As we searched for our first home in the Bay Area, we fell in love with older homes, ranging from the 19th century Victorians, the Bungalows of the 1920s-1930, to the Eichler homes of the 1950s. An older home has much more characters than a cookie-cutter planned development unit (PDU). However, it often has a lot of issues. Our search went on for a year. We’ve got in contract twice. Each time we had to cancel the contract due to $100000-$150000 needed for repairing the house.Through the process, we learned quite a few lessons and would like to share with other first-time home buyers.
One of the major concerns with older homes is the foundation. Most real estate agents would recommend you to stay away from brick foundations. Brick foundation is typically the original foundation. It has been with the house since it was built. Most brick foundations will need to be replaced at some point. It also significantly affect the resale value of the property. The cost of replacing brick foundation ranges from $100,000 to $150,000, depending on the size of the house.
Perimeter concrete foundation is another type of foundation that you often finds in older homes. It is important that you check the quality of the foundation. If the house has a crawlspace, I typically crawled down and used a screw-driver to poke at the foundation. Bring a screw-driver and a flash-flight on your second tour of the home before making the offer. Ask the seller for permission to get in the crawl space. If you see the concrete is highly porous or crumbles when you poke at it, it is the sign that the foundation might need to be replaced very soon.
If you see efflorescence (which is a white powdery deposit) on the concrete, or moisture in the crawl space, there might be an indication of improper grading or too much water in the foundation during rain seasons. Often a termite inspector or a home inspector will be able to tell you whether the foundation is still servicable and what you might need to do for repair or upgrade in the near future. For more information on foundation issues in older homes, please check out http://www.stlouisfoundationrepair.com/home-buying-foundation-problems.htm .
In most older homes, the foundations are not anchored or earthquake retrofited. If you are buying a home that has not been retrofitted, you may plan to do it in the near future to reduce damages to the structure of the house during earthquake.
If you plan to buy a house close to an earthquake fault line, you might need to check whether the property is in an active landslide zone. For instance, for a property in Berkeley or Oakland Hills, you may want to check Alan Kropp Landslide map at http://www.akropp.com/resources . If the property is indeed in an active landslide zone, you might want to bring in a structural engineer to access landslide risk and the stability of the structure. I have seen several multi-million-dollar properties ended up selling for $200,000-300,000 due to landslide issues.
You can check for what has been done on a property by checking its permit history. For instance, if you are buying in City of Alameda, you can check for permit history at http://www.ci.alameda.ca.us/services/permit_history.html . You can do the same thing for a Berkeley property at http://www.ci.berkeley.ca.us/gis/PPP/ . Most cities keep a database of the permits requested for a property. Some might be dated back to the 1950s.
The permit history can tell you a lot about the property, for instance, when the last time the roof was replaced or when the concrete foundation was put it. If you find out that the foundation was earthquake retrofited 5 years ago, it is very likely that the foundation is in a good shape. You can also check whether the electrical system has been upgraded through the permit history.
Another way of checking whether the electrical system has been upgraded is to check whether the outlets have two holes or three holes. If the outlets have only two holes, it is very likely that you are dealing with an out-of-date electrical system. It will take $8000-15000 to fully upgrade the electrical system in a 3 bedroom – 2 bath.
If the furnace is old, it is most likely that the ducts have asbestos. Removal of asbestos may cost up to $3000-$5000.
You should also check whethe the chimney is vertical or not. Some chimneys of older homes tend to lean due to exposure to wind/rain. Such chimney might be unstable and hazardous to your family and neighbors.
Good luck and we hope that this short guide will help you to navigate the complex process of buying an older home in the Bay Area.
1) Permit history of City of Alameda, http://www.ci.alameda.ca.us/services/permit_history.html
2) Buying a home with foundation issues, http://www.stlouisfoundationrepair.com/home-buying-foundation-problems.htm
3) Electrical upgrades, http://www.energy.gov/applianceselectronics.htm
4) Berkeley permit history, http://www.ci.berkeley.ca.us/gis/PPP/
5) Alan Kropp landslide map, http://www.akropp.com/resources