Author Topic: First Time Buyer - Are these common Escrow issues?  (Read 351 times)

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Offline kenmasters

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First Time Buyer - Are these common Escrow issues?
« on: October 14, 2020, 04:40:43 PM »
I recently entered escrow after putting numerous offers in on many Irvine houses in the last 3 months and have encountered more issues than I thought I would from inspections and disclosures.  Wanted to get thoughts from the forum if these were pretty common or should I strongly consider backing out.

Unpermitted backyard updates - Looks like the concrete, gas meter, and gas pipes (corroded) are not up to code

HOA Issues - The backyard and updates to the front yard were not compliant with HOA and there is a history of fines.  House was also painted with non-compliant colors.  Still not compliant today

Title Report - A significant amount of backed taxes on the title and a strange easement with someone who owned the house 20 years ago.  (Would assume these get cleared up before closing, but the backed taxes caught me by surprised)




Offline Mety

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Re: First Time Buyer - Are these common Escrow issues?
« Reply #1 on: October 14, 2020, 05:06:13 PM »
I recently entered escrow after putting numerous offers in on many Irvine houses in the last 3 months and have encountered more issues than I thought I would from inspections and disclosures.  Wanted to get thoughts from the forum if these were pretty common or should I strongly consider backing out.

Unpermitted backyard updates - Looks like the concrete, gas meter, and gas pipes (corroded) are not up to code

HOA Issues - The backyard and updates to the front yard were not compliant with HOA and there is a history of fines.  House was also painted with non-compliant colors.  Still not compliant today

Title Report - A significant amount of backed taxes on the title and a strange easement with someone who owned the house 20 years ago.  (Would assume these get cleared up before closing, but the backed taxes caught me by surprised)

I don't know the full story, but just based on what you said here and if you're still able to get the full deposit, I would highly suggest not to buy such home. Unless you're into fixing things yourself and like doing those house maintenances, it would be very painful to deal with all those. I recommend newer homes since they will most likely have less issues, but older homes do have better locations and plans. If you really like the home, try to have the seller clear all those lists or at least have them give you credits/cash to cover the cost. There are many other homes in Irvine you can buy IMHO. I don't think those are common issues. I've bought couple homes in Irvine and haven't heard such inspection results.

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Offline Soylent Green Is People

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Re: First Time Buyer - Are these common Escrow issues?
« Reply #2 on: October 14, 2020, 05:18:00 PM »
You have time to review and approve some of these disclosures during your contingency period.

The property tax / HOA fines are not your concern. They must be cleared by the seller and the title company before you close. I'd call the HOA and see how long of a grace period you might have to repaint the home and to get the landscaping up to shape. Not enough information about the easement. We have a significant one with ATT in our front yard, but if it's a neighbor access easement, that's another story. This also is a title company question. Be sure to get every response from a manager and confirm the conversations in writing.

When we bought our home the first owner (we were 3rd) had installed a gas pipe going into the yard to support a built in BBQ. It was great for the first 15 years, but eventually corroded away. It was a significant gas leak for a day and dangerous if we didn't notice it. Ask where the gas lines go. If you have a backyard set up similar to ours, may want to think not just about the cost of front yard landscaping but a rear yard makeover as well. If you weren't budgeting for this kind of work, and if the seller will not give you a $30-50k price reduction the home may need to be a pass.

My .02c

My .02c

SGIP

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Offline kenmasters

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Re: First Time Buyer - Are these common Escrow issues?
« Reply #3 on: October 14, 2020, 05:34:02 PM »
You have time to review and approve some of these disclosures during your contingency period.

The property tax / HOA fines are not your concern. They must be cleared by the seller and the title company before you close. I'd call the HOA and see how long of a grace period you might have to repaint the home and to get the landscaping up to shape. Not enough information about the easement. We have a significant one with ATT in our front yard, but if it's a neighbor access easement, that's another story. This also is a title company question. Be sure to get every response from a manager and confirm the conversations in writing.

When we bought our home the first owner (we were 3rd) had installed a gas pipe going into the yard to support a built in BBQ. It was great for the first 15 years, but eventually corroded away. It was a significant gas leak for a day and dangerous if we didn't notice it. Ask where the gas lines go. If you have a backyard set up similar to ours, may want to think not just about the cost of front yard landscaping but a rear yard makeover as well. If you weren't budgeting for this kind of work, and if the seller will not give you a $30-50k price reduction the home may need to be a pass.

My .02c

Thanks for the insights!

Yeah there are actual multiple easements by So Cal Gas / SCE / Cox which I’m assuming isn’t a big deal as they are utility companies.

That backyard scenario is exactly what we have but with an outdoor fireplace plus the BBQ.  We don’t have any budgeted for redoing the landscape in the back and front, so we were gonna request a credit but wasn’t sure for how much. Is the best route to get estimates/quotes to back up the request for credits/purchase price reduction?

Offline Soylent Green Is People

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Re: First Time Buyer - Are these common Escrow issues?
« Reply #4 on: October 14, 2020, 06:01:31 PM »
Get estimates, but don't share those prices with the seller. Get a good number and stick with it.

Remember if it's a $30,000 cost to cure, and you ask for a $30,000 price reduction, you aren't getting $30,000. You're getting a reduction in your down payment only and that's the cash you use to cure the deficiencies. No lender on the planet will close a purchase with a seller credit for repairs / escrow hold when you don't have plans, contractors, and HOA approval.

Post closing there are renovation loans available. I've never done one, but the company has completed many of them. PM me and I can get you a contact for a Renovation Loan.
My .02c

SGIP

Offline USCTrojanCPA

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Re: First Time Buyer - Are these common Escrow issues?
« Reply #5 on: October 14, 2020, 06:34:57 PM »
The real question that you need to ask yourself is this...are you willing to deal with correcting all of these issues after you close or does the property fall into the "life is too short" category?  If you are willing to get the home where it needs to be then, as SGIP mentioned above, you need to start getting quotes from 3rd parties and then go back to the seller and ask for credits to correct all the items. Even though the current outstanding HOA fines will be paid off through escrow, you'll be liable and on the hook for additional fines on a post-closing basis until they are resolved to the satisfaction of the HOA. Good luck and keep us posted.
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