San Francisco, CA · Member since 2015 · 60 posts · 12 votes
Hello,
I am considering buying a duplex in Oakland California that seems to have good bones, but needs a substantial makeover - new exterior, roof, plumbing, electrical, foundation work, and interior. There is a lot of interested in the property and our agent tells us that we should do as much research as possible and give an offer without an inspection contingency if we want to have a chance at getting this property. There is already a termite report and bid to fix it ($100K+), title report, seller questionnaire and disclosure statement. We are planning to get a foundation inspection and estimate. In the end, the plan is to fix and flip or to do a condo conversion (which I know requires a bunch of other reports, etc.)
If we decide to put an offer without inspection contingency, are there other inspections/reports I need to get to make sure I don't buy a lemon? Like the environmental report, etc.
Investor · Philadelphia, PA · Member since 2016 · 2k+ posts · 1k+ votes
7y
@Lenny B. Buying any property without some kind of inspection is a risky proposition. You already know you’re getting into $100K termite repairs, I’d imagine there’s quite a bit more too.
You need to estimate what it would cost to fix all the things you don’t know, roof, foundation, sewer, etc. then base your offer on that.
The other option is to walkthrough with a contractor or inspector. A home inspector won’t give you an official report without an agreement of sale, but you might find someone who will talk through it with you.
You want to make sure you know what you’re getting into!
Lender · Nationwide Lender · Member since 2015 · 1k+ posts · 814 votes
7y
@Lenny B. Unless you are planning to buy in cash, you will need to an inspection so your contractor can provide the lender a detailed bid for the work that needs to be done.
Real Estate Agent · KENSINGTON, CA · Member since 2015 · 1 post · 0 votes
7y
You can hire a home inspector, but you may have time before the close of bids for only a verbal report if there are multiple interested bidders. A "Termite Report" in this area of California often refers to a complete home inspection done by the seller, not a "termite treatment." You need to get it, read it, and show it to a good carpenter, plumber and roofer.
Remember the old rule-Twice as expensive and 3 X as long as the "estimates." -Steve Pelly-veteran of 6 total gut rehabs-
Real Estate Broker · Oakland, CA · Member since 2015 · 67 posts · 51 votes
7y
Hi @Lenny B. I am extremely active in the Oakland market and would like to chime in here. The Bay Area and specifically the East Bay market has a culture where sellers are expected to disclose everything they can (both from their knowledge as well as hired 3rd party inspectors) up front and buyers are expected to bake all the known material facts about the condition, desirability and the like into their offer price. Also, all the information that is disclosed is typically considered to be off the table as a negotiation point later. The only thing you will be able to negotiate is "new and substantive" findings/disclosures. This is all predicated upon the reputation and reliability of the inspector so make sure you consult with your agent about that.
As far as putting together a competitive offer, the first question I would ask you is do you have a sense of how many bidders there are? Based on the way you describe the house, it is likely to attract all-cash buyers. Your agent should be able to tell you exactly how many people will be bidding, who is representing those buyers (and what that persons track record or writing offers is) and what price the property will likely close to given its condition.
It is typical that sellers of fixers like this will not do a home inspection as they assume that someone will come in and gut it. Also, if the termite report is from anyone other than Omega, you need to dig into their reputation and track record. If your agent is active in this market, they should be able to tell you that quickly. Also, is there anything in the TDS or SPQ (or the termite report) that makes you think the foundation is in bad shape?
Here is my unsolicited advice: Call David Teare (https://www.bpginspections.com/inspector/406) or Brendt Mullan (https://www.bpginspections.com/inspector/949) at Buyers Protection Group and ask them to come and do a walkthrough with you before you submit the offer. These guys are simply the best inspectors in the East Bay and every good agent knows them. They will charge $200 for the walkthrough. They will walk through, under, and around the house with you and point out everything they see. If they give the seal of approval, you should feel confident in not needing to inspect any further. If they say get something else inspected, do it.
I hope this helps. Please feel free to reach out should you need anything else.