Buying a South Bay Historic Home
Steps for getting top dollar for your Historic Home
Step 1: The Decision to Buy
Obtaining or buying an older Victorian, Spanish Colonial Revival, Craftsman or any property built before 1940 is different from buying a property built after 1940. Do not let anyone tell you differently. Up to the late 1930’s building codes were different. In most cases there are actually no laws on the books in California that require an owner of these properties to bring them up to code (Brick buildings that serve for commercial or industrial use may be the exception as are public buildings. Larger apartment or condo buildings also may have retrofit requirements). Smaller multi family dwellings and single family homes have no retrofit requirements. Once the price of an older property has been established the most important issue then comes the condition of the property. Often seller’s are not aware, downplay problems or worse don’t admit to them. While it is common in areas of Northern and Central California for the seller to obtain a Physical Inspection prior to putting their properties on the market, Southern California property owners have not embraced this concept. Many seller’s in SoCal remember the days where even in a down market they could get a good price for their properties due to the thriving AeroSpace Business and the fact the housing stock was still relatively newer. Even property owner’s who were not born yet remember those days. Often Social sellers think that having a Pre Sale Home Inspection is giving away their money.
Step 2: Deciding on Style of Home and Area:
The first challenge or step is first deciding what kind of Vintage Home you really want. Suggest going with your gut or heart on this one because it never lies. Don’t buy a home because you really do not like it just because nothing else is available. Areas where these homes are can go a few years without having anything for sale and then ten homes will come for sale. Most homes come with Virtual Tours or pictures so that the inside can be viewed. Just keep in mind that sometimes a photographer is instructed to make a home look bigger or in better shape than it really is. Also keep in mind the size of the area. Old Torrance is roughly only a square mile where areas such as Vista Del Oro in San Pedro or Bixby Knolls, Bixby Terrace and Bixby Heights in Long Beach can go on for miles. While you certainly should not buy until you find the right home, the perfect home may never come along.
Establishing the area you would want to live in is also just as important. It may also limit what designs are available. Someone who has their heart set on a Victorian may not be able to find one in Torrance or Lomita since they are so very few in these cities. Area is also important due to coming to terms with how much risk you are willing to take. How is your pioneering spirit? Some of the areas of San Pedro, Long Beach and Los Angeles where Victorian or early examples of Craftsman properties are available are re-gentrifying. That simply means that they have higher crime rates than areas that are newer where you will find more Spanish Colonials, Tudors, Dutch and Early American Colonials and other designs such as Art Deco styles. The Vinegar Hill section of San Pedro the ship captains had built their homes from the 1880’s through 1920 have some of the best examples of Victorian architecture in the South Bay/Harbor area. There are also re-gentrifying areas of Los Angeles such as East Hollywood, Westlake, Angeles Heights and Leimert Park.
Since urban planning was done differently there are mixed use buildings, apartment buildings and single family dwelling all mixed in together. Buyers of properties built before 1930 will usually not find themselves finding a property they want in an area of just single family residences. Some of these re-gentrifying areas are just not for the faint of heart. Anytime you buy a property it is wise to go to the local Police Department Front Desk and ask what is going on in an area. This is true even if you are spending $100,000,000 to live in a new home in the Hollywood Hills. Sometimes owners are not aware or do not disclose problems such as neighbors who have large, noisy parties or rent out their home to those who have them. Also any area can have couples who take their fights into the streets on a regular basis, a teenage garage band next door or something you may find a total deal breaker.
Step 3: How Much Work are you Willing to Do:
How much work you want to and can afford to do is another important consideration. Renovating is not cheap. Hurricanes and the first that have consumed areas of the Western United States have tripled to quadrupled the cost of building materials. The building boom in California has resulted in good contractors having a waiting list two years long. Construction workers who are just out of a month-long apprenticeship are starting at $50.000 an hour plus benefits. After the cost of acquiring your Historic Home will you have the money and time to do the renovations? It pays to do your Homework. Whether you use a notebook or phone to keep notes it is advisable to do so using realistic numbers. Most contractors and tradesmen usually are willing to give a prospective client a ballpark figure for work that will need to be done. The time to do this is not after you are in escrow and facing heartbreak when it becomes apparent that the property you wanted is going to cost more to renovate than you thought. It is not advisable to start a renovation of a property unless you have at least 125% of the estimated. Cost of the renovation. There are always surprises you did not anticipate and those surprises are often not pleasant ones.
Another consideration is where you will live while you are renovating. With cash buyers who can keep their present home or rent temporary housing this is not a problem. If you are planning on living in your home as you renovate there will be times the stress of doing so will get to you even if you are going room by room. Being without the second bath is stressful if more than one person lives in the property. Just one person will get tired of not having a working kitchen for months at a time. If a couple is taking on a renovation it is advisable if you cannot afford to move into another house or apartment then renting or borrowing a motorhome may work out. A couple that has never had serious relation problems will likely have them during a major renovation. A couple that has had serious relationship problems a renovation will do it. Many times throughout the years have been called to come sell a home that has only had half the renovation done. Homes with plywood floors, no counter tops and stud walls with no drywall are not financeable when selling.
The weather patterns since the turn of the century where winters have mostly been dry and the occasional wet winters have aged most of the housing components exposed the outside elements for thirty years. Roofs, stucco, windows, chimney’s, fencing and especially foundations have aged quicker in all structures. One of four properties built before 1975 have had an issue, however small, with the foundations or slabs. Many of the two pour cement slabs have had to be resealed due to settling. Foundations have also had cracks that have had to be repaired. Foundations on older homes built before 1940 have a 50% chance of having foundation issues including small ones. Common issues include cracked foundations, foundation spurs due to moisture causing the rebar in the foundation to burst or spur, foundations that are near the end of their life span due to draining issues. Beach sand being used is common in homes built in Old Torrance between 1916 and 1936 when the beach was more accessible for a truck (Before 1916 wagons were used to haul building equipment and were not practical to send to the beach).
Other issues older homes come with are outdated electrical systems. Although it is accepted that electrical knob and tube wiring lasts 100 years many homes have not been rewired. Most that still have at least one wire that is still active. This is often due to the hassle of breaking out an entire ceiling or wall to replace it and then trying to match the plaster once the lathe has been repaired. Most homes built before 1950 have lathe and plaster walls. They make rooms quieter than drywall but are more difficult to patch.
Many older homes have outdated plumbing and disposal systems that are often in need of replacement. Copper plumbing used to last 40 to 50 years before problems came. Now you are lucky to have copper plumbing last 30 years before leaks start. The cast iron drains so popular from the time drains were being installed in bathrooms and kitchens are now in need of being replaced if they have not been. Redoing the drain system of a 1800 square foot home with a kitchen and two bathrooms can easily run $20,000. Rewiring this size of house is now at least $30,000. A roof for a flat roof on a Spanish house and replacing the roof under the tiles for 1800 sqft can go as high as $35,000. Foundation issues can cost anywhere from $10,000 to patch a few cracks and replace a few posts to over $100,000 to replace the entire foundation. Outdated heating systems can cost up to $20,000 to replace with a new forced air heater.
Step 4: Finding Your Historic Home:
This step can take days to years depending on what type of property you are looking for and the desired location. Some of the early Craftsman homes under Historic Protection in South Redondo turn over once an average of every 30 years. The same turnover rate applies to the larger Craftsman and Spanish Colonial Homes in Old Torrance and the Lomita Pines. Often the heirs are selling a home that is at best in fair condition. Some of the homes can be in such bad condition they sell for all cash to an investor who remodels and resells or flips them. Sometimes you may get lucky and someone with a pristine Historic Home will get a job transfer and have to sell. In any event you should be ready to compete with multiple offers some of which could be cash. Have your pre approval, proof of funds and your Realtor ready. Remember that Historic or Vintage homes are no longer being built. While Love Letters from the Buyer’s to the Seller’s are now frowned upon by both the National Association of Realtors and the California Association of Realtors, the Historic Properties is one market where they are still acceptable. Owners of these properties usually do care that the buyer is going to take care of or improve the property and be a good neighbor. Have had buyer’s who have to sell or refinance another property to buy end up getting their offer accepted in a multiple offer situation due their enthusiasm for owning the property.
Step 5: The Purchase
Buying any property is inconvenient, expensive and time consuming which is why this is the most nerve racking part of the process. After the possibility of beating out multiple offers the task of establishing what condition the property is in. Even if the Sellers have had a pre sale inspection it is advised you hire your own inspector. Also advisable is a Sewer Line Inspection and a Moisture Inspection. Leaking roofs in a Spanish Colonial can loosen the lathe and plaster ceilings. Replacing them will be expensive.
If you are obtaining financing an Appraisal will be done by the lender at your expense. Almost always an upfront expense. Depending on the area you have bought in and the property purchased, finding comparable sales and escrows for the property may be easy or not. In areas where there is not a lot of turnover it can be a nightmare. Many of the appraisers working today are number transcribers and have problems when asked to give a value of a property where there are not several ‘mirror’ or almost identical comparables that have closed escrow in the last 90 to 180 days. If buying a ‘One-of-Kind-Property’ be prepared if you obtain a bank loan that in order to close escrow you may have to renegotiate the price or change lenders. On a renegotiation you may have to put more money down.
When negotiating the price and terms it is always a good idea to find out the age of the sellers. Many older sellers expect to have their proceeds from the sale in the bank or the escrow account of the property they are moving into before leaving the property they have just sold. To them escrow is not closed until they have their check. If the older seller insists on a Cashier’s Check it could take a week to clear. During that time they will expect to stay in their just sold homes rent free until the check has cleared or their new purchase is closed and they have possession. It is also a good idea to put in the contract that all of the sellers personal possessions be gone from the premises including the front driveway or the alley. Hauling a dumpling, the furniture and other things the seller’s left behind can be very expensive. Have personally been involved in several transactions where the seller’s left everything they did not want in the house or on the curb or alley claiming the Salvation Army or the City Trash Collector was picking them up. Also keep in mind that older seller’s come from a generation where having an escrow extended because they needed more time was not a big deal and did not cost money to extend a rate lock. Make sure you or your Realtor have went over this with the seller and their Realtor.
Step 6: Closing the Escrow and Moving In.
Escrows close in Southern California electronically by computer (Read Selling Your Vintage Home). Since the laws tightened concerning loans and loan documents the loan paperwork is usually correct. If you are unable to go to escrow during business hours a traveling notary can be sent to your home or Realtors office to sign the loan documents once you are off work. Once the documents are signed they are sent to the lender and the escrow is sent the Closing or Funding Instructions. This usually instructs the escrow office concerning Insurance Binders, Copies of the Grant Deed and other items the lender will need to close the escrow. Once the loan is funded it the Escrow will close the next business day in Los Angeles County. While other Counties in California will close the same day Los Angeles County does not, That has been a policy for over 25 years, The exception is when either the buyer or the seller meets the messenger at the County Recorder’s Office in Norwalk or in the Los Angeles Airport Courthouse and waits in line to record all the documents.
Unless you have negotiated that the sellers have the house cleaned before turning over the keys you will probably have to do that yourself. Also even houses recently painted inside will look different vacant. After six months even white walls can show where the furniture was due to the strong Tropical Sun. Do not be surprised if you have to repaint or touch up. Movers or those helping you move will almost always break something. Walls and doorways will be nicked and have to be touched up. Carpets and floors may also have to be cleaned prior to moving in. Utilities cannot be listed in the new owners name without a closing statement but most utility companies will keep the utility on except for Southern California Edison. Unless the changeover is ordered by both the seller and buyer on the same day the electricity will go off due to Edison’s fear of being held liable for a squatter taking over the property.