Information for Real Estate Projects
Buying or selling a house or property requires a lot of research and understanding of the condition of the property to make the investment decision whether to buy it or how to price it. Your real estate professionals, agents and brokers all have valuable information and provide great guidance. Structural engineers that help the real estate industry come across great information about properties that can also help you and your real estate team make the final decision. A-1 Engineering has been helping realtors, buyers, sellers and property managers across Austin and San Antonio since 2011. We believe that information and understanding is powerful, so we compiled a short list of helpful sites and discussions to empower you with additional knowledge for your real estate transaction. The information provided does not substitute good judgement that actual professionals can provide you for your specific project; so consult with your attorney, real estate broker, home inspector, lender, appraiser, investment consultant and structural engineer, as needed.
1) Lender Required Assessments
a. Lenders might ask for a structural assessment following the suggestions from an inspection report or appraisal report. We can help with those structural assessments.
b. The most common type of structural assessment that is needed for these type of inquiries is an ASCE Level A report. The ASCE Level A report is a first impression assessment that an engineer completes of the house and of the foundation. Follow this link Level A Assessment to learn more about this type of assessment.
2) Permits –
a. Selling – If you are selling your home, double check with your local municipality to see if you have any open permits on file. It’s a good practice to have your property cleared of any open permits.
i. Do’s –
1. Make sure any improvements to the house are completed with permits. Not sure if you need permits, call or check with your city on what type of work requires permits.
2. Hire licensed electricians, plumbers, contractors, structural engineers, roofers and carpenters to help you with major repairs.
3. Compile all structural engineering, warranty and insurance reports for your property into a file to share with other professionals that might be assessing your property.
4. Fill out your seller disclosure with guidance from your real estate professional and attorney, as needed.
5. Structural engineers that assess houses are particularly interested on the following:
a. Historical fires
b. Historical warranty or insurance claims
c. Plumbing issues or repairs
d. Drainage problems where water is known to have been entering the building
e. Locations of known wood rot
f. Structural modifications to the house
g. Additions or expansions of the building
h. Foundation repair: scope, location and contractor that completed the work
i. Known repairs to roof for roof leaks
ii. Don’t –
1. Do not pull permits for contractors to save money. Licensed contractors should be able to pull their own permits for work that they have to do.
2. Do not assume that a permit is not required. “Trust but verify” is what we always say. In case the contractor says that a permit is not required, call the city and ask them. Most cities are very eager to help you with your project.
3. Contrary to some belief, pulling permits costs, on average, about $400 or less for most work. Pulling permits does not make your construction price go up. Better yet, the construction cost should stay the same since the contractors are expected to complete the work to the code minimum. The code minimum is the bare minimum that needs to be met so anyone that does work below the code, does work below the legal limits.
4. We suggest that you hold final payment for work completed once you have proof that the permit is closed. Again, you can always call the city and double check. Most cities have an on-line search feature to check the status of permits.
5. Don’t assume the structural engineer or other engineers pull or manage permits or that engineers are somehow above the requirement of having permits pulled. Just because an engineer is involved on a project does not mean that permits don’t have to be pulled. Engineers are not required or obligated to check for permits since permits are the owners and contractor’s responsibility.
b. Buying – Now that you have found the house of your dreams, double check that permits have been closed. Checking the status of permits, the types of permits and quantity of permits provides great insight on what improvements have been done, who did them, when they were done and if final inspections were completed.
i. Open Permits – open permits can mean a lot of things so don’t assume that an open permits means or suggests something is bad or not done right. Sometimes permits remain open because some fees have not been paid but all inspections have been completed and passed.
ii. Here are some additional “Do’s” and “Don’ts”
1. “Do” –
a. Do open and check the status of all permits. Regardless of type of work
b. Do check that all inspections have a final pass. Especially for electrical, plumbing, framing, and other structural or utility modifications to the house. Some inspections make have failed for the work (which is normal) so check that a final pass is on record.
c. Make note of who permitted the work. Knowing the person or company that permitted the work will help you manage any warranties or guarantees that come with the work.
d. Check with the Seller on whether any work completed comes with warranties or guarantees.
e. Its not a bad idea to ask the seller for additional explanations on why certain repair were completed. It might provide some additional information on a certain event that occurred (fire, flooding, plumbing issues, etc.).
2. “Don’t” –
a. Don’t try to close the permit on a house you don’t own yet. Check with your attorney or real estate agent.
b. Don’t assume that an open permit is bad or means that work was done incorrectly. Check the status and inquire why the permit is open and ask the city what is required to close the permit. Sometimes fees are still pending which can easily be paid and close the permit.
c. Once you buy the house, don’t assume the responsibility of the permit. Ask the contact person on the permit to take care of it.
3) Dangerous Buildings (Distressed Properties)
Few buyers and sellers know that the City of San Antonio and the City of Austin record and file property code violations. And that the violations go with the property and not with the owner or tenants. For example, say the city code enforcement files a citation for storing cars and debris on the property. The owner cleans up the property BUT the citation may still be open and has not been addressed. Or say the property has a history of citations and fines are assessed to the property but never paid. The main issue here is that property violations can come with fines to the property that have not been paid and new buyers can be stuck with them.
Here are some “Do’s” and “Don’ts” for code enforcement violations:
1) Do –
a. Do check that no fines are unpaid or violations are still open. Remember, fines go with the property so they become yours once you buy the house.
b. Hire a structural engineer to help you with structural violations to the house.
c. Sellers, it might be a good idea to disclose any historical violations to the house and provide documentation of resolution.
d. Read and become familiar with the City of San Antonio Property Maintenance Code http://docsonline.sanantonio.gov/FileUploads/dsd/2015SAPMC(PROTECTED).pdf
e. Check that any repairs to the property to clear violations are permitted and coordinated with the city to clear the citation.
f. Check the City of San Antonio Code Enforcement website for a list of violations
g. Check the City of Austin Code Enforcement website for a list of violations
2) Don’t –
a. Do not assume that new or recently constructed houses or properties have no violations. New homes can have code enforcement violations for building new structures without a permit.
b. Do not assume that pretty houses or well kept houses do not have violations. For example, say the house was in a fire and the owners took way too long to start repairs. The city code enforcement division could have filed citations to the property along with fines to motivate the owner to start repairs. Just double check.
c. Don’t assume that a property with historical violations is a bad property. Violations that are closed and resolved are good for the property and the community.
d. Don’t ignore any notices or letters from the city from the code enforcement division once you buy the house. Additional details maybe provided or additional action may be required to resolve the violation.
3) Houses with Foundation Repair
Its very common to find houses across San Antonio and Austin that have had foundation repair. So, here is some information that will shed some light on the condition of the building:
i. Compile all historical documents, warranties, guarantees for the repairs
ii. Write a short narrative as to why the repairs were made. Some owners do the repairs for preventative reasons, for preferences, to help level floors before renovations, or because an insurance company or warranty company covered the cost of repairs based on their structural engineers evaluations. None the less, reasons for why the repairs were made is helpful to buyer to take over the maintenance of the property.
iii. Double check that the foundation repair company opened and closed permits for their work.
iv. Get a third party structural assessment for the house. An ASCE Level A assessment is the most common structural assessment that can help communicate the current condition of the house to your prospective buyers.
v. Double check that you have the engineer’s certification report.
vi. Double check that you have final elevation readings or most recent readings from the foundation repair company.
i. Invite the foundation repair company that did the work to visit the site and provide a written assessment on the condition of the repairs that they did. More importantly, you should know if there are any existing conditions that might void the warranty the very day that you buy it. It is not fun to make a warranty call the day after you buy the house only to find out that the warranty was voided because someone planted a tree to close to the house.
ii. Ask the foundation repair company for a copy of the base line readings (final readings) measured after the repairs were made. This is super important. How will you and the foundation repair company know how much the house moved if no one knows the measurements after it was repaired. The base line readings after the foundation repair was completed will tell you. You need to know this for warranty purposes.
iii. Ask a structural engineer familiar with foundation repair to assess the condition of the building and review your documents. Here is where A-1 Engineering can really help. We specialize in foundation repair so we can help you understand what you are buying. We won’t tell you whether or not to buy the house, we can only tell you what to expect from the foundation repair.
iv. Get a Foundation Elevation Survey of the floor before you move in. This is great information to start monitoring your house. This information can be used in the future in case you have a dispute with the foundation repair company.
v. Get a plumbing leak detection test. No one will tell you if you have an active plumbing leak unless it is specifically tested for. Active plumbing leaks typically void foundation repair warranties so you might end up buying a house with active plumbing leaks on a house that has had foundation repair and now the warranty is voided so you are stuck with the bill for the plumbing repairs AND additional foundation repair. So get the plumbing tested.
vi. Have a third party structural assessment on the condition of the house. An ASCE Level A assessment will give you a perspective on the condition of house. This assessment is also great for continuity to help you sell the house when it’s your turn.
4) New Houses (Brand New or Houses less than 10 years old)
Yes, even newly built or recently built homes can have some issues. It is not a bad idea to get the following:
1) Recall from our discussion about permits, double check that all permits have been closed for the new house.
2) Plumbing Leak Detection Test: From the permit search, you can find out which plumbing company constructed the plumbing system. It is not a bad idea to hire them or a third party to check to see if any plumbing issues exist.
a. House on sloping properties: We all have seen those houses that slope back very aggressively. So aggressively that you have a 8-foot or 15-foot tall wood deck across the back of your house. For these homes, get the plumber to check for bellies in the plumbing lines. It is very common for homes built on slopes to have plumbing issues because of the fill material that was used to build the foundation. Without getting too technical, the plumbing can break because of the weight of the foundation. Again, this typically happens on houses on a slope. Even houses built on rocky terrain have this issue.
3) Sellers, compile a history of warranty calls or claims.
4) Buyers, check if the house has a builder’s warranty.
a. If the house has a builders warranty, get a foundation elevation survey before you move in. Foundation elevation surveys are super valuable when you have to dispute a warranty claim for foundation problems. The survey sets the baseline readings now that you own it so if the house moves, you can show the warranty company actual readings measured by a structural engineer. Read our most recent article: Why Home Warranty Company’s Win Claims.
b. But sure to understand what type of warranty, what it covers and how to get it transferred to you.
5) New homes that have had foundation repair, go back and read the previous discussion that we had about homes with foundation repair.
We certainly hope that this information is of value to you. If anything, we hope it reminds you to ask questions and do some research. We will update this information as time goes on. Feel free to let us know if this information was helpful. We also welcome to hear about any great links or resources that you found helpful in your research of properties.
You are always welcomed to call A-1 Engineering, LLC to see how our San Antonio or Austin engineers can help. We have structural engineers and drainage engineers that can provide you with great insight into the condition of your property.