Any of you with experience buying/selling houses?

[former lurker]

There's the rub. I really don't know. They said they had a bid, and I upped the bid by 125,000, but I don't know if they were telling the truth about the other bid. I was certainly the only one who went under contract. When I got a counter-offer, they said it was a multi-person offer, or whatever the term was, but my agent said that it wasn't necessarily so. I have been looking for a property for several months in the area, and I really like this one, I have to say, as have a lot of my friends and co-workers. An extremely handsome co-worker asked if he could come and bring his wife and kids, and I thought of saying "Only if you promise to use the pool while I'm there."...

 

If you end up with the property, you will likely have more of a presence from the men/people who fix you're retaining wall problem than with guests/friends, at least for a period of time. Didn't Marcus Iron do landscaping projects in the San Fran area? Perhaps you could get him!

 

As far as the costs of repairing the retaining wall, the point of an inspection is to provide you with the opportunity to walk away and/or renegotiate if there are hidden costs/repairs. If you have the money and it's worth it to you to pay the costs of the repairs on top of the purchase price, your simply waive the right to walk away and complete the purchase. If you can't or choose not to do so, you can try to negotiate either having the repairs precede the purchase or a reduction in purchase price to offset those costs. My guess is that the seller's will say the need for the repairs is already factored into the sale price.

[wbtravis]

I just had the house I'm in escrow with (to buy) go through various inspections. Lots of things not to code, but a major one was a retaining wall behind the pool. Apparently it's not just not to code, but there's some earth that's in danger of collapsing, and it really has to be fixed. Apparently the fix could easily cost $150,000. Is this something the buyers will usually agree to fix or cover the cost? Or will I have to completely re-negotiate? It doesn't look as if this fix was optional. There were some other potentially expensivish stuff, like difference in heights of many of the outdoor stairs (not to code), but that doesn't seem to be as essential to fix.

It all boils down to the terms in your contract. Ignore any advice that does not direct you to what you and the seller negotiated.

[Anton]

I guess you thought about the real estate taxes? I.e. the ones you pay every year once you own the place? If you do all the repairs yourself, you may be paying real estate taxes over a lower purchase price. If the seller does all the repairs and if you buy for a higher price, you may be paying real estate taxes over a higher purchase price.

[David1024]

In California you don’t need a real estate attorney. The seller’s and buyer’s agents do all of the contract work. But it doesn’t hurt to get an attorney to look over the contracts.

 

The other big thing in CA Residential real estate is disclosures. Any defect KNOWN to the seller must be listed in the disclosure schedule. If the seller genuinely did not know about a big defect like this, they do now and will have to list it on the disclosures. That means they are selling a defective property and the selling price should be adjusted to allow for that. If you back out of the deal, they will need to disclose to another prospective buyer and will need to adjust the price. Of course there’s a possibility that they knew all about it and just hoped it wouldn’t get discovered. Either way, the seller should pay the cost of the defect, or at least meet you half way.

 

You could roll the dice and back out of the deal because of this and there’s a good chance they will come back with a counter, but you would have to be prepared to lose the house if they have another buyer lined up.

 

Good luck with it!

[jeezifonly]

If this is a hillside like others in the HH, do not fuck around. Not all of that area is on bedrock.

Repairs that are up to seismic code run higher than first estimates, I’ve found. Some friends had to pay nearly double because of difficult access issues for equipment, had to hire a crane, etc. Do your homework and remember it’s a business transaction - falling in love with a house can be an expensive one-sided affair.

[former lurker]

I guess you thought about the real estate taxes? I.e. the ones you pay every year once you own the place? If you do all the repairs yourself, you may be paying real estate taxes over a lower purchase price. If the seller does all the repairs and if you buy for a higher price, you may be paying real estate taxes over a higher purchase price.

 

Is that how it works in CA? In my experience, the "assessed" value on which property taxes are based isn't the same as the fair value for which the property sells (or at least it diverges soon after a sale has occurred).

[Guest]

I guess you thought about the real estate taxes? I.e. the ones you pay every year once you own the place? If you do all the repairs yourself, you may be paying real estate taxes over a lower purchase price. If the seller does all the repairs and if you buy for a higher price, you may be paying real estate taxes over a higher purchase price.

Repairing that retaining wall will take a long time. I think that the repairs should come off as a credit, thank God. The one thing that was part of the original contract, and which I hope he'll do before I move in, was remove all of the cabinets and other crap from the 2-car garage, which he's only using as storage, though he does have a separate 2-car carport area (not enclosed), plus there's district permit parking on the street. Property taxes will be my major expense in life from 2021 on (I'm putting 80% down).

[Guest]

If this is a hillside like others in the HH, do not fuck around. Not all of that area is on bedrock.

Repairs that are up to seismic code run higher than first estimates, I’ve found. Some friends had to pay nearly double because of difficult access issues for equipment, had to hire a crane, etc. Do your homework and remember it’s a business transaction - falling in love with a house can be an expensive one-sided affair.

Thanks. I'm having 8 different inspections/inspectors. It was the geological surveyor who found the problem with the retaining wall. The house foundation is solid, on basalt. There are some drainage issues due to sandstone above the property, which can be fixed without excessive expense.

[former lurker]

Repairing that retaining wall will take a long time. I think that the repairs should come off as a credit, thank God. The one thing that was part of the original contract, and which I hope he'll do before I move in, was remove all of the cabinets and other crap from the 2-car garage, which he's only using as storage, though he does have a separate 2-car carport area (not enclosed), plus there's district permit parking on the street. Property taxes will be my major expense in life from 2021 on (I'm putting 80% down).

 

If you sell the property at some point, the money you spend on the retaining wall will be a capital improvement and reduce any capital gain from the increase in value of the property so as to reduce the cap gains tax. Also, if you finance the work via a home equity loan or mortgage, the interest payments on the mortgage will be deductible from your income tax.

 

Sounds like a great property. Congratulations!

[thedanNYC]

Repairing that retaining wall will take a long time. I think that the repairs should come off as a credit, thank God. The one thing that was part of the original contract, and which I hope he'll do before I move in, was remove all of the cabinets and other crap from the 2-car garage, which he's only using as storage, though he does have a separate 2-car carport area (not enclosed), plus there's district permit parking on the street. Property taxes will be my major expense in life from 2021 on (I'm putting 80% down).

 

That sounds great. What I need to know is, are you single? If so, I think your name's going to look mighty lonely on that deed. It needs company.

[+ Snbrd]

Heed David1024's hint! Hire an attorney. Not someone off a billboard. Find out, probably from a realtor, the name of an attorney or 2 who represent buyers and sellers in the area of your home. They know the issues, the language, the contractors, and the players. If you get a mortgage the closing attorney works for the lender not you. Protect your investment and your mental health!

[ElisPisis]

It's too high price, I don't think anyone would agree to pay that much... I`d refrain from buying this house if I were you. It`s now you see that there`re problems with retaining wall. Who's going to guarantee you there aren't other hidden problems? Just understand, this`s always the case in the secondary market – there`re important problems that they won't tell you about before the deal is done. I can tell you about my own experience - I bought an apartment in the primary market and don`t regret. I took a mortgage from Mortgage Broker Essex and it was easy for me to pay it off. I also advise you to think about it and take your time in buying this very house.

Edited October 6, 2021 by ElisPisis

[Guest]

19 hours ago, ElisPisis said:

It's too high price, I don't think anyone would agree to pay that much... I`d refrain from buying this house if I were you. It`s now you see that there`re problems with retaining wall. Who's going to guarantee you there aren't other hidden problems? Just understand, this`s always the case in the secondary market – there`re important problems that they won't tell you about before the deal is done. I can tell you about my own experience - I bought an apartment in the primary market and don`t regret. I took a mortgage from Mortgage Broker Essex and it was easy for me to pay it off. I also advise you to think about it and take your time in buying this very house.

 

I bought the house in November. After a number of soil/geological surveys, topo surveys, etc., it turns out that the bedrock is up to 12 feet deep, so the wall will end up costing some $225,000. I got $200,000 off the price for the house. I had the property very thoroughly inspected. I absolutely love the house. I drive down Nichols Canyon to get to West Hollywood, and I pass by many homes that have these hills above them which I fear will not fare well after a major rain storm let alone an earthquake. My property has already appraised for hundreds of thousands more than what I paid for it since I bought it. I enjoy it immensely and hope to spend my last days here. 

[Guest]

Typical Nichols Canyon homes, with hills which will probably come down on the houses one day or another:

http://www.fedidaproperties.com/images/gallery/thumbs/2145NicholsCanyon-print-65_640x715.jpg