• Ron Wynn

Mistakes People Make When Buying a Home in Santa Monica

Mistakes can be very costly, especially when it comes to real estate in Santa Monica. You don’t want to find yourself in litigation after the close of escrow regarding specific performance or nonperformance, and you certainly don’t want to find yourself in litigation for disclosures that should’ve been made. Most litigation is caused because of disclosure issues.

In California, a seller of 1-4 units is obligated to fill a disclosure out; however, many transactions are exempt from seller disclosure. For example, in a trustee or a probate sale, the seller is exempt from certain disclosures. Therefore, it is important for the buyer to make additional investigation.

Often times, our Santa Monica Real Estate Agents say it is best to talk to people in the neighborhood to find out more about the property. If the property is tenant-occupied, sometimes you can learn a lot by speaking with the tenants.

Another disclosure that is very important to examine carefully is called the Seller Property Questionnaire. In this form a seller would advise a buyer about any modifications or repairs made in the last several years.

Our Santa Monica Realtors say it is important not to glaze over this section and really look at everything carefully, and ask questions on any statements that are made.

Ask Questions

Perhaps the seller talks about having recently rebuilt some steps or recently repaired a ceiling leak or painted a particular wall, these kinds of disclosures lead to asking more questions.

  • Why did the seller repair the ceiling?

  • Why did the seller restore the steps?

  • Why was the particular wall painted?

Many times, by asking certain questions and investigating something further, a buyer can find out about repairs that were made and perhaps find out they were not necessarily made adequately.

By asking further questions you may find out problems that have not been completely resolved. Our Santa Monica Buyers Agents say the more a buyer knows about a property, the better they can examine it and have the appropriate parties inspect it.

Due Your Due Diligence

Be sure to do your due diligence, particularly in areas pertaining to water penetration, moisture, and drainage. Many litigations are rooted to water and mold issues. Perhaps you noticed a smell in the house that doesn’t seem fresh. Our Santa Monica Real Estate Agents will often tell you, investigating that smell can lead in many directions.


Outgassing is another issue that should be investigated. Often homes that have been remodeled, or have new plastic and synthetic upgrades, can lead to toxic and health related issues. Our Santa Monica Listing Agents suggest you make sure to investigate anything that may look or smell suspicious.

Another mistake that buyers of homes often make are to rely on the value from an online publication. If you are not comfortable with the value yourself, do not rely on Zillow or Redfin as a competent source to know the value.

Get Professionally Appraised

If you really do not know the value and are not comfortable checking the comparable sales yourself, our Santa Monica Buyers Agents recommend you hire an appraiser to have the house professionally appraised.

A big mistake that can be made is to accept a tenant on the property. If you expect to move into the property and find it vacant on the close of escrow, it is imperative that arrangements be made to leave a sizable amount of money that would be forfeited to you in escrow, to guarantee the property would be delivered vacant. Rent back after sale agreements can be very tricky as well.

Perhaps it is not a tenant renting it out, but just the owner themselves renting back until a specific date in the future. The owner might take offense to asking for a sizable security deposit, but it would be good business to do that.

In a nutshell, the mistakes people make when buying a home are: waiving disclosures, waiving due diligence contingencies, not doing proper investigation, not getting an appraisal, and accepting a tenant to remain on the property until the close of escrow.

Hire An Attorney

In some cases, it might be advisable to have an attorney review the preliminary title report and any existing leases the purchase might be subject to.

Our expert Santa Monica Realtors say attorneys can often find problems that the untrained eye does not when examining an existing lease and reviewing disclosure statements. In some cases there are lot line discrepancies. It may be wise to have a lot survey to determine easements or possible encroachments.

It is also important to investigate any improvements that may not be to code or by city permit. As a buyer, you should receive copies of all city building permits.

Pay particular attention to improvements that are not to code and ask questions for explanation.

Dealing With Drains

Drainage is a big deal. Always look over the fence to see if a neighbor’s property looks to be draining to the subject property from a higher elevation.

Tree Roots

Be suspicious of large trees that could cause damage to the subject property or to your foundation. Tree roots can also cause sewer problems. Be sure to have a sewer video inspection to evaluate.

Our expert Santa Monica Real Estate Agents suggest you be suspicious of hillsides, and always do a geological inspection to investigate possible slippage.

Dealing With Funds and Escrow

Another mistake buyers sometimes make is releasing money to the seller before escrow closes. This can be an absolute sign of disaster. In most cases, an attorney would advise never to release funds until a property closes escrow. Releasing money to a client before title has passed is taking a big risk.

Waiving a loan contingency and waiving an appraisal contingency is also another risk. What happens if the loan or appraisal do not come through? You have now risked your deposit and could be subject to other damages if you do not perform.

Another thing that is important to consider are liquidated damages, litigation, and arbitration causes.

Our Santa Monica Real Estate Agents highly advise you speak with your attorney and discuss if a mediation and arbitration clauses is in your best interest.

Do not waive your preliminary title contingency, your loan contingency, your appraisal contingency, or your inspection contingency unless you are certain about what you are doing. A buyer under pressure may be coursed to relieving these contingencies and later on have regret.

Don't Get Emotionally Involved

A final mistake that some buyers make, far less significant but still relevant, is becoming too emotionally involved in the purchase. A buyer can easily be persuaded by beautiful staging and a superficial presentation that might lead a buyer into overpaying or undervaluing the true essence of the property.

Regardless to how beautiful it looks on the surface, a buyer needs to make the proper investigations. Staging can be a strong influence to fool you into making an offer, perhaps higher than the value of the property or what you would normally be willing to pay.

Our Santa Monica Real Estate Agents recommend you make sure to not become emotionally tied to the property because of superficial elements added to entice you as a buyer.

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