Now What?

Buying a Home?

The seller is touting updates, renovations, and repairs that do not show up on the BuildFax Property History Report. What should I do?

Each BuildFax Property History Report provides the data that the local building department has on file electronically about a particular street address. Any work performed without permits and inspections will not be documented in departmental records and, thus, it will not show up on a BuildFax report. Also, work performed outside the date range listed on the Report Summary tab will not be included on the report. It should be noted that many types of home improvement do not require permits as all, and therefore the first step is to determine the exact nature of the job. It is also recommended to work directly with the seller to better understand the work performed and what steps were taken to adhere to the building code, if applicable. Information revealed about a property, including information leading one to conclude that proper permits were not obtained prior to a job, is valuable. Use such information to help make an informed offer on the property, and ultimately come to an agreement for a sale.

It has been concluded that a property for sale has an incomplete permit history; i.e. work was done without proper permits. How should I proceed?

Use this information to negotiate a price and contract that satisfies both you and the seller. Options include buying the home .as-is., seller rectifies the problem, buying a home warranty, or any number of other options. However, be prepared that if the work is of poor quality, workmanship, or has violations to the building code, costly repairs may arise in the future, in addition to municipal fines and/or violations.

The home I'm considering has no permit activity at all on the BuildFax report.

When a property search results in this situation, it means that the local building department does not have any documented permit history associated with that street address within the time span for which it has electronic data. In these cases, we suggest that you print out and keep a copy of this report. This will illustrate that you performed the background check on the property and found no records documenting any renovation or other construction in the past X number of years (this time span will be included in your search results).

What if BuildFax uncovers something that makes me want to withdraw from the contract?

This can be handled in the context of the traditional home inspection process. If the non-compliance issue is discovered during the inspection period of the sales contract, the buyer would be able to require the seller to rectify the situation. If the seller refuses, this would give the buyer a basis to terminate the form purchase contract. If the non-compliance issue is discovered during after the inspection period, and assuming the seller was honest on the RPDS, then the buyer may not have a basis for terminating the form purchase contract or requiring the seller to fix the problem. With that said, the buyer's lender may require the property's construction history as a condition of the loan. When the non-compliance issue is discovered, the bank may not issue a mortgage. This would generally allow the buyer to negate the contract because of the financing contingency in the form purchase contract.

Selling a Home?

Am I required to disclose to buyers what I learn about my listing as a result of BuildFax?

On the RDPS, the seller may always choose the option for "No Representation" when it comes to knowledge of issues of non-compliance, or they may choose to disclose such information directly and offer some negotiating enticement, such as a home warranty.

When researching a home that is about to be placed on the market, BuildFax does not have records of work that was recently performed.

Each BuildFax Property History Report provides the data that the local building department has on file electronically about a particular street address. Any work performed without permits and inspections will not be documented in departmental records and, thus, it will not show up on a BuildFax report. Also, work performed outside the date range listed on the Report Summary tab will not be included on the report. It should be noted that many types of home improvement do not require permits as all, and therefore the first step is to determine the exact nature of the job. Information revealed about a property, including information leading one to conclude that proper permits were not obtained prior to a job, is valuable. Sellers may use this information to help market and qualify their property to potential buyers, as well as preemptively take action to correct any problems. It should also be noted that many homeowners unknowingly perform work without obtaining the proper permits. This does not necessarily constitute poor workmanship or quality, but it should be disclosed to mitigate liability on the part of the seller. Many times such work can be inspected after the fact by the local building department and obtain an "as-is" permit.

It has been determined that major work was performed without the necessary permits - what can be done?

First, the seller may choose to do nothing. In this case, both the seller and agent are typically required to disclose the situation up front to prospective buyers and the property will likely be sold .as is.. This requires the least amount of effort on the seller.s part. The buyer would then be responsible for correcting the issue or they may also choose to disclose the situation to prospective buyers up front should they decide to sell the property in the future. Second, the seller may choose to rectify the situation. Each building department has their own policies for dealing with work that is only reported after completion, so the seller will need to contact the appropriate building department to learn what needs to be done in order to ensure and document that the structure is in compliance. Obtaining the appropriate permits and inspections and paying a nominal penalty to the building department can resolve most situations. Finally, the decision can be made in consultation with a prospective buyer to determine what needs to be done to ensure a favorable contract for both parties.

Real Estate Pro?

How can I use BuildFax to better serve my clients' needs?

Reduce instances of stalled closings by uncovering facts ahead of time. This not only reduces headaches for you, but also could save your client money by reducing costs associated with attorney's fees, mortgage rates, etc.
Avoid misrepresenting a listing. BuildFax helps you uncover facts about a home that help you better state the condition of the home, in addition to accurately stating factual qualities of the home; i.e. square footage, number of bedrooms, age of home, etc.

What if, by using the BuildFax Property History Reports, I uncover something I would rather not know?

Any and all information that you provide to you uncover about a property that you are considering buying is valuable. BuildFax Property History Reports should be presented to both buyers and sellers before any purchase offers are made or accepted and, for buyers, certainly before any contract-related inspection timeframes expire. In addition to helping buyers make more informed offers, using BuildFax may also help reduce the risk of any possible disclosure-related liability after the sale.

We're in a "seller's market." It is conceivable that BuildFax may put my buyer at a disadvantage?

The short answer is no. No matter what the market, BuildFax is designed to empower both the buyer and seller with marketable information about a property. Think about it, when you are about to spend $250,000 on a home, shouldn.t you know what the building department knows about the home?

How can I use BuildFax to help my business?

Reduce disclosure liability by stating the public-record facts as they are available via BuildFax. This may reduce negligence and reckless omission of material facts.
Provide a valuable reference document and generate new business. BuildFax reports are a great leave-behind that clients will remember and reference to their own contacts. We can configure a BuildFax account for you that has your contact information directly on the report.