patrick.net

You go, girl!

elliemae says

You go, girl!

http://www.go-girl.com

You definitely should have the current owner get the CO. Don't take this on yourself. The permit is not in your name and may be inactive. Hard to read the list but it seemed mostly rather minor stuff, but that should in no way give you comfort that the house is well built. Any house built under financial distress is suspect. You cannot rely on the building inspectors as they vary a lot also. Some breeze through, others are quite detailed. However if your house inspector knows his stuff he can tell you if the construction is shoddy but they cant see through walls.

cashmonger says

Here is more information about the property and an update of today’s goings-on on this sitch’.
The property does indeed have cement footings under the pillars, but for two of the ones in the front, they rest on only half of the footings (oops). Instead of extending each footing out to accommodate the entire stucco pillar, they just stuffed dirt under the missing sections of footing (I may post pictures of this…).

Very informative. Thanks for the info.

Lucky,

I admire you for presuming diligence, skepticism and perfectionism as default positions of the consumer psyche, but the evidence reflects quite the opposite. Very few people see either god or the devil in the details. The buyers I interact with want fancy, and they want big, but most of all, they want to convey to you and everyone that they have arrived. And they want it all now, dammit! I have actually had friends say insipid things like, "I feel like such an adult now." Can you hear my flesh creeping?

The finer points on your checklist are mostly extraneous to this bunch.

Great checklist, though. You know your stuff and that's refreshing.

Austinhousingbubble says

The finer points on your checklist are mostly extraneous to this bunch.

Yea, yer right. We're all reeally, reeally stoopid and are gratfull that yer heer 2 point that owet.

Ellie,
He was referring to those idiot house buyers who "want it all, now".
At least I think that's what he meant.

Hope so. But it didn't read like it. Perhaps he meant "that bunch" rather than us.

I just ran across this tidbit, entitled "It's scary how dangerous people can be with data" from Active Rain, the RE blog:

http://activerain.com/blogsview/1309120/it-s-scary-how-dangerous-people-are-with-data-

It's Scary How Dangerous People Are With Data!
"Keeping with a Halloween theme - I decided that people are dangerous with data! Doesn't matter what kind - if they have enough of it - it's scary how dangerous they can be! Pick a topic - any topic - there's tons of stuff out there on it! Today, I pick real estate!

And here's the thing - just because someone has a bunch of data - doesn't mean they know what to do with it. And that's the real scary part.

Coming across a well-armed Seller, he said he doesn't need a real estate professional because he knows:

•How to access Tucson's MLSfor comps, DOMs and stats on the market.
•What his neighbors house sold for!
•What homes are selling for in his area - in fact, "For the whole city!"
•The average number of foreclosures and bank owned homes
•Where to get and how to write a purchase contract
•What title companies are suppose to do
•What the interest rate is and what Buyers want
I say, GREAT! So tell me:

•What were the cumulative days on market for your neighbor's house? And was that with the first or the third real estate company? Did the seller make any concessions?
•What percentage of the comps expired, had seller carry backs or lease options?
•What is the median price per square foot?
•What's the current inventory level for your area, heck, for the whole city! And how does that impact the sale of your home?
•What about the new construction home subdivision down the road - how does that impact the market?
•What is the list to sales price ratio?
•What version of contracts do you have and what are the deadlines for each?
•Which costs do Buyers and Sellers customarily pay for at close?
And the list could go on!

People are dangerous with data because most of the time, they really don't know what to do with it - when they have it."

Austinhousingbubble says

For 700K, couldn’t you just build something and make goddamn sure the thing was done right?

This is a 6,000 sq. ft. custom. My inspector who has built customs for 30+ years said it would take $800K to build this house in today's market. That is not counting the land. Even with the sh*tty footings on these pillars, once they are fixed, he believes the house is structurally sound and a steal for the price. We will see what happens. I'm not going on emotions, instead taking a scientific, logical approach during my due diligence. No way I'm going in on a $700K house without fully satisfying myself (no pun intended) and carefully heeding the advice of several seasoned professionals.

EastCoastBubbleBoy says

What I want to know is how the sellers closed their loan originally if a CO was never issued.

Assuming I am correct in assuming the original owners build the house themselves and used subcontractors to build that house. They could have used a construction loan. With a construction loan, they bank releases the money to you as you build the house, as each phase of the house is completed, the bank releases another block of money so you can continue construction. Generally this is done in 3 parts but could be as high as 4. The bank comes out to check on the house to make sure you completed the house enough to get cash for the next phase. I would assume they would check for passing permits, but with all the craziness during the bubble years, it could very be something they overlooked. Construction loans are more risky for banks, so they have a higher interest rate. Once the house is completed, you can then change the mortgage into a traditional mortgage.
This house is a good demonstration on the risks of buying a foreclosed property. Bet the buyers thought they were getting a steal, only to find they purchased a headache. You have to remember when bidding on properties you don't get it inspect the properties first, let alone have the time to do proper research on the property. I for one am very impressed with your detective work.

Bottom line? We wish you the best, cashmonger. When (if) you get the home, please pour a drink for Patnet readers.

Or... you could post your address and the time of the party and we'll all be there (tee hee)

Hope so. But it didn’t read like it. Perhaps he meant “that bunch” rather than us.

At almost 300 posts, I guess I'd kinda be self-referencing in that instance, wouldn't I?

Don't be silly.

Or at least don't be *so* silly.

To put it another way: if it stung a little, I was indeed referring to you. If not, then you're likely not part of this (that) bunch. Fair enough?

TechGromit says

EastCoastBubbleBoy says
What I want to know is how the sellers closed their loan originally if a CO was never issued.
Assuming I am correct in assuming the original owners build the house themselves and used subcontractors to build that house

The seller is the lender that received the house when the guy who began building the house in late 2005 defaulted on the loan they gave him. See my long-winded dissertation posted on October 29 for additional details.

You are right on Gromit - there is usually not enough time for such investigations. We asked for an extension for the inspections and it was granted. Thanks for being impressed on the detective work. I'm actually enjoying it. I'm an electrical engineer by degree and am known to be very thorough and persistent.

No word today from the sellers as to whether or not they have the CO. What we did get today from one of the listing agents (the dumber one) is the following:

1. The roof certificate.
2. A scan of the final inspection list of outstanding items with most of the items scratched off and a note from him stating (grammar isn’t one of his strong suits): "Here is list of items completed by contractor...let me know if you have knowledge on anything that is cross out that is still outstanding except for grading around pedestals. That will be done soon as I get [INSERT NAME OF SELLER/LENDER] approval." Them scratching things off of the list is akin to them scratching their a$$ - the only thing that matters is if the county scratches them off the list during their re-inspection.

Makes sense... thanks for the explanation.
I applaud your persistence. Best of luck, no matter how it turns out.

everything you folks said is pretty right ... except ... the whole OccuPermit thing. That would only matter if the lender demands you buy a home ready to live in. Other than that, you can buy half-a-house, with ducks living in the kitchen, and use it for a lifesize dia-rama ... Permit Schermit if you have cash. The deed is the deed.

My instincts want to agree with you Bap and I'll get clarification on this from my Father in Law who is our Realtor/Broker. I thought he told me that that Old Republic Title will not grant title unless the sellers have a Certificate of Occupancy on the dwelling. Maybe I misunderstood and this is driven entirely by the lender.

I know we take a lot of shots at Realtors in here and the following will be no surprise, but I've got a sh*tty Realtor story that I need to get off my chest. The property in this post has two listing agents - one with 20+ years of experience and the other with 40 years of experience. Now, between the two of them, you would think that they have half a brain, but they don't. My F-I-L told me today that he sent them email correspondence with 3 simple questions regarding the property and one replied with, "My sister had a medical condition and I need to go out of town to help her." The other replied with, "I do not understand your questions." These are simple questions too!!

Question 1: Have you given the Sellers the results of our inspection and the pictures we took during our inspection?

Question 2: Now that you know that the property needs a re-inspection from the county and a certificate of occupancy from the county, how far along are you guys in that process?

Question 3: Was my request from last week to extend our closing date to 20 days past the receipt of the certificate of occupancy granted?

He then called the agent who said that she didn't understand the questions. Her got her voice mail and told her to please re-read the email and that the questions were self-explanatory.

He finally received a reply via email. The reply didn't address the questions, but instead said, "The Sellers want to close escrow prior to making the repairs revealed in Sections 1 and 2 of the pest inspection." Most of the items in the pest inspection were items that actually showed up on the county inspection as well, but still - I don’t trust these people - not one bit. I'm going to insist that they do the repairs prior to the closing date.

Any thoughts?

send those three questions to the lending agent

Bap33 says

send those three questions to the lending agent

???

These questions were sent to the listing agent(s) from the buyer's agent (my FIL).

just do it and show the lender's comments about the three questions to the selling agent, via your FIL's email.

I'm lost Bap. What are you talking about? My FIL is our Realtor and our Broker. As far as agents, the seller has two Realtors that are co-listing the place and we (the buyer) have one buyer's agent - my FIL.

And just to be clear, he above questions were sent from my FIL to the two listing/sellers agents and their responses were included above...

I said to send that same list of questions to your lender and see how they react to the seller's agent actions. Or, dont.

it could be the water and sewer connections are not paid. They are stout.

wish i was lucky says

Or take one of the Building Inspectors out to lunch and ask them all these questions - “off the record”.

Now, that's funny.

There are many homes here that were built on blue clay and they are either settling or splitting in two in some cases. I had a friend who was buying one and backed out on the deal - and the builder sued him even tho the first time he looked at the place the gap in the hallway tiles was about 1/4 inch and a week later it was about an inch, filled in with grout that didn't even match. The builder's solution was to wrap the house with a band of some sort at the roofline.

Unfortunately (for the builder), my friend backed out and counter-sued. And won. But this builder continued to build in this development. I hope he's in bankruptcy.

There are signs all over the walls, property, sky, highway, restroom walls, and taxi cabs telling you to run. Run.

To place the blame on the real estate listing agents is absurd. Inspite of what you might think, or expect, Realtors are not "experts" regarding construction, etc. The fact that the lack of footers under the pillars needed to be found by your inspector proves the fact; it wasn't readily observable and was a latent defect. The reason for hiring an independent inspector is to find such things. Unless your contract calls for the seller to reimburse you for the inspection fees in the event of failure of the inspection, you are the one that will end up paying for those inspections. READ your contract. Furthermore, if this property is in foreclosure, it typically (i.e. always) is being sold in its current "as is" condition. Any repairs necessary to satisfy the county, city, et all in order to obtain the Occupancy Permit will be your responsibility. I get a little bit perturbed to read on this site the constand ignorant bashing of real estate agents, as if they have the market cornered on sleeze. What I've noticed in here is constant generalized statements that are based on ignorance as to how the industry actually works. Your acting in due dilligence is exactly what YOU need to do as a buyer. Caveat Emptor, i.e. buyer beware should always apply whether you're buying a home or a car. To assign responsibilities to others that are simply not responsible is nothing other than a cop out.

After hearing these horror stories I am glad that I am building a home. It is a 3 bedroom 2 bath, 2100 ft^2 Ranch style home. It is also a full ICF home using that Eco Block brand (6” below grade and 4” above grade). When you take out the area that the walls take up, it ends up being about 1900 ft^2 of living area on the main floor. It also has a full basement with an egress window so I can always finish that if I need extra room. It also uses steel beams for the main support. There will be plenty of room for just about anything that I want.

I have never seen the blue clay mentioned above, but I have seen black clay in the Dallas area. That stuff is horrible on foundations. The lot that I bought has bedrock at 7’ below grade. I had some test holes dug before I bought it and this made me very happy. That bedrock is a type of limestone called Dolomite. It is a tough stone that does not get attacked well by acids. The foundation has footers with lots of vertical #5 rebar in it. In order to allow for a bathroom, we built a few feet above the bedrock on clay and sunk the vertical rebar down to the bedrock. The clay in the area is a dense glacial clay that was very dry at the time when the footers were installed so the clay will not shrink. The clay will also not have the ability to heave it up because the ICF wall goes up about 20’. All that mass above it will just be too much.

I have watched it go up from day one and I am glad that I did not buy the standard $hit box in the area. It is a headache to build, but I think it is an even bigger headache trying to find a well built home.

RayAmerica says

I get a little bit perturbed to read on this site the constand ignorant bashing of real estate agents, as if they have the market cornered on sleeze.

Oh Ray, they may not have the market cornered but they're working on it. By golly they're working on it. Suzanne is researching it!

@Ray, by your explanation, Realtors do not deserve to split 6% of the sales price. In my case the listing agents can't even get answers for simple questions, nor do they understand them. Nothing in our contract says "as-is" and the fact that this was once a default or foreclosure was never mentioned until we were a week into escrow. Contractually, they are bound to make the repairs - that is, assuming we don't back out. The listing agents purposely withheld information and do indeed deserve some heat here.

@Ray, a bigger example of ignorance is referring to someone or a group of people as such when they simply see things differently than you do. For example, is everyone who votes differently than you ignorant as well?

The only way to know if a house is constructed properly is to build it (literally) yourself and even then there can be problems i. e. almost no one tests concrete in residential construction and how about that Chinese drywall. So there is an element of risk in buying/building a house new or old. I think in this case ones due diligence should exceed the norm because it was built under distressed circumstances, over a long period of time which in my experience greatly enhances the possibility of problems. This is one reason why many people contracting the construction of a house throw out bids that are way below "the pack" You really, really don't want a contractor to be loosing money on a project or be in any financial distress.

RayAmerica says

I get a little bit perturbed to read on this site the constand ignorant bashing of real estate agents, as if they have the market cornered on sleeze.

Jeez, after reading your post I realize that we're wrong.

RRayAmerica says

Inspite of what you might think, or expect, Realtors are not “experts” regarding construction, etc.

Realtors aren't "experts" on anything. They're salesmen. They used to have a corner on the market when it came to venues to get info out as to homes for sale - the MLS. But with the advent of the interweb, realtors are relics of the past. They should be. To pay a percentage of your home sales price to someone who hangs a sign outside, fills out some paperwork and waits for people to come to them is just plain stupid.

If you want legal advice, hire a lawyer. If you want to get screwed, hire a prostitute. There, we've bypassed realtors.

elliemae says

If you want to get screwed, hire a prostitute.

This phrase too should be found on the PatNet shirt.

elliemae ..... typical liberal mindset; because you "feel" Realtors are nothing but "salesmen" .... well ... that makes it so. Of course, you have a right to make unsubstantiated generalized statements that apply across an entire industry. I've personally known a number of Realtors that are highly professional and honest people. Last I checked, real estate agencies aren't disappearing as "relics of the past" as you claim. Last I checked too, real estate agencies continue to do an incredibly high percentage of all real estate transactions. By the way, when a "seller" doesn't pay the commission to a real estate brokerage, who is it that benefits from that savings? Is it passed onto the buyer, or, is it kept by the seller?? If it's kept by the seller, how does that benefit the buyer?? I'd be curious to hear your answer.

RayAmerica says
By the way, when a “seller” doesn’t pay the commission to a real estate brokerage, who is it that benefits from that savings? Is it passed onto the buyer, or, is it kept by the seller?? If it’s kept by the seller, how does that benefit the buyer?? I’d be curious to hear your answer.

Of course there is no way to know for certain whether the sales price on a house would be lower without a sales commission and therefore whether the seller or the buyer would benefit but it is safe to say neither save money or make money from the act of paying the commission. While you can make a case, (and realtors do this) that the seller more then makes up the cost by the sales ability of the realtor I would say this is possible but not likely. My experience is that in a weak or average market realtors want the seller to list and accept a low price so that they can lessen their work load and move onto the next sale (commission). I can see no case that the buyer benefits. My own personal experience involves commercial leasing and sales and many times but not all the time the commission cost is added into the sales price or lease price, this is done at times with the full knowledge of the agent for the buyer or lessee. So that the seller or lessor suffers no cost and the buyer or lessee unaware of what is going on pays the commission indirectly.

rdm .... some valid points, however, I've had lots of experience in real estate (dare I admit it on this site?) including holding an agent and broker's license. I've purchased a number of properties in my lifetime beginning at the ripe age of 20. I've dealt with numerous For Sale by Owners over the years and they are almost always considerably above market value on their asking price. I've also found a number of these FSBOs purposely hide defects that my discerning eye found very quickly. Sometimes sellers have ulterior motives as to why they don't hire an agency. At least when working with a buyer's agent, the buyer is able to look at numerous propterties for price comparison in order to establish in their own mind what market value is on a subject property. Also, the buyer's agent can provide valuable information on recent sale comparables. Are there bad real estate agents? You bet. As long as human beings are involved in anything, there will always be bad apples.

RayAmerica says

Sometimes sellers have ulterior motives as to why they don’t hire an agency.

Yea, $$$thousands$$$ of them...

elliemae .... if it's the sellers that save $$$thousands$$$ ... what's the advantage for the buyer? The buyer will have to hire a real estate attorney and coordinate the inspections, loan application, removal of contingencies, follow up on escrow, etc. .... all so the SELLER saves $$$$ ????