Dear Michael: I am in escrow on a home. My agent is now telling me that termite repairs are no longer covered by the seller. Why was the WPA (wood and pest addendum allocation of costs) removed from the C.A.R. Forms library? When I purchased my home five years ago the seller paid for all the termite repairs!
Answer: Those sellers who agreed via the WPA (wood and pest addendum allocation of costs) which was attached to the RPA (residential purchase agreement) to pay for repairs recommended in an inspection report that they had not yet seen, and for which the inspection was not yet conducted, were often surprised at the scope and cost of recommended repairs. This led to increased tension and animosity between the parties and their respective agents. The WPA approach was inconsistent with the balance of the RPA which provided that a property was sold in it’s as is condition and that a buyer would first get inspections and then ask the seller to pay for repairs or correct defects. Sellers did not agree in advance to pay for repairs, whether the discovery had to do with a roof, pool, foundation, plumbing or any other problem. However, many sellers yielded to the WPA because they were led to believe that, with or without the WPA, paying for recommended pest control repairs was either legally or contractually mandated as a condition of selling their home. The fact is that the allocation of cost repairs for pest is, and always has been a negotiable item. It’s just that now, it is no longer taken for granted that a seller is responsible for the cost of repairs.
Dear Michael: We are renting a home, which we pay over $3,500 per month. We want to apply this amount towards a mortgage instead of rent but unfortunately prices are now so high that we no longer qualify for the mortgage. How do you suggest we can take advantage of buying a house? I’m sure that you come across this all the time….
Answer: Many buyers whom a few years ago were looking to purchase a house and did not are now priced out of this market. Unfortunately if you are looking to buy a home and cannot afford the current prices, you will have to make some type of compromise. A) You may have to consider a move out of the area where homes are more affordable. This may mean a longer commute to work, a change of school for the kids or even being further away from friends and family. Only you can make this difficult decision. B) You can start looking at condos as an alternate to a house. You will have to live in an HOA community with a monthly fee but this could allow you to stay in the same area. Eventually when you have built enough equity, you can sell your condo and move to a house. Condo’s generally cost less than homes. C) You can sit tight and hope for the market to decrease or even stabilize. History has shown us that after a market decrease when prices finally rebound they increase to higher levels than the post years. In other words, prices should continue to increase until the next market collapse, which no-one can predict when this will happen.
Dear Michael: I have not paid my property taxes in more than three years. If I decide to sell my home how will my property taxes be paid?
Answer: If you have not paid your taxes in over three years, chances are, the City Assessor’s has a placed a tax lien on your home. You will first need to find out how much you owe in back taxes including penalties and late fees. Escrow can give you an estimated closing statement so you can have a better idea of how much you stand to net after the sale. If you have equity on your home, then escrow will pay off your taxes owed through your sales proceeds. If you have no equity on your home, you may want to consider a “short sale”. If a short sale is your option contact your Realtor and let him/her walk you through the process. A short sale is a very good option to settle your debt.
Michael Kayem is a Realtor with Re/max estate properties serving Culver City and the Westside since 2001. You can contact Michael with your questions at 310-390-3337 or e-mail them to him at: homes@agentmichael.com.
