4 Red Flags with San Carlos Home Purchases

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While San Carlos is a truly wonderful place to purchase a home, it is not without its quirks and pitfalls.  Unfortunately, some buyers are not aware of some of these red flags until it is too late. The following is what I would say should be the top 4 red flags that do not get the attention they deserve from prospective buyers in San Carlos:

(1) Bedrooms/Bath/Square Footage. The following is a typical example of a problem that has plagued San Carlos for years:  A buyer purchases a home that appears to be a 3 bedroom, 2 bath home with 1,500 square feet. It is also advertised as such on the MLS and marketing brochures.  The buyer will then move into the home and not suspect any issue, maybe for as long as a few years.  Commonly, buyers will refinance the property within a few years.  Any refinance will trigger an appraisal.  The appraiser will take a look at the county records and see that the home is actually only a 2 bedroom, 2 bath home with 1,250 square feet of permitted living space. Many homeowners will then be stunned to learn that they, in fact, were taken.  Sometimes sellers do this intentionally, but more often it is unintentional.  San Carlos is famous for this type of issue because many of the homes in San Carlos are 50 to 60 years old and have been the victim bad remodeling over the years, and much of that work was never done with a permit.  If the work was not done with a permit, the increased square footage, bedroom modification, etc., will not show up on any city or county record. In the above example, the current homeowner and the previous owner are going to find themselves in a difficult predicament.

>>> How to prevent this: Unfortunately, the majority of the blame in these instances falls on the listing agent.  Sellers often look to their agent for guidance in this area.  By law, the listing agent can only advertise what is permitted.  So, if the county is showing a 2 bedroom, 2 bath home with 1,250 square feet, even though the house has 3 bedrooms and measuring out to 1,500 square feet….the agent can only advertise the home as a 2 bedroom, 2 bath home with 1,250 square feet.  They can advertise the unpermitted section as a “bonus” room or area that is not permitted. If you are a seller, insist that your agent only advertise what is permitted by the county and city.  If you are a buyer, insist that you and your agent visit the county and city to verify that the home is permitted as to what is being advertised.

2.  School District. Now, more than ever, this topic deserves serious attention.  There are a few different items to look into:

First, on the high school level, intra-district transfers for properties assigned to Sequoia and wanting to go to Carlmont are mostly being rejected.  Some properties in San Carlos, mostly north of San Carlos Avenue are still assigned to Carlmont.  However, most of Howard Park and White Oaks are districted for Sequoia High School.

Second, moving to a particular area of San Carlos no longer guarantees a spot in the neighborhood school.  And if you think this is overstated, just ask many of the families expecting to attend White Oaks in the fall who are being transferred to other San Carlos elementary schools.  There is a growing consensus that the San Carlos School District will need to re-draw the school district boundaries.

Third, many San Carlos buyers do not realize that buying in San Carlos does not guarantee San Carlos Schools.  The majority of the Alder Manor Area is assigned to Redwood City schools.  Even more surprising to some buyers is that some homes in northern San Carlos are assigned to Belmont schools.

>>> How to prevent this: Call the school district prior to putting the offer in on the property.  Call the San Carlos School District and the Sequoia Union High School District to confirm the schools pre-assigned to the particular property.

3.  Adobe. While White Oaks and Howard Park remain the two heavy hitters for San Carlos, many home buyers do not realize that most of the homes in these two areas are built on adobe clay. Adobe does not absorb water well and tends to expand and contract more easily causing drainage issues and possible foundation problems.

>>> How to solve this issue: Do your homework.  The installation of a sump pump is key for most of these homes. Ask your property inspector to pay extra attention for settling and foundation issues.  If need be, bring in a foundation expert. Be especially concerned if the ground under the home is wet during the summer months.

4.  Market Conditions. Homes in San Carlos are currently following one of two patterns.  Sellers have  either priced them especially well or they have built in some serious negotiating room.  Do not be afraid to be aggressive on an underbid for a property that has been on the market for a lengthy period of time and do not be afraid to go all in if a property is truly priced very well.

One example of what we are seeing more and more of are situations such as the following:  Buyer’s agent:  “How did you arrive at your market price?’….Listing Agent:  “Well, we looked at what the sellers would need to do to break even and then added in the real estate fees, and that got us to our market price.”  Unfortunately, this type of “logic” is becoming more and more common. Be very cautious with this type of property.

>>> How to solve this issue: Solving this issue is not much different than with any other type of offer situation.  I have always told my buyers that the listing price is irrelevant in most cases.  Each buyer and his or her agent should come up with their own market analysis and pricing point for each particular property and offer a price and terms in line with that analysis.  Basically, each agent needs to do their homework and fully communicate those thoughts to each buyer.

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