close, they could be obligated to tell subsequent buyers about any defects mentioned in the report.

BUYER 2 – AGREED TO LET THE SELLER MAKE REPAIRS

Buyer 2, after allowing the seller to make some repairs, is going through with the purchase – even though some of the repairs were not made correctly.  They are considering the remaining repair’s costs as part of purchasing the new home.

BUYER 3 – CONTRACT WAS “AS-IS” AND KNOWS HE HAS TO MAKE REPAIRS

Buyer 3 went into his purchase with his eyes wide open and did the proper inspections. The buyer was allowed to make inspections, but his contract stated  that any inspections were for “informational purposes only”, i.e., to inform the buyer of the property’s condition. Of course, this type of contract only benefits the seller.

The buyer discovered there were roofing issues. The contract, however, was “as-is,” and there was no room for negotiation.

Unbeknownst to the buyer, however, his financing was contingent upon the roof passing the home inspection. The finance company even wanted the buyer to make repairs before purchasing the home.

SHOULD THE BUYER MAKE THE REPAIRS BEFORE CLOSING?

Unfortunately, Buyer 3’s experience is not uncommon today. Banks are getting stricter. Some options, if the finance company/bank will allow it, is to escrow the money for the cost of repairs.

If the finance company insists on the repairs, you can amend your contract with the seller and include the cost of the repair in the purchase price. Then if they are willing, request that the seller make the repairs. The downside to this, however, is that if you fail to close on the property, you may lose your funds.

At the discretion of the seller, you may be allowed to make the repairs yourself. However, the seller must cooperate with this scenario – but many sellers and listing agents may not let you do this. In addition, if a permit is required for the repair, you won’t be able to do this because, in Florida, a Notice Of Commencement must be signed by the owner prior to getting a permit.  The Notice of Commencement contains detailed information about the project such as property owner, financial institution, jobsite address, contractor, etc., and protects the property owner’s title to the property. Also, an open Notice of Commencement could cloud title on the property making it impossible for you to get title insurance.

BUYERS BEWARE – READ YOUR CONTRACT CONTINGENCIES

Buyers and sellers should always read the inspection and repair contingencies of your real estate contract and make sure you understand them. The contingencies will determine who is responsible for what, what negotiating power you have, the scope of inspections and repair clauses.

The contract may say – no repairs, only repairs to certain items, who will do the repairs, and may even have a maximum amount for the cost of repairs.

Some contracts benefit buyers; others benefit sellers

To illustrate the point, there are contracts that allows the buyer to obtain a general home inspection and then give the seller a copy of the inspection report, indicating which repairs are to be made or stipulating a dollar amount credit in lieu of repairs.

Some contracts state that the seller can then make the repairs, agree to the credit or propose another arrangement, which the buyer can accept, negotiate or reject. This is best for the buyer.

Other contracts state that buyers can insist only that true defects or building code violations be corrected.

 

Please note: This article is for information purposes only. It is not meant to provide any legal advice on obtaining repairs for your home purchase. I recommend that if you have any questions about the clauses in your contract, that you discuss them with a real estate attorney.

If you want a professional remodeling experience or a home inspection with a home remodeling expert’s view, contact your local design-build contractor, Leading Edge Homes. Inc. Want to see some of our work? Visit our website or view our online book.

Knowing your options now, will help you be prepared in the future. If you are buying a home, knowing what needs to be corrected and the costs to do so, can help you decide if the home is right for you.

For all of your home remodeling and inspection needs, contact your local certified “roomologist”, Leading Edge Homes. Inc. at 561-795-2551.

Want to see some of our work? Visit our website or view our online book.

Todd Perry, a State of Florida Certified Building Contractor and president of Leading Edge Homes, Inc., provided this information.

If you have questions about a home improvement project, call Leading Edge Homes at 561-795-2551 or email Todd at: todd@leadingedgehomes.com and he’ll be happy to share his knowledge with you.

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