Q: I’m looking to buy a home, and wondering how much I need to do to find out things about the home? Shouldn’t the agents and the Seller be able to provide all of the information I need?
A: This is such an important question, and something that is often misunderstood by buyers and sellers alike. As a buyer, no matter how many other people are involved in the transaction, you must conduct your own due diligence. Let’s talk about what that might mean, and what duties the others in the transaction do have to you.
The Seller of a typical residential property has the duty to disclose all material defects of the property- anything that may impact the value or desirability of the property. Sellers are required by law to complete disclosure statements that provide detailed information about the property to prospective buyers. These forms provide answers to many important questions, including whether there is damage to the property, whether there have been leaks or moisture intrusion, whether someone has died in the residence, repairs that have been made, neighborhood problems such as noise or pollution, etc. A seller has an absolute duty to disclose any defect that they are aware of. You need to read them!
The Sellers’ agent has an “affirmative duty to conduct a reasonably competent and diligent inspection of the residential property listed for sale and to disclose to prospective purchasers all facts materially affecting the value or desirability of the property that such an investigation would reveal.” Easton v. Strassburger (1984) This is now in the California Civil Code, setting forth a clear, statutory duty for the sellers’ agent to conduct a “reasonably competent and diligent visual inspection of the property” they are undertaking to sell. However, they generally do not need to go beyond what they can see.
As a buyer, your own agent has a different duty to you, a fiduciary duty that requires them to act in your best interest. Since that is a broad duty, it may extend to assisting you in your due diligence. Your agent must truthfully disclose all information about the property that they are aware of, and helping you to analyze the property for your stated needs. This may include, for example, inspection of public records to assist in your verification of square footage, permits obtained, proper/improper additions, or the appropriate usage of the property or parts thereof. Ask your agent questions – especially if it’s something you can’t obtain the answer to on your own.
That brings us back to your own responsibilities as a buyer. California Code §2079.5 warns buyers that the duties of the agents and seller do not relieve the buyer of their own obligations “to exercise reasonable care to protect [themselves], including those facts which are known to or within the diligent attention and observation of the…prospective buyer.”
So, when you toured the property, did you notice any damage? Did you see a half filled pool that looks like it is from the set of a horror movie? You may want to hire a professional to inspect it. Don’t assume everything is fine and sue later- I assure you, it is an expensive and unsatisfying process! Your agent will almost always advise you to conduct inspections. That is part of your own due diligence – you pay those inspectors and they provide you with very important information to help you evaluate the property condition. In addition to a general inspection, depending on the property and relevant circumstances, you may seek chimney, HVAC, pool, sewer line, geological, termite, and mold inspections, to name the most common ones. Some buyers may have all and some may simply have a general inspection. If something is important to you, have it inspected.
Some issues require even further investigation. Are you buying the property to rent out- short or long term; planning to add a unit, a story, or square footage; or convert the space to something different? These are inquiries that you can’t always get a firm commitment on from government agencies, but you would be smart to investigate during your due diligence period, to evaluate the likelihood of your plans being approved.
Some of the most common buyer concerns are almost entirely subjective, and that’s why only you can determine whether a property is right for you. Do you work from home and need absolute silence? Do you need just the right natural light for your home art studio? Are there enough windows to give you the ventilation you prefer? Is the home in a neighborhood with more traffic than you like? Does the condo limit the number of dogs to 2 and you dream of having 4? These are all things that only you can decide.
Buying a home is an important decision. Look at enough properties so that you realize which things are important to you, and when you think you have found your dream home, and your offer is accepted, put on your own sleuthing hat, and start investigating! Read all of the disclosures, look at and around the property and neighborhood closely, and ask every question you can think of that would help you to make your best decision.
Disclaimer: This article is intended to be primarily for entertainment purposes, and is not to be considered legal advice.
ABOUT LISA PHILLIPS, ESQ./ CA Dept. of Real Estate, License #01189413
Lisa Phillips is an active Realtor® in the Los Angeles area, with more than twenty years as a Real Estate Broker and Attorney. Lisa is also a member of the National Association of Realtors “Green Resource Council”, and achieved its “GREEN” Designation. Her unparalleled knowledge of real estate, from local markets and pricing to legal issues and deal-making, has made her a trusted and valuable asset to her clients. In addition to her real estate and business savvy, Lisa is passionate about helping others, and works tirelessly for her clients, as well as several charitable causes. For more information, please visit www.LisaPhillipsRealEstate.com.
