Home Purchase – Seller Disclosures And Inspections
Very Important
Our Offer Was Accepted – What Now?
(This information is written for Colorado consumers. It may or may not be applicable in other states.)
Great! You are “under contract” with a number of contingencies in the agreement that are there to protect you. One of the most important is the inspection contingency. It is time to exercise your due-diligence.
You either have or will shortly receive the “Seller’s Property Disclosure”. This is the multi-page document in which the seller identifies the condition of various components of the property. When you sign it, you are acknowledging receipt of the document but NOT accepting any of the conditions contained therein.
Do Sellers Always Tell The Truth?
Absolutely…….Not! There are penalties for lying on this form. The problem is that enforcement is difficult and even more-so if the seller relocates out of state. It is really your responsibility to carefully inspect your prospective home.
Trust But Verify
One of our recent U.S. Presidents believed in the above phrase and it worked pretty well for the United States. You as a buyer will want to check and confirm EVERYTHING. You should expect a lot of assistance from your buyer’s agent. If you do not have a written agreement with the person assisting you then that person is NOT your agent and you are on your own. Some “non-agent” brokers may steer you to an inspector known to be less than thorough.
Home Inspection Tips
Start with hiring a really great inspector. If you have an agent who is really on your side and you have investigated their credentials then your agent will be a good source. If not, check with friends who have recently purchased. Ask the inspector for references and a resume’. It is far to easy to attend a several day “inspector” seminar and leave with a “designation”. My favorite inspectors are those who have real experience in the construction industry. You will want the traditional “house” inspection and, depending on conditions, a test for the presence of radon gas and a “scope” of the sewer line. I like the sewer scope in all cases and we have found problems even in new homes. It is a “must do” with older homes. Some situations suggest a professional inspection of the furnace or boiler. Other inspections are available depending on the situation.
Should we be present for the inspection?
Absolutely! I had one experience where a client engaged an inspector not known to me who refused to allow us to accompany him. That was the only time. Most inspectors want you to be there to take notes and to learn more about your home. I have been on many hundreds of inspections and almost always learn something new on each.
What happens if there is a problem?
It has always been my position that a seller has a certain responsibility to deliver a house free of defects that affect health, safety, operation of major systems and structure. I work really hard for my clients to get those corrected and by staying away from other type items in the “Inspection Notice” have pretty good success. You are well protected in Colorado because the agreement provides the buyer with the right to terminate following an inspection subject to buyer’s “subjective” opinion.
If you have really good representation, the inspection will occur in due course and you will not be “stressed”. You can certainly call on me to assist with your purchase of a home in the Denver area.
Russ Murray 303-721-1100, ext 1 russ@buyerbroker-denver.com
Roof! Roof! (Not Woof! Woof!)
What is this about and Who should read it?
Okay, if I have your attention, you will find useful information here whether you are evaluating the roof on an existing home or ready to replace the roof on your current house. And it is important. A good roof not only adds value to your home but also is the first protection of the structure itself.
(As with most of my posts, this information is relevant to the Denver, Colorado metro area.)
What types of roofs are out there?
The most common roof is a 3-tab composition roof. These are typically installed over rolled on asphalt impregnated felt paper. The shingle itself is asphalt based with fiberglass granules as a surface protection. Typical life expectancy is 20 years.
Next in the “composition” roof family is the “architectural grade” composition roof. The materials and installation are similar to the 3-tab but the shingles are laminated so that there are two layers. This product is sometimes known as a “bi-laminate”. The two layers provide a heavier shadow line and longer life. You can figure 25 to 30 years for this roof. In this same category is the “tri-laminate”; similar but with three layers and a potential 35-50 year life span.
Frequently in use for both new and replacement roofs is a lightweight concrete tile product. While the system is ”light weight” for tile, it is heavier than composition roof material and the structure itself must be evaluated by an engineer before installation. Many of these roofs come with a 50-year warranty. Your insurance will be much lower than with other options; in many cases low enough to recapture the incremental cost over architectural grade composition in just a few years. One “negative” to consider with this roof system is that it is quite east to break the tiles when walking on them so be really careful during any maintenance operation. You always want an experienced installer. In the case of tile that become even more important as some installers will attach the horizontal ”battens”, over which the tiles are installed, without either shims or vertical battens. While an “approved” method, it is likely to shorten the life of the roof as the horizontal battens, if not raised, will trap water and deteriorate faster.
You may have, or see on your prospective home, hand-split wood (usually cedar) shakes. For many years this system was considered an upgrade from a composition roof and certainly has the heavy shadow line that many people like. This is NOT a good roof in this area. It was not bad when a “heavy” shake meant 3/4″ to 5/4″ butt ends. These actually had reasonable hail resistance and I have seen some 30-year roofs that were still serviceable. As time progressed and builders tried to save money we saw medium and light shakes being used. One light hail event and they are toast and 20 years is about it for life-span. To the best of my knowledge shakes are not used in any new construction and the only replacements that I see are in neighborhoods where the residents have not been able to change covenants that allow only shakes. Check before you buy if you are thinking of replacing shakes with ANYTHING else.
Two roof types that you will find on existing homes but which are no longer being installed are “Woodruff” and “Permatec”. Woodruff is “pressed-board” product made from sawdust and glue. I was to be a shake replacement but better. Some of it has held up reasonably well and may provide a 20 to 25 year life but too much of it deteriorated. Inspect this roof carefully. There are far fewer Permatec roofs around. This too was the man-made answer to wood shakes, did not hold up and was the subject of a class-action suit resulting in large payments to home-owners.
I am beginning to see what are called “stone coated steel” simulated shake roofs being used as replacements. I have observed that in some of the older installations, the stone coating has begun to come off. I do not know if that is a condition that has been addressed with some of the newer products.
The above options cover probably 95% of the roofs that I see. There is the occasional metal roof and some other “simulated shake” roofs. I have not tried to address flat roofs in this post and will save those for another.
The Process and The Permit
First, hire a really reputable contractor. If one tells you that you do not need a permit move on. Get references, call them and look at the work. Make sure that the permit is not just issued, but also closed out with a final inspection. I recently had a transaction where the inspection resolution required the installation of a new roof “in accordance with local building code and properly permitted”. I went by the property just to check progress, saw some things that did not look quite right and called the building department only to learn the work had not been permitted. I reported the address and when I went by the next day the old roof coverings were being properly removed and the code-required, new solid decking was being installed. If you don’t have an agent on your side, you just need to be on top of the work.
These were just the high points!
Contact me with questions and/or leave your comments and your roof experiences below, particularly if you can add to everyone’s knowledge.
Russ Murray 303-721-1100, ext 1 russ@buyerbroker-denver.com
Stucco and/or EIFS – A Review
Why Is There More To Discuss?
I have just recently had an experience with a consumer asking my opinion regarding a home that is under-contract with the inspector having identified 16 major cracks in the synthetic stucco membrane. They elected to not be represented for this transaction so my only advice was to refer them to a qualified EIFS inspector. What I wanted to say was “Move on to another home. There is just too much risk”. That last comment is a bit of a departure from my advice over the past few years and is the result of the problem of synthetic stucco exteriors growing, not shrinking.
Let’s First Define The Products - Stucco - EIFS – Hard Coat
Traditional stucco is a cement based product that has been used for centuries. It is applied over wire mesh in two or three layers with a waterproof membrane installed first to protect the house framing. Cement stucco itself is not waterproof and “breathes” so that moisture that may penetrate has an opportunity to escape and the waterproof membrane prevents moisture from getting to the wood framing members.
The history of synthetic stucco is much shorter. It was first used in Europe post WWII and was primarily applied to their typically masonry buildings as a repair and update. While there is some cement in the product it also has epoxies which provide some flexibility but which also render it waterproof. That was not a problem with application over a masonry structure.
When it began to be used in the United States in the 50’s and 60’s, builders saw it as a less expensive alternative to traditional stucco. As energy conservation took root, the ability to apply it over a foam insulating panel became attractive. With the foam insulation underneath, the “system” became known as “exterior insulating and finish system” (EIFS). Synthetic stucco installed without the insulating sheets is sometimes referred to as “hard coat” but this can also be used to reference cement stucco. Be sure you know which. There is a difference.
The BIG Problem With Synthetic Stucco
In short, it does not allow moisture that gets behind it to escape. Unlike cement stucco, synthetics must adhere to the structure and therefor a waterproof membrane cannot be applied. I thought for some time that the application without the foam board was acceptable. The more I read and see, the more I am convinced that it is problematic either way.
The result of the trapped moisture is usually mold growth. If caught early it can be mitagated. If not, it can grow into “black mold” which can affect the health of occupants.
In the perfect world, the synthetic material would be installed in strict accordance with manufacturers recommendations and then MAINTAINED in accordance with those same recommendations by the home owner. There would be no problems. Listen, I have seen hundreds of these homes and have seen only a very few that were installed and maintained correctly. The installers take shortcuts or use poorly trained workers, the general contractor trusts the sub contractor and/or does not become familiar with the product and finally, the home owner sees stucco as a “maintenance free” product.
But I Already Own An EIFS House or I Love This House And Want To Buy It
If you are an owner walk around your house carefully and look for any cracks. Look very careful at all penetrations; windows, deck rails, lights, etc. If you see any cracks or openings it is time to bring in a qualified EIFS inspector. The inspector will be able to tell you if there is moisture behind the walls and make recommendations for repair and/or maintenance. If you are lucky and there is no moisture problem, put yourself on an annual inspection and maintenance program. If problems are identified, they should be corrected and then begin regular maintenance.
If you really, really want to purchase one of these EIFS homes, make sure that you find a QUALIFIED EIFS inspector. You will probably need permission from the seller for some moderately “destructive” testing. (1/8 inch holes that are then re-sealed.) I have never seen an EIFS house come through with less than several thousands of dollars of repairs with one estimate for $70,000 because of mold.
Want An Agent To Represent You Who Cares About This Stuff?
That be me! I have been around and involved in construction and try to stay up to date on what is happening. You will benefit from my business practice of always and only representing the interests of my buyer-clients.
Russ Murray 303-721-1100 russ@buyerbroker-denver.com
The Pundits Missed Something! and How’s That Tax Credit Working?
You read/heard it where?
December 2009 Real Estate Results
I do not agree with the way that the December real estate results are being interpreted by most of the media. The theme seems to be that the extension of the first-time buyer tax credit should have caused December results to meet or exceed the results of prior months. The problem with that conclusion is not having considered how long it really takes to get from contract to closing. (more about that in a subsequent post) That time has increased with new underwriting and appraisal requirements so what we formerly could always do in 30 days is now taking longer. By the time the extension was approved, there simply were not enough days left to get a transaction closed in December and because the new deadline was April 30th, there was little incentive to move quickly.
“Cash For Clunkers” and “First Time Home Buyer Tax Credit”
What these two programs have in common is that they seem to have adjusted only the timing of most purchases, not the actual decision. Edmunds.com evaluated the CARS program and, adjusting for the autos that would have been purchased regardless of the credit, found that the cost per car to the taxpayers was about $14,000. The anecdotal history in our office for home purchases is similar. Of about ten first time buyer transactions following the announcement, only one person seems to have purchased because of the credit. When you think about the process, it just makes sense. The $8,000 could not be used forthe purchase and most of these first-time buyers are short on cash so the buyers had to be consumers who had already accumulated their needed funds. In terms of timing, once these clients had decided to purchase, the tax credit certainly was the carrot to get them to close by November 30th.
Unintended Consequences
As we approached mid-October, probably the latest a contract could be written with a guarantee of a November closing, we did observe that sellers with homes that were ready realized the date predicament and became less negotiable. I had to tell several buyers that they may have just “financed” the $8,000. Still a pretty good deal at 5% or less!
Going forward looks better. With the credit now decreasing at $2,000 per month after April 30th rather than just expiring, we should see less desperation on the part of buyers and more market-driven negotiations.
Have Questions or Comments?
Please leave any comments or questions. I am interested in your experience as a buyer or a broker (on either side of the transaction)
If you are thinking of a purchase in the Denver area in 2010, please contact me. I am an experienced Exclusive Buyer’s Agent (EBA) and will always be your advocate.
Russ Murray russ@buyerbroker-denver.com 303-721-1100, ext 1
Considering Washington Park in Denver?
Why Live In Wash Park?
Remember your early real estate advice? Location, Location, Location? Wash Park is it! A short commute to downtown Denver or DTC via private or public transportation. Downtown includes both work and play opportunities with the primarily office DTC area adding entertainment options on an increasing basis. For many residents it is the park itself. A 32 square block urban oasis with two large “lakes” (ponds if you are from a part of the country with “real” lakes) hike/bike trails, tennis courts, picnic areas and just a lot of open space. One of the largest park in the city, and for many, the best. There are several one and two block commercial areas with retail, restaurants and coffee shops. This is a VERY “walkable” neighborhood!
Who Lives In Washington Park?
There is more accurate census data available, but I will give you my anecdotal information based on the profile of my clients who want to live there as well as who I observe as the sellers of the homes that I see. Couples and singles of all age groups who place a higher value on the park and the shorter commute than on the larger and newer home available at comparble prices in the “burbs”. There are families with children with the young ones typically pre-school. Some of the families remain in Wash Park as the kids start school and find a way to make it work. Many others elect to move to an area that offers more highly rated schools.
What Kind of Housing Will I Find In Washington Park?
It is becoming more eclectic. A few years ago the “typical” Wash Park home was either an early 1900’s bungalow of 800, 1000 or 1200 square feet or a 2-story “Victorian” of similar vintage. That has changed with much new construction as a result of “scrape-offs” of the old housing and “pop-tops” of the bungalows. This new housing has provided options for those who want to stay but are not willing to forego some of the more modern conveniences. There are some newer and older “side-by-sides” and townhomes as well as several mid-century high-rise condominium buildings.
What Range of Prices Will I Find?
Almost all of the Washington Park housing stock is well above the median price for the metro area. For 2009 the median list price for detached homes was $550,000 ($350 per square foot) and for attached/condos $315,000 ($279 per square foot). The highest/lowest listed prices were $2,100,000/$185,000 for detached homes and $1,300,000/$106,000 for attached/condos.
How Can I Get More Information About Homes In Washington Park?
I hope that you will call me. I am an Exclusive Buyer’s Agent (EBA) with experience in Wash Park and can give to you the level of service that you deserve to have.
Russ Murray 303-721-1100 russ@buyerbroker-denver.com
I’M MOVING TO THE DENVER METRO AREA
What's not to like?
Denver, Colorado is a desirable destination
I have watched even those who at first worried about cold weather and snow become some of Denver’s biggest cheerleaders. The 300 days of sunshine are NOT a myth and yes, we have some cold weather and yes, there is the occasional major snow storm but there is never a month without a “rag-top” day (top down on the convertible for you non-fans of Jimmy Buffet). Golf is a year around activity and skiing can be as close as an hour. (The major destination resorts are admittedly more distant from the Denver area.) One of the most common observations from my clients who have recently moved to the Denver area is that “everyone seems so friendly”. We think that may be a result of the sunshine. Humans really are in better moods when exposed to sun.
All of the research shows Colorado residents to be among the highest of all states in health and fitness. Again, you can “play outdoors” all year long. Remember, Denver is not the “mountains”. It is “The Queen City Of The Plains”.
Okay. But Where Should I Live In The Denver Area?
Wow! Lots of choices. As with any large metroplex there are many options. Your choice will always be affected to a large extent by your budget. After that, you may be looking at commute times and schools. You will be choosing from among many typical suburbs constructed from the 1950″s on to some of the interesting urban areas with homes built from the late 1800’s. My observation, after hundreds of buyer clients, is that many (most?), particularly families with school-age children, will trade some commute time to live in a newer and larger home.
City of Denver Neighborhoods
Over the past 15-20 years there has been a major shift to living close to the Denver core. Most of my buyers in these locations are singles or couples without children. The associated supply/demand ratio has resulted in increased prices in the close neighborhoods plus major new construction. There are certainly many options whether you are considering the southeast Denver Neighborhoods of Welshire, Washington Park, Platte Park, Lowry, Cherry Creek, Hilltop, Bonnie Brae and Belcaro; the Northeast Denver neighborhoods of Stapleton, Congress Park, Capitol Hill, Park Hill, Lower Downtown, Riverfront and City Park; or the various Highlands neighborhoods to the northwest, to name some of the more well known neighborhoods. I expect to address each of these in subsequent posts to provide both objective data as well as my more personal and anecdotal observations.
Suburban Living is Better for Some
Your choice of which direction to go for a suburban lifestyle may well be driven by your anticipated commute. If your work is in “downtown Denver” some of the north and west cities offer good commutes. Lakewood, Golden, Arvada and Wheat Ridge are some of the closer areas. A longer drive to Northglenn and Thornton will be rewarded with lower prices. And there are cities further away as well.
If your work is in the Denver Technological Center (DTC), the large office park to the south, you may well consider Centennial, Littleton, Highlands Ranch, Aurora, Parker and Castle Rock.
There are more cities and neighborhoods to explore and consider and the mention above relating to commutes does have some overlap along with the acknowledgement that there are factors other than commutes that are going to affect your decision.
You Can Get Help With Your Denver Area Move
I have been assisting people moving to the Metro Denver area for over 20 years. Because I always and only represent buyers, I do not focus on one area and have clients from Elbert County (pretty far east) to Evergreen (foothills west). If you are new to the area you want an agent who can help you to evaluate your options and find a location that will be a good fit. Call me for help.
Russ Murray, Exclusive Buyer’s Agent
303-721-1100, ext. 1
“I’LL BUILD IT TO CODE. WE DON’T NEED A PERMIT”
What You Need
What is a “building permit”?
Every municipality with which I am familiar requires some sort of permitting for additions and modifications to a home. Standards and requirements may vary but the requirement does not. A permit is usually issued by the building department, requires payment of a fee and comes with the requirement for progress inspections by a representative of the buidling department. If a contractor is saying that a permit is not required, I suggest that you call the building department, describe the scope of the work and learn for yourself. Permits are always required for modifications to plumbing, heating, electrical and the structure. One may or may not be required for removal and replacement of cabinets and/or a dishwasher or disposer.
Why do you need one?
Permits are required to protect your health and safety. The best general contractors, electricians and plumbers can miss something or simply be behind on recent building code revisions. Once those pipes and wires are buried in the wall you will learn about the errors the hard way! Just a few of the problems that I have encountered in my practice are missing attic insulation, improper construction of interior walls, ungrounded electrical outlets, overloaded electrical panels and un-connected plumbing drains. There are more but the preceeding should give you pause enough.
Does the building department inspection provide a “guaranty”?
Unfortunately, not! It is a good start. The municipal inspectors are usually competent but they are human and can be defensive. I found an instance of an unsafe difference in riser heights on a stairway and approached the chief inspector who said that the contractor must have gone back after it was inspected! That made a lot of sense! If you are doing a significant project, you should hire your own inspector who will become the third or fourth set of eyes evaluating the progress. A competent and responsible contractor will welcome the addition. Just be sure your inspector has the right perspective regarding his/her role. This sounds like a broken record but when the health and safety of your family is on the table, you want to have someone on your side.
Monitoring the process
Just obtaining the permit is only a start and I have seen many remodels where the contractor has the permit posted but never calls for an inspection. The homeowner did not know how to follow-up. The best thing that you can do is to know what inspections are required and then kind of casually ask your contractor when they are expected. The contractor will then know in a relatively non-threatening way that you know what to expect. Better yet, have the municipal and your personal inspections as a part of the contract and progress payment.
Be sure the permit is “finaled”
Again, learn from the building department how they “final” or “close out” a permit. Have your final payment to the contractor be subject to your receipt of the completed permit and/or satisfactory confirmation that the final inspection approved the completed project.
The “bottom line”
By requiring a permit you will have more confidence that your project will be completed with no health or safety issues and that when you are ready to sell your home you can demonstrate to a buyer that all work was properly permitted and inspected. I always check for permits and have had several clients walk away from and otherwise desirable house when learning that modifications were made without permits. A reputable contractor will not work without a permit. You may want to reconsider a contractor who wants to do your project without a permit.
If you find this information more than just interesting and want a broker who understands the whole process on your side for the purchase of a home, you can contact me.
Russ Murray
INCLUDING THE KITCHEN SINK!
The Best Choice?
Everything Ages
Looking at our own homes is sometimes like looking in a mirror. We just do not really “see” how things are wearing out. One of the items that does not always age well (but which we may not notice) is the builder-installed kitchen sink that we use many times each day. Look closely. Yours may be showing that age and wear. The correction may be easier than you think.
How Do You Know What You Have?
Most production builders install an “enameled steel” sink because it is the least expensive. You can tell that is what you have by “thumping” it with your fingers. If you hear a hollow, oil can sound, you have enameled steel. If you are continuing to read this and considering a replacement, you are probably noticing some chipping and marks. The steel flexes but the enamel does not and that is why it does not stand up as well.
Some production builders install “stainless steel” sinks. This tends to be a slightly better option. The two problems with many builder-installed stainless steel sinks is that they are often shallow and of a lightweight “gauge” of stainless. Owners usually do not notice this until trying to wash the turkey roasting pan and/or finding dents in the sink.
It is possible that you may have an enameled cast-iron sink either by the builder or a replacement by a prior owner. Because of the cast iron, the “structure” of these sinks holds up well but the enameled finish really takes a beating over time and eventually does not clean up well.
What Are The Options?
Over my twenty years of showing homes, I have seen thousands of kitchen sinks. The older sinks that look the best are always of heavier gauge stainless steel. Various factory made composite sinks have been available for several years and my outlook for these is good. There is just not as much history as there is for stainless. If you are replacing counter tops with a manufactured solid surface, I recommend against the integral sinks as I am seeing many of those look beat up and chipped after a short time.
What To Look For?
Be sure to see the sink that you are considering out of the box. Check the depth and be sure that it will meet your needs. (Hint – 6 inches is too shallow!) Price will vary according to the design and very important, the “gauge” of the metal. (Lower numbers are heavier guage.) Anything lighter than 18 gauge (i.e. a higher number/gauge) is likely to disappoint as it will dent easily. Consider a heavier gauge if your budget allows.
Should You Attempt The Installation?
If you have already had some experience with plumbing repairs around your home, removing the old sink and replacing it with a new one may be a fit for your skills. If not, call in the pro. You can figure 2-4 hours depending on the complexity of your installation.
Other Home or Replacement Questions?
I see a huge number of homes every year and have listened to comments from hundreds of home buyers. You can look to me for any of your home-owner questions and/or to have a broker with you who really knows how to evaluate the condition of a home.
Russ Murray russ@buyerbroker-denver.com
BUY A HOME NOW! PRICES ARE ON THE RISE! – NOT
Is Now The Time?
Is Now The Time?
Who has the best advice?
I always tell my clients that only if the person making the above prediction retired young and on the basis of such predictions should they pay attention. Unfortunately that person is probably on the beach somewhere enjoying a Margarita. The pundits still working are just guessing.
Which forecast is best?
Will prices go up? Certainly. But when? And, perhaps more importantly what are prices doing in your neighborhood. Just as “all politics are local”, the same is true for home values. The state or national trends may have some use, but not if you are buying in Washington Park or Highlands Ranch or Park Hill or…you get what I’m saying.
An experienced broker in your market should be able to provide data for you that will show how your selected neighborhoods have faired over the past several years in both the up and the down markets. You can then make an informed decision regarding where to purchase knowing that history.
The Denver “connection”
In our Denver Metro market their are several neighborhoods where prices have been flat with even some upward movement over the past year while other neighborhoods have decreased in value by 30%. There can be reasons to purchase in either. You just want to be an informed consumer.
Need help answering these questions?
You can contact me at russ@buyerbroker-denver.com or at other contact information on this page. I am an exclusive buyer’s agent with experience in all of the greater Denver markets.
IS YOUR FAMILY SAFE IN YOUR HOME?
Almost everyone becomes somewhat complacent regarding safety issues in their homes and it seems that the longer we are in the home, the more complacent we become.
Testing is Important
When was the last time you “pressed to test” your smoke alarms? Batteries changed annually? (A good time to help remember is at the change from Daylight to Standard time.) If you are in a home built before smoke alarms were a requirement, have they been installed?
Add a CO detector
Many states and/or municipalities are now mandating carbon dioxide (CO) detectors in new construction and at time of sale for existing homes. These are relatively inexpensive devices that are regularly saving lives.
CO is colorless and odorless and as many parts of the country get into the heating season with doors and windows closed, the chances for the presence of CO grows. Having your fossil fuel heating system serviced is a start. The CO detector is next.
As a note, your smoke detector is on the ceiling or a high wall because smoke goes up. CO is heavier than air, so install the CO detector closer to the floor.
Want a Colorado Broker who understands safety and your real estate needs?
You can call me at 800-621-9747, ext. 1 or email russ@buyerbroker-denver.com .