Jonas Salk, the scientist physician who discovered the first successful polio vaccine is quoted as saying "What people think of as the moment of discovery is really the discovery of the question.” Undoubtedly, this is a universal concept that should be followed in our personal lives, business dealings and in our professions. And at no time is it more important than when purchasing a home in a state that recognizes the common law doctrine of Caveat Emptor (better recognized as “buyer beware”). North Carolina is such a state.
Buyers unfamiliar with real estate practices in North Carolina may not realize sellers aren’t required to disclose important condition details about the property (or other factors that can affect ownership). The seller may elect to disclose said information. And many choose an attitude of transparency when selling their home which frequently is translated by buyers as a sign of good faith. But there is no mandate to force a seller to reveal known defects. The responsibility to discover falls squarely on the shoulders of a buyer and/or the licensed real estate brokers participating in the transaction.
I know of buyers in Raleigh, North Carolina who sought to purchase a 100+ year old home. The sellers of the home were represented by a listing agent from a separate firm whose marketing materials described the property as a “historic restoration”. Both the interior and exterior of the home were tastefully updated with new finish materials and a reworked floor-plan designed by local architects. The home looked great! And the buyers were willing to overlook a few less desirable factors in order to move diligently toward settlement.
The phrase “historic restoration” led these buyers to believe the property received a tremendous amount of scrutiny from the sellers and the contractors who completed work to remodel the home prior to listing. The buyers assumed a historic restoration would not only include high quality workmanship but would have also addressed any defects with structural components easily observed while the home was stripped of it’s finishes and cladding. After all, the listing agent touted the project as having met or exceeded all municipal building permit requirements. With this kind of pedigree, the home inspection should be a piece of cake, right? The buyers were so confident the sellers would make sure the property was in good order they made an offer slightly over asking price in order to have the best chance of making this home their own. The Raleigh real estate market is a fast paced environment and buyers must act quickly to secure a good property.
Sadly, the home inspection revealed defects in the foundation and other structural components. Additionally, the inspector found surprising levels of poor workmanship and a failure to follow building codes in the replacement of roof surfaces and other roofing issues.
Now, to be fair, no home is perfect. Even new construction homes will have a few defects in workmanship. But the issues discovered during the inspection of this historically renovated property were not merely oversights. They were clear violations of best practices and North Carolina building code requirements.
But wait…the listing agent represented that the project met or exceeded permit requirements. The truth is, that's entirely possible. So why the conflict between the agent’s statement and the inspectors findings? “The moment of discovery is really the discovery of the question”.
Hearing that the home met or exceeded required building permits could lead one to believe that all work conducted was accomplished under permit. However, when remodeling an existing structure there are some projects that require a permit and others that do not. This particular renovation did not trigger the need for the City to evaluate the foundation because the restoration did not include any changes to the footprint of the existing home (aside from a small deck which was permitted). And you might be surprised to know that the City of Raleigh does not require a permit to replace roof coverings. So when the home inspector discovered that the attic had virtually no adequate ventilation, an improper roof covering material (shingles) on a shallow pitch roof and poor workmanship to install a rubber membrane roof surface on this home, the right questions become apparent.
“Please tell me everything you did to improve or renovate this home and if all of those projects were completed under permit”?
Asking the right questions early in the process can prevent wasted time, energy and resources. When finding a home you want to call yours, make sure to develop a comprehensive list of questions about all aspects of the property that are important to you. Then attempt to gather complete answers as soon as possible. In Raleigh’s hot housing market, time is rarely on the side of the buyer. Prepare, act quickly and be decisive. This practice will serve you well on the road to settlement and the future enjoyment of your next home.