Buying your first home?
Buying a new one or another one?
You have a lot of responsibility as a buyer this to be a success. There are many decisions to make, and although there will be a number of people involved who can assist with providing information and answering questions (your Realtor, insurance agent, mortgage officer, attorney, escrow and title companies), YOU are ultimately responsible for reviewing the available information on a property and making an informed decision.
Here in California our standard contract (known as the Residential Purchase Agreement or RPA) outlines many things you must consider and options you have as part of your due diligence. Don’t take this role lightly– it can lead to regret, a problematic transaction, possibly a lost home, and perhaps financial burden.
Here are just some of the due diligence issues you will need to consider. You will also receive disclosures from the seller that you will also need to read and approve, as well as a Buyer Inspection Advisory.
Inspections of the home (general condition, wood destroying pests, roof, electrical, HVAC, plumbing, chimney, water (well), lead, soil, structural, square footage and room sizes, boundaries and plot plan [easements, encroachments, lot size], septic/sewer, pool, spa, tennis court, asbestos, radon, irrigation system, conservation, mold, etc.)
Home Owner Association (HOA) or condo documents (By Laws, regulations), budgets, condo/HOA fees, pending or past lawsuits, annual meeting minutes
Natural and Environmental Hazards and related disclosures (here in California, for example – earthquake fault and seismic hazard zones, flood hazard, fire hazard, military ordnance proximity, protected wildlife [critical habitat], landslide, liquefaction susceptibility, Mello Roos (a type of property tax in some California communities), airport facility proximity, special tax assessments, industrial use, etc.)
Crime statistics, including the sexual offender (Megan’s Law) and registered felons databases
Law enforcement facilities, fire protection, emergency medical
Property taxes, supplemental taxes, special assessments
Insurability of the home (e.g., C.L.U.E. report)
Schools (boundaries, programs, busing, location, etc.)
Public transportation (buses, trains)
Proposed title and deed – an attorney or the title company will do a title search
Permits for any remodeling or additions
Utilities (gas, electric), telephone, cable/Internet, water, sewer, trash removal, recycling
Traffic; noise levels; nearness to major roads, airports, freeways and railroad tracks
Status of vacant property near the home (proposed or planned new construction, for example)
Usage of nearby commercial buildings and industrial sites – types of industries, noise, traffic
Final verification of property condition
You can choose to not investigate some things, while others will be required (e.g., reviewing and acknowledging statutory disclosures). Bottom line – investigate those issues which concern you so you can make a decision you are comfortable with. After the fact it’s too late.