When you make an offer on a property, your Realtor will recommend you go to the county to review records that relate to the property you are purchasing. And by the way, any offer you make should be contingent upon this county record review. While your Realtor will likely advise you to go to the county, he or she will almost certainly not go for you, though he or she might go with you. Here’s why: whoever reviews the records is responsible for knowing the contents.
Why does this matter? The problem developed years ago here in Mendocino County, when someone misplaced several property files. Before the files went missing, Realtors regularly went to the county, reviewed property files to see if there were any red tags or incomplete building permits, and sometimes made copies for their clients (the prospective buyers of the property).
In one case, a conscientious Realtor made a copy of a property file and gave it to his client, and the client was happy to see that the property was free and clear of any potential problems that might impede a clean sale. Two years later, the county found this misplaced file and blended the information from the file with the new file that had since been created. The documentation on this particular property now indicated that the Realtor had reviewed the file. The Realtor had not reviewed the file in its present state, but rather the old file. And he had told his client that all was fine.
Five years later, the client had lived in the house for years and was now ready to sell the property. Someone interested in buying the property went to review county records and discovered two red tags and an incomplete permit for a garage conversion. The Realtor was now stuck trying to explain how he reviewed the file, promised everything looked great, and that those documents were not there, all the while wiping egg from his face and wondering if his Errors and Omissions insurance would cover the cost of resolving the red tags and permit problems, especially given that the garage conversion was no longer legal.
This is why Realtors in Mendocino County will provide moral support, and may even walk you through the process of reviewing county files, but they will not do it for you. Problems resulting from the misplaced files don’t happen very often anymore, but they do sometimes. Once old files were found and merged with the new files, all the documentation became available to the public and as problems arose, they were resolved—and the lost files represent a smaller and smaller segment of the properties available in the county.
The bottom line is this: your Realtor will recommend you inspect county files in person and are satisfied with the results, and you should follow that recommendation. Also, it always pays to ask the current property owner if they have copies of permits. Sometimes an organized person will have a file folder full of this and other helpful information, and not think to mention it to the buyer. I’ve seen house records stored in some obscure places, like taped to the inside of the water heater closet door, so it’s worth asking rather than figuring they don’t exist or that you’ll find them on your own.
As I’ve said before, it’s always a good idea to keep records of home improvements, and it’s also an excellent idea to keep copies of completed permits. I once knew a fellow who had a copy of a permit signed off by the county, but the county didn’t have a copy! Remember any money you spend improving your property will result in lower capital gains taxes later. But only if you kept the records.
If you have questions about real estate or property management, please contact me at email@example.com or visit www.realtyworldselzer.com. If I use your suggestion in a column, I’ll send you’re a $5.00 gift card to Schat’s Bakery. If you’d like to read previous articles, visit my blog at www.richardselzer.com. Dick Selzer is a real estate broker who has been in the business for more than 35 years.