What Not to Buy

After 25 years in real estate, it still amazes me that in every transaction, I learn something new. Recently, I got a call from a San Francisco agent who asked if I could help a young couple buy a home in Montclair. The agent said that the young couple had already identified the house they wanted to buy, and they were in a big hurry because the price had just been reduced and they were afraid somebody else would beat them to it. I happened to be very busy that day, juggling several offers I’d received on another property, but after speaking with the young couple and reviewing the available information for the Montclair home, I felt I could do a good job in negotiating a quick offer.  I agreed that time was of the essence because the house looked pretty darned good for only  $399,000 — I viewed (what I thought was) the full photo tour online, including this photo of the front of the house:

Within a few hours, I had drafted the purchase contract, obtained signatures online, and presented the offer to the listing agent by phone and email — all without actually seeing the house. In a surprisingly short period of time, the listing agent got back to me and said the Seller was very happy with our offer, but they just wanted to make sure our lender would approve the “unique foundation style.” Now, in my experience many Montclair homes have unusual foundations, necessitated by the steeply sloping hillsides onto which they are often built. I assured the listing agent that a post-and-pier foundation was well within underwriting guidelines for our chosen lender. But the listing agent was not convinced, so I asked him to send me more detail about this particular foundation. In reply, he sent this photo of the back of the house:

After opening this image in my email, I just sat at my desk for several minutes, transfixed, murmuring wow to myself every so often. Then I called the listing agent to find out whether the concrete footings are reinforced, and whether the diagonal braces are attached to steel beams. But these questions were to satisfy my own curiosity, because I knew my next call would be to the young couple, to explain to them that this is a perfect example of what not to buy.

So often, first-time home buyers get caught up in the lure of the “deal” — a house that seems too inexpensive to turn down. They think they have found a gem that everyone else has somehow missed, and that after holding on to it for a few years, they will be able to cash in. It’s my job to point out the flaws in the gem. Some flaws, such as a crumbling brick chimney, can be remedied. But some — like this “unique” foundation — will scare the heck out of any future buyers, no matter if it is made of solid steel.

I met the young couple at the house, and together, we scrambled far enough down the hill to get a good look at the underbelly of the structure. With eyes round as saucers, they immediately agreed that this was not a safe investment, and I called the listing agent to withdraw their offer. As I drove home, I felt not a moment’s regret at the canceled sale — the young couple had learned how to look at houses from all angles, and I had learned never to write an offer on a house I haven’t seen!