All Forum Posts by: Brad S.

Here are some of those provisions in the CA Civil Code 1695 - But, as always, DON'T TAKE LEGAL ADVICE FROM A FORUM POST ON THE WEB, including from me!

 The law is about home equity purchasers. Part of it's intent is 

"to safeguard the public against deceit and financial hardship; to insure, foster, and encourage fair dealing in the sale and purchase of homes in foreclosure; to prohibit representations that tend to mislead; to prohibit or restrict unfair contract terms; to afford homeowners a reasonable and meaningful opportunity to rescind sales to equity purchasers; and to preserve and protect home equities for the homeowners of this state."

2 of it's provisions are:

1) a seller should be given the right to rescind the sale within 5 business days after the signed contract, in writing. the law specifically states, "Until the equity purchaser has complied with this section, the equity seller may cancel the contract." That sounds like if the Buyer did not follow this procedure, the contract can be null and void!

2) "Until the time within which the equity seller may cancel the transaction has fully elapsed," the "equity purchaser" shall not "Pay the equity seller any consideration."
...and fines could be as little as $2,500 or, $25,000, or "not less than three times the equity seller’s actual damages," in some cases.

And none of this can be waived, by the seller.
And I don't remember if this was advice from a past class or seminar I took, or part of a law: that the seller should be informed of the potential value of the house and the intention of the buyer, to rehab the property and sell at a profit.

Yep, I get the irony in what you are pointing out. LOL  But, I think you also understand, that ignorance is not a defense for the "predatory" action of a buyer in this case, whether intentioned or not. So, the law is to protect the victim, not the perpetrator. Although, again, in CA, that's not always the case.  :P

This is probably the best advice on this thread!  :P

@Jay Hinrichs Thank you for adding some additional "sense" onto this thread.

@Todd Pultz Unfortunately, ignorance is not a defense. And, he obviously has an idea of the value, after all he did put that in his post and why would anyone buy a deal like this without having a general idea of the value. Anyway, your sentiment is a nice idea, in a Utopian society, of which we don't have.  :P  And, don't forget, we are talking California, where I have had a Judge grant me an eviction for a tenant, but still allow him to stay another 2 months, on my dime! ...I still don't understand how that works!

These laws are there precisely for the Homeowner and not the Seller and for exactly this situation. I don't see anything ethically wrong with what James did, just the way he went about it, since he doesn't understand the process.

@Mel Hayes

I’m assuming by “quats,” you meant Quartz?

As to your question, of whether it will affect an appraisal, the simple answer is “maybe.” It depends on the appraiser and how they classify the general quality of the house and if the market seems to value those properties with higher quality countertops, more than those with laminate (Formica). In other words, do buyers pay more for properties with quartz than laminate?

Generally, an appraiser assesses the quality of the house and compares it to other similar sales. So, if the countertops cause them to consider the house to be average, or lower quality then other recent similar sales (comps), then YES, it may affect the appraised value.

For me, it might make me wonder what other items, visible and not visible, were skimped on, and it may somewhat influence me in classifying the quality of a house. But, in some areas, Quartz or granite, may not be expected.

I wouldn’t worry about the wear and tear of Quartz though. They are a manufactured product made to last and should be able to be repolished or sanded if needed, but ask an expert.

But, in our lower priced rentals, I would put in low priced granite, which still had the wow factor, even though I knew where to get it for about the same price as laminate. I used to be able to get a 9 foot prefabricated piece of granite for $65 and installation was $200. I would do an entire house for under $1k installed, and it really impressed everyone, when they saw it.

@Sheldon D. Cummings

How much are they charging and what do you get for joining?

@Brad Sand

Ok, I can’t figure out how to edit my post. The last line was supposed to say it is NOT something to take lightly!

@Brad Sand

Some of the provisions I remember are, that you need to give the distressed sellers a certain amount of time between handing them the contract and them agreeing and signing it (a few days or more, I think), and you should disclose to them, that you plan on reselling it for a profit. Having them signed disclosure stating something similar to that...and there may be some other things, but it is it something to take lightly!

@James Thomas

It sounds like you purchased the property when she was “ in foreclosure “ (with a notice of default already have been filed). If that’s the case, in CA, there are a set of foreclosure laws that kick in, which protect the seller in default, from predatory buyers. It’s been a long time since I was involved in this end of the business, but you definitely want to consult with a CA attorney who is very familiar with foreclosure laws. You want to make sure you are covered and doing everything by the book, or a judge could force you to pay her any profits you made on the sale and give her the house back. Really, I’ve read cases about that years ago. Cover your butt!

@Frederick Karnoski

I think I like option 3 also.

You need a place to live and if rents are skyrocketing in areas you want to live, then you will be getting high rent for your house while also paying high rent on a house you don’t own. Sounds like lowering your standard of living and ending up in the same place.

So, unless you would downsize or move out of the area, etc, what would the benefit of leaving your house be?

I like the pulling cash out of the equity, or getting a heloc, to prepare to buy an investment property.

Also, keep in mind, that you have your property tax base “locked” in at your original purchase price, due to prop 13. If you sold, you lose that benefit, and that is a big bonus for a CA rental. At the current value of $575k, that’s roughly $6,900 property taxes (1.2% estimate). I don’t remember what your original purchase price was, but that is probably around $150/ mth more in prop taxes you’d be paying, if you wanted to replace that property in today’s market.