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Oregon Property
Buyer Advisory A CONSUMER
INFORMATION PUBLICATION OF THE OREGON REAL ESTATE AGENCY A real estate licensee is vital to the home buying
process and can provide a variety of services in locating property, negotiating
the sale and advising the buyer. A real
estate agent is generally not qualified to discover defects or evaluate the
physical condition of property; however, a real estate agent can assist a buyer
in finding qualified inspectors and provide the buyer with documents and other
resources containing vital information about a prospective new home. This Advisory is designed to assist home buyers in
meeting their obligation to satisfy themselves as to the condition and
desirability of property they are interested in purchasing. Common issues in real property transactions
that home buyers often decide to investigate or verify are summarized in this
Advisory. In addition to investigating
or verifying these common issues, the buyer should tell the licensee with whom
they are working about any special concerns or issues the buyer may have
regarding the condition of the property or surrounding area. Such special concerns are not addressed in
this Advisory. Property Condition Inspection
and Investigation Professional Home Inspections OBTAINING A PROFESSIONAL HOME INSPECTION IS THE SINGLE MOST IMPORTANT THING A BUYER CAN DO FOR THEIR PROTECTION. A professional home inspection report will provide the buyer with detailed information about the home’s physical condition, its systems and fixtures and usually note any potential future problems. The buyer should carefully review an inspector’s proposal to determine the scope of the inspection. Some home inspectors may not inspect heating and cooling systems, the roof or other systems or components. A home inspection should be done by a home inspector or contractor licensed by the Oregon Construction Contractors Board (CCB). To inspect two or more components (i.e., roof, siding, structural), the home inspector must be certified and either be a licensed construction contractor or work for a licensed construction company. Also, a home inspector is not allowed to perform the repairs within a twelve-month period following the inspection. Buyers can review state home inspector requirements and standards of practice for inspectors on-line at: http://ccbed.ccb.state.or.us/WebPDF/CCB/Publications/hi-s-sop.pdf. Inspection of property is beyond the scope of expertise of a real estate licensee, but real estate licensees can provide buyers with a list of local inspectors. Licensees ordinarily will not recommend a specific inspector. Before hiring an inspector, the buyer should check with the CCB to determine the inspector’s current license status and whether there are any past or pending claims against the inspector. This can be done by visiting: http://www.ccb.state.or.us/New_Web/new_search_bak.htm
Buyers should not rely upon reports
done for others (previous buyers and/or sellers), because the report may not be
accurate and buyers may have no recourse against an inspector they have not
retained. Most residential sale
contracts contain a clause that allows the buyer to withdraw from the agreement
if a professional inspection they have done shows defects in the property. You will want to take advantage of this
important right by obtaining your own professional home inspection report from
a licensed professional inspector within the time frame specified in the sale
contract.
http://pesticide.oda.state.or.us Real estate licensees do not have the
training or expertise to inspect property for pests or dry rot. Like
any property condition report, buyers should not rely on the report of an
inspector they did not hire. A pest
and dry rot inspection is a limited inspection and is no substitute for a
complete whole home inspection by a licensed home inspector. Defective Products and Materials Some materials used in home construction are, or have
been, subject to a recall, class action suit, settlement or litigation. These materials are typically, but not
limited to, modern engineered construction materials used for siding, roofing,
insulation or other building purposes.
It is critical that a buyer carefully review any disclosures or
representations of the seller regarding such materials. A real estate licensee may assist the buyer
in that review, but inspection of property for defective products, systems, fixtures
or materials is beyond the scope of expertise of a real estate licensee. The
buyer, therefore, should make certain inspection for such materials is within
the scope of any home inspection ordered by the buyer. Like any property condition report, buyers should not rely on the
report of an inspector they did not hire. Similarly, homes may contain products in their systems
or fixtures that are, or have been, subject to a recall, class action suit,
settlement or litigation. Plumbing,
heating and electrical systems, among others, may contain such products. It is critical that a buyer carefully review
any disclosures or representations of the seller regarding such products. The buyer should, therefore, make certain
inspection for such products is within the scope of any home inspection ordered
by the buyer. A real estate licensee can
help the buyer find a suitable inspector. Repairs and Remodels Buyers should look for signs of repairs or remodeling
when viewing property. If repairs or
remodeling have been done, the buyer will want to make certain the work was
properly done. Buyers can ask the seller
for any invoices or other documentation for the work but, as with other
questions of property condition, there is no substitute for professional
inspection. A real estate licensee can help the buyer assess the need for a
building code compliance inspection but do not themselves have the training or
expertise to evaluate building code compliance.
If building permits were required for work done on the property (such
permits are typically required for structural changes, new additions, and new
plumbing and electrical work), the buyer should check with the city or county
building department to make sure the permits are in order. If permits were not properly obtained, the
new property owner could be held responsible. Ask your agent for assistance or
you can find the website for the county in which the property is located by
visiting:
http://www.aocweb.org/Cnty-links-frm.htm. Websites for cities can be found at:
http://www.orcities.org/cityinfo/cityWebSites.cfm. If repairs or remodels have been completed
very recently, the buyer should take steps to determine if there is any
possibility of construction liens being filed against the property after the
sale has closed. This can be done by the buyer raising the issue with their
title insurance provider. If any repairs are being required during the
transaction, the buyer should insure a licensed construction contractor is
doing the repairs. After the repairs
have been done, the buyer should consider having a re-inspection done to assure
the repairs were done properly. Sewer and Septic Systems Whether the property is connected to a city sewer,
septic system or other on-site wastewater treatment system is important
information. Even if the MLS data sheet
or Seller’s Property Disclosure Statement indicate that the home is connected
to the city sewer, the buyer should have their home inspector, or a licensed
plumber, verify the connection and its condition. Real estate licensees are not
licensed to do plumbing or septic inspections.
If the property has a septic
system or other on-site wastewater treatment system, the system should be
inspected by a licensed septic system installer or other on-site wastewater
treatment system professional hired by the buyer. Information about on-site wastewater treatment
systems, and licensed installers and pumpers, can be found on the website for
the Oregon Department of Environmental Quality (DEQ) at:
http://www.deq.state.or.us/wq/onsite/onsite.htm.
Buyers should check with the appropriate county department for specific
information on a particular property. Wells If domestic water for the property is supplied by a
private well, the seller is required by state law to test the well for total
coliform bacteria and nitrates. Buyers
may also want to have the well tested for contaminants other than bacteria and
nitrates. Buyers should verify that the
seller uses proper procedures when having the well tested. More information on
this state law requirement can be found at
http://www.dhs.state.or.us/publichealth/dwp/dwtfaq.cfm. State law also requires that all private wells, that have not already been registered with the state,
be registered at the time the property is transferred. Real estate forms in use in Well Flow Tests: If domestic water is
supplied by a private well, the buyer should verify to the extent possible
whether the well provides adequate water for domestic needs. It is strongly recommended that a well flow
test be conducted prior to the purchase of any property that depends on a well
for domestic water. Careful attention should be paid to any disclosures or
representations by the seller. Buyers
should review all available well records. More information on well logs is
available at:
http://www.wrd.state.or.us/groundwater/index.shtml. Buyers are advised to have well flow tested
by a professional. While real estate
licensees are not trained and do not have the expertise to test wells, they may
be able to direct you to the appropriate well professionals. Even when wells are inspected and tested,
it is impossible to guarantee a continued supply of water. Catastrophic
events can and do occur that can change the well quality virtually
overnight. Other events, such as
development and drought, can affect the quality of an aquifer over time. Any test of a well is merely a snapshot in
time and is not an indication of a well’s performance in the future. Any kind of well report should be viewed in
this light. PROFESSIONAL
INSPECTION, WELL LOG REVIEW AND FLOW TESTS ARE ABSOLUTELY CRITICAL IN
DETERMINING THE CONDITION OF A PRIVATE WELL.
Underground Oil Storage Tanks Buyers should be aware of potential problems
associated with underground oil storage tanks.
Although home heating oil tanks are not regulated, such tanks can cause
serious problems if they have leaked oil.
Advice on home heating oil tanks and the problems associated with them
can be found at:
http://www.deq.state.or.us/wmc/tank/ust-lust.htm.
A buyer who knows or suspects that property has an underground storage tank
should take appropriate steps to protect his own interests, including seeking
information from the Department of Environmental Quality (DEQ) and, if
necessary, consulting with an environmental hazards specialist or
attorney. BUYERS ARE ADVISED TO HIRE APPROPRIATELY TRAINED ENVIRONMENTAL
PROFESSIONALS TO INSPECT THE PROPERTY IF AN UNDERGROUD OIL STORAGE TANK IS
FOUND OR SUSPECTED. Oil storage tank
inspection, decommissioning and cleanup requires a special license from
DEQ. A list of licensed providers can be
found at
http://www.deq.state.or.us/wmc/tank/hotsplist.htm
or ask your real estate licensee for assistance in finding the proper
professional. Environmental Hazards Buyers should carefully review the Seller’s Property
Disclosure Statement and any inspection reports available to determine if any
of a number of potential environmental hazards may require further
investigation. Environmental hazards
include everything from expansive soils to landslides to forest fires,
tsunamis, floods and earthquakes.
Environmental hazards can also include indoor air quality (e.g., radon or carbon monoxide) and
hazardous materials, like asbestos.
Buyers concerned about external environmental hazards should check with
the county in which the property is located.
http://www.dhs.state.or.us/publichealth/superfund/sites.cfm. Real estate licensees are not trained, and do
not have the expertise, to discover and evaluate environmental hazards. Buyers, therefore, are advised to hire
appropriately trained environmental professionals to inspect the property and
its systems or fixtures for environmental hazards. Woodstoves DEQ has developed the statewide woodstove program to
promote the use of cleaner-burning woodstoves and to help homeowners to burn
wood more efficiently and with less pollution. Your community may have
additional rules governing the use of woodstoves and fireplaces. Check with
your city or county government to ask about local wood smoke ordinances. Buyers
should contact their insurer early in the home buying process to determine
what, if any, effect, a fireplace or woodstove may have on the availability or
cost of fire insurance For more information on woodstoves, visit:
http://www.deq.state.or.us/aq/woodstoves/index.htm.
Inspection of fireplaces and woodstoves requires special training and
expertise. Although a real estate
licensee may be able to help you find a local woodstove professional, they
cannot themselves inspect or evaluate a woodstove. Mold Molds are one of a variety of biological contaminants
which can be present in human structures, including in residential
housing. Mildew is perhaps the most
common and best known of the molds. Less
well known, and far less common, are certain molds identified as possible
contributors to illness, particularly in people with allergies. Such cases usually involve property with
defective siding, poor construction, water penetration problems, improper
ventilation or leaking plumbing. In a
few cases, these problems have led to the growth of molds which caused medical
conditions in some people. Buyers, if concerned about potentially harmful
molds, should arrange for inspection by a qualified professional. Information on moisture intrusion and mold
problems associated with human structures can be found at:
http://www.epa.gov/iaq/molds/moldresources.html. Inspection, discovery and evaluation of
specific water intrusion or mold problems requires extremely specialized
training and is well beyond the scope of a real estate licensee’s
expertise. Buyers are, therefore,
advised to hire appropriately trained professionals to inspect the property if
the buyer is concerned about the possibility of harmful molds. Smoke Alarms In Oregon, no person may sell a dwelling unless there
is installed in the dwelling unit an approved smoke detector or smoke alarm
installed in accordance with the rules of the State Fire Marshall. Because of this state law requirement, most
residential real estate sale forms contain a representation by the seller that,
at the earlier of possession or closing date, the dwelling will have an
operating smoke detector as required by law.
In Deaths, Crimes and External Conditions In Oregon, certain social conditions that may be of concern to buyers are considered not to be “material” by state law. Oregon Revised Statutes 93.275. Ordinarily, “material facts” must be disclosed by the seller or the seller’s agent. Because state law declares certain facts that may be important to a buyer to be not material, buyers cannot rely on the seller disclosing this kind of information. Buyers should undertake their own investigation if concerned that the property or a neighboring property has been the site of a death, crime, political activity, religious activity, or any other act or occurrence that does not adversely affect the physical condition of, or title to, real property, including that a convicted sex offender resides in the area. Concerned buyers can contact their local police for more information. Websites for Oregon counties can be found at: http://www.aocweb.org/Cnty-links-frm.htm. Websites for cities can be found at: http://www.orcities.org/cityinfo/cityWebSites.cfm. Some large cities (e.g., Portland) publish crime maps (e.g. www.portlandmaps.com) on their website. Information about registered sex offenders can be found by visiting http://www.doc.state.or.us/faq/sex_offender_reg.shtml. Buyers concerned that neighborhood properties may have been used for illegal drug manufacture can visit http://www.oregonbcd.org/druglabs/druglabs.html, the website of the Building Codes Division, for more information. Under Oregon law, neither the seller nor their agent is allowed to disclose that an owner or occupant of the real property has or had human immunodeficiency virus or acquired immune deficiency syndrome.
Neighborhoods Neighborhoods change over time so a buyer cannot
expect the area surrounding their home to stay as it is. Buyers concerned about potential development
in the surrounding area should check with governmental authorities to determine
if any large scale building projects are scheduled for the area. Building permits, zoning applications and
other planning actions are a matter of public record. In http://www.odot.state.or.us/stip/. Location within a school district can be an
important attribute of a neighborhood.
School boundaries, however, are subject to change. If location within a particular school
district is material to the purchase of real property, the buyer should
investigate the boundaries and the likelihood of change by contacting the
school district directly. Document
Inspection and Investigation Information Generally Information from third parties contained in the many
documents associated with a real property transaction is not independently
verified by real estate licensees. It is
the responsibility of the buyer to read the documents provided and ask
questions if uncertain or concerned.
Interpretation of many real property transaction documents involves the
practice of law and is, therefore, beyond the scope of a real estate licensee’s
expertise. BUYERS UNCERTAIN ABOUT THE
LEGAL EFFECT OF DOCUMENTS SHOULD CONSULT AN ATTORNEY. MLS Information Most properties marketed for sale by real estate
licensees are listed in a Multiple Listing Service (MLS). Information about the listing, provided to
the MLS by the listing broker, is made available to all subscribing members of
the MLS. This information is typically
contained in what is called an MLS “printout” or “data sheet.” Most of the information contained in an MLS
data sheet or printout is obtained from the seller or third-parties like the
county assessor’s office or other governmental entity. MLS data may be incomplete, an approximation
or otherwise inaccurate. Personal property cited on the MLS data sheet should
be included in the purchase agreement if the buyer wishes to have the personal
property included in the sale. BUYERS SHOULD NOT RELY ON MLS PROVIDED
INFORMATION IF THAT INFORMATION IS CONSIDERED IMPORTANT UNLESS THE BUYER
VERIFIES THE INFORMATION. Seller’s Property Disclosure Statement In most cases, residential property sellers in
Real Estate A contract for the sale of real property must be in
writing to be enforceable in an Most sale agreements are written using a standard
form. In BUYERS AND SELLERS ARE RESPONSIBLE FOR
SELECTING THE TERMS AND CONDITIONS OF THEIR AGREEMENT. REAL ESTATE LICENSEES CAN GIVE BUYERS
IMPORTANT MARKETING, BUSINESS AND NEGOTIATING ADVICE AND INFORMATION AND CAN
ASSIST IN PREPARATION OF THE http://www.osbar.org/public/legalhelp.html
or contact by phone at 503-684-3763 ( Financing The buyer’s ability to finance the property is an
important contingency in most residential transactions. Buyers must act in good faith and use best
efforts to obtain a loan if the sale is contingent upon obtaining a loan.
Buyers often seek pre-approval from a lender prior to writing an offer. A pre-approval letter should state that the
lender has reviewed the buyer’s credit report, income requirement and cash to
close and pre-approves the buyer for the loan, subject to an acceptable
appraisal of the property. The appraiser will normally work for the lender, not
the buyer. To check the status of an
appraiser, visit the Appraiser Certification and Licensure Board at:
http://www.oregonaclb.org/app_search.lasso. Once the appraisal has been received, the
underwriter authorizes final loan approval. Only
when the underwriting process is completed will an actual loan be secured. The
entire financing process normally takes approximately 30-45 days. If the seller is asked to finance any part of
the transaction, the buyer’s financial status will become material to the
transaction. Any material defect in the
buyer’s financial status must be fully disclosed to the seller. Because of the risks involved for the seller, the buyer should anticipate that
the seller will fully investigate the buyer’s credit worthiness prior to
agreeing to carry financing for the buyer.
A real estate licensee cannot hide material information from any party
to a real estate transaction and should not be asked to do so by the buyer or
seller. Title Report and Commitment The title report, or commitment to insure, produced by
a title insurance company contains important information that must be reviewed
by the buyer. In particular, the report
will list certain “exceptions” to the policy the company will issue. Buyers
should request copies of any documents mentioned in the report that are not
understood or raise concerns about the state of the title. General information about title issues can be
found at:
http://www.titlelawannotated.com.
Questions about the title report and
associated documents can be directed to the title or escrow officer issuing the
report or to the buyer’s attorney or surveyor. Review of title reports for legal
deficiencies involves the practice of law. Homeowners’ Insurance The insurance claims history for a home may affect the
cost of homeowners’ insurance, or even its insurability. Most insurance companies use a database
service called the Comprehensive Loss Underwriting Exchange (CLUE) to track
claims made. Depending on the content of
the CLUE report, and the insurance company’s policy, home insurance may prove
more difficult to get than expected. The
buyer’s claims history and credit report may also be used to determine
insurability. Insurers have used CLUE
reports and other information, coupled with termination provisions in the
policy, to cancel coverage after closing. IT IS CRITICAL THAT BUYERS ARRANGE FOR
HOMEOWNERS’ INSURANCE EARLY IN THE PROCESS OF PURCHASING PROPERTY RATHER THAN
WAITING UNTIL CLOSING TO GET INSURANCE.
If difficulty is experienced in obtaining the insurance, the buyer can
ask the seller to furnish them with a copy of the CLUE report on the
property. Homeowners can obtain a copy
of the report for their property online at:
http://www.choicetrust.com. Buyers may want to talk to the licensee they
are working with about whether obtaining suitable homeowners’ insurance should
be made a contingency of the sale. More information on homeowners insurance in
Square Footage and Acreage The square footage of structures and acreage data
found in MLS printouts, assessor records and the like are usually just
estimates and should not be relied upon.
Many Homeowners’ Association Documents,
Covenants, Conditions and Restrictions Covenants, conditions and restrictions, called
“CC&Rs,” are formally recorded private limitations on the right to use real
property. Often, but not always,
CC&Rs are enforced by a homeowners’ association. Review of the CC&Rs is typically part of
a real estate sale. Although real estate licensees are familiar with common
CC&R provisions, determining the legal effect of specific provisions is
considered the practice of law in Oregon and, therefore, beyond the expertise
of a real estate licensee. If the
subdivision in which the property is located is governed by a homeowners’
association, the CC&Rs may be very restrictive. Homeowners’ associations are often governed
by their own articles of incorporation, bylaws, rules and regulations. Homeowners’ association rules and regulations
can significantly impact a buyer’s plans for the property the buyer wants to
purchase. Planned communities and
condominiums are very likely to have detailed homeowners’ association governing
documents, mandatory fees and ongoing homeowner obligations. Governing documents, fees and homeowner
obligations should be reviewed by the buyer during the transaction. If you have questions about CC&Rs or your legal rights and remedies under a homeowners’ association governing documents, you should
have your attorney review the documents for you. A real estate licensee is prohibited by law
from giving legal advice. For more information on homeowners’ associations and
CC&Rs, visit
http://www.realtor.com/BASICS/condos/ccr.asp. Lead-Based Paint Disclosure Form Residential property built before 1978 (called “target” housing) is subject to the Residential Lead-Based Paint Disclosure Program administered by the Environmental Protection Agency (EPA) and the Department of Housing and Urban Development (HUD). The Act requires sellers of target housing to provide the buyer with a lead-based paint disclosure and the pamphlet entitled Protect Your Family From Lead in Your Home. Information about the requirements and samples of the forms can be found on EPA’s website at: http://www.epa.gov/opptintr/lead/leadbase.htm If you make an
offer on a home built before 1978 and do not receive the disclosure and
pamphlet, you should ask your real estate licensee about lead-based paint
disclosures. For more information and to
locate companies certified and licensed to conduct lead-based paint testing or
perform abatement, visit
http://www.dhs.state.or.us/publichealth/leadpaint/index.cfm
for the Department of Human Resources. For
Additional Information, Visit: Oregon Real Estate Agency:
http://www.rea.state.or.us/ Association of Oregon Counties:
http://www.aocweb.org League of Oregon Cities:
http://www.orcities.org Oregon Association of REALTORS®:
http://or.realtorplace.com
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