Expert: Sue Bernstein - 9/24/2007

Question
QUESTION: Hi Sue,

We just found out today that the house we are trying to buy (no offer has been submitted yet) has an illegal extension (the family room). We also found out from the City Hall of El Monte that the owner will be meeting with its representatives on 10/05/07 to settle down the matter. Is there a chance that the City will refuse to legalize the extension/family room? If yes, what will happen to it? What should we do now?

Thank you, in advance, for any advice.

Regards,
Andrew

ANSWER: Hi Andrew,

Since you have not written an offer you have no contractual obligation.  Usually when a city finds out that something has been built without permits they will require that it be to code and the owner must apply for a permit.  This can sometimes get very sticky as the city may require part or all of the addition removed or changed and a whole Pandora's box can be opened.  You might want to wait and see how this issue is resolved before making any decisions.  If you go ahead and purchase it now in its present condition you could end up with unexpected financial burdens.

Hope this helps and good luck.

Sue Bernstein

---------- FOLLOW-UP ----------

QUESTION: Dear Sue,

Thank you so much for your quick and helpful answer! We've decided to move on to another house. And I have another question for you. Is there any kind of contract between us, buyer, and our agent, who works for Coldwell Banker? If yes, when should we sign it? We've been told that if there is something wrong with the paperwork and there is no legal contract between us and the agent, we will be responsible for everything. Is it correct?

Regards,
Andrew

Answer
There is no contract between you and your agent unless you signed an exclusive buyers agreement(not usual).  When you find a house you want to submit an offer on your agent will complete it with you.  I don't know what you mean when you talk about being responsible for everything.  You have no responsibility until you submit an offer and it is accepted and the offer with spell out the terms of the offer. Your agent will also sign the offer and will be there to assist you during the escrow.