San Diego Real Estate Blog Gary Kent Team

“I’ve just had an offer accepted on a home. If my inspector finds things like a leaky roof or the heater doesn’t work, does the seller have to fix the items?”

***ANSWER:
Nope.

The seller is only LEGALLY required to have:

1. Operative smoke detectors in the “sleeping areas”.
2. Earthquake straps on the water heater
3. Low flow toilets…unless you agree to change within 30 days of closing.

However, if you find defects that the seller will not fix or credit you $$ for, the standard contract gives you the right to cancel and receive your deposit back…provided you’ve objected within the time limits specified in the contract.

Footnote: “But what about termites!?”

A termite (aka “pest control”) clearance is not a LEGAL requirement. But most homebuyers ask for one in their offer and the seller agrees. Thus the seller would have to comply, as they would with any contract terms.

Buying A Home In San Diego

“I’ve heard the terms ‘soft prepay’ and ‘hard prepay’. What do they mean?”

***ANSWER:
As you may know, “prepay” refers to a prepayment penalty that is charged when a home loan is paid off early. Most home loans don’t have prepayment penalties, but some do. For those that do, the penalties are usually for the first 1-5 years. And they’re typically 80% of 6 month’s interest.

SOFT: Refi-Yes, Sell-No
A “Soft” prepayment penalty is one that is charged if you refinance, but NOT if you sell:

HARD: Refi-Yes, Sell-Yes
A “Hard” prepayment penalty is due in both cases

By the way, read your “Note” or “Trust Deed Note” (not the same as the “Trust Deed”) thoroughly to be sure you do not have a prepayment penalty, often referred to as a “prepayment privilege”.

Buying or Selling San Diego Investment Property

“I bought a condo with a cracked slab 5 years ago. We filled it at that time and have not had a problem with anything that we can see since then. I had put in wood floors and new carpet back then and have not looked under either since. Do we have disclose this to the new owners that the problem existed years ago or do I have to pull up the wood and check to see if all is OK today. If we say nothing - how long do we have until they can legally still come back at me if repairs are needed? Thanks.”

***ANSWER:
The law says you have to disclose what you know, but you do not have a duty to investigate.

As to how long a potential buyer can come back at you (i.e. the statute of limitations), there are several variables that determine that. As that is a complex legal question, it’s better asked of an attorney.

And, as always, please verify all legal questions with an attorney.

“We rent right now and can barely afford a house, so my wife and I were thinking condo. But I don’t want to pay those monthly association fees. They’re a waste of money. Are there any condos without fees?”

***ANSWER:
Sorry. With rare exception, buying a condo means you’ll be paying those pesky “HOA fees.” But here’s the good news…

They’re NOT a waste of your $150 to $350 per month ($700 or more for some luxury condos).

Most typically provide water, trash, insurance for the structure, and common area maintenance, including roof. Many also include pool, spa, rec room, tennis, cable, and security.

You’d have to pay for several of these items anyway if you bought a single family home. The others are nice perks you’ll enjoy for a fraction of the cost if you had them in your own home.

So keep an open mind.

Affordable San Diego Condos

“I recently had a realtor tell me that running my credit multiple times for the purposes of obtaining a home loan/mortgage would not take points off my credit score. Is this true? Is this different than having my credit run several times for, say, an auto loan?”

***ANSWER:
That Realtor was correct. To get you the most accurate answer, I emailed my trusted lender and here’s what he sent me:

Looking for a mortgage or an auto loan may cause multiple lenders to request your credit report, even though you’re only looking for one loan. To compensate for this, the score ignores all mortgage and auto inquiries made in the 30 days prior to scoring. So if you find a loan within 30 days, the inquiries won’t affect your score while you’re rate shopping.

In addition, the score looks on your credit report for auto or mortgage inquiries older than 30 days. If it finds some, it counts all those inquiries that fall in a typical shopping period as just one inquiry when determining your score. For FICO® scores calculated from older versions of the scoring formula, this shopping period is any 14 day span.

For FICO® scores calculated from the newest versions of the scoring formula, this shopping period is any 45 day span. Each lender chooses which version of the FICO® scoring formula it wants the credit reporting agency to use to calculate your FICO® score.

Hope that helps…

Buying or Selling A San Diego Investment Property