How to Avoid the BIGGEST Mistake a First Time Homebuyer Can Make

I just learned about a really sad story from a buyer of a condo that I was selling in San Francisco recently, and it's the perfect example of one of the biggest mistakes buyers make when buying a condo or any property really, and the mistake is 100% avoidable, and I wanna tell you about the story so that you know not to make the same mistake. What's up everyone? This is Austin Klar, your lawyer turned real estate agent and real estate developer in San Francisco and Marin County. I've been a Bay Area resident for over a decade, giving me in-depth firsthand knowledge of what it's like to live and work there. If you're thinking about relocating or want more information about the market, definitely reach out to me. My contact information's in the description below. I will personally answer every call, every email, every text, and I'd be more than happy to help you. And if you like videos just like this, please subscribe to my channel and don't forget to click the bell so you're alerted every single time I post a video. All right, so this video is all about a really unfortunate mistake that a buyer made and it was totally avoidable. So I'm telling you about it so you avoid making the same mistake that he did. I listed a condo in Pacific Heights in San Francisco recently, and one of the unique things about the San Francisco market and the Marin market as well is that 99% of the time, most of the disclosures that you get after getting into escrow in other jurisdictions, you actually get before getting into escrow, before you even make an offer here in San Francisco and Marin. So things like title reports and environmental hazards reports and home inspections, pest inspections, seller disclosures, all the statutory disclosures, all of those things that you might get after getting into escrow in other places, you actually have upfront in San Francisco and in Marin County when a property hits the market. And this is great because you can go, you know, eyes wide open before making an offer on a property. And that was exactly what happened here. Before I brought the condo onto the market, I worked for literally hours with my seller going over all of the disclosures, making sure every question was answered, making sure that all the details that I was aware of and what I knew that he was aware of were in those disclosures and available to potential buyers coming to see the property and potentially making an offer on the property. One of the issues that was a topic of the disclosures was a leak that happened before we came to market. There was some damage to the interior of his unit that we repaired before coming to market, but damage that had been done to the exterior, the exterior paint, exterior siding, those types of issues, that's an HOA issue because it relates to the building as a whole. And that's not something that was repaired in advance of us coming to market. It's an issue that the HOA was aware of. And was discussing, you know, when it was going to get repaired, how much the repairs were going to cost. All of that was being discussed during HOA board meetings, you know, in the lead-up to and after we got on the market. So repairs for that item hadn't been approved yet, but they were certainly anticipated. And since we knew about them, we disclosed them. In the disclosures, in response to specific questions about leaks in the building, we marked that there had been. And in response to ongoing maintenance issues and any anticipated special assessments that were coming to pay for these issues, we specifically disclosed that the leak was going to need to be addressed. And all of that information was available for potential buyers the moment that we listed the property on the market. So this buyer in particular had access to that information and his agent had access to that information upfront before making an offer, you know, when considering what price to put in the offer and all the other terms that they were negotiating as part of their offer. Buyer and my seller eventually got into contract and a few weeks later we closed, no issues. After the close of escrow, I got a call from both the buyer and the buyer's agent buyer's agent telling me that the HOA, you know, after the close of escrow, just approved a special assessment, which is like a one-time fee that each resident of a condo building needs to pay if there isn't enough in the HOA bank account to cover the issue. They just got notice of a $6,000 per unit special assessment to address the leak damage to the building. Agent and the buyer both separately called me asking, you know, was this disclosed? Where was it disclosed? What specifically did you say about the issue? They were not aware of it. So I, I knew we had disclosed it because I went over that issue with my seller and we put it in the documents. So I resent those documents to both the buyer and the buyer's agent and showed them precisely where we had disclosed these issues in multiple places. And the response from them basically during these calls was, Yep, it's clearly there. The buyer basically told me that, you know, he got caught up in the whirlwind and stress of buying a home for the first time that, you know, he didn't go over everything in detail. This was something that he overlooked. And he wasn't aware of it when he put an offer in on the house. And the agent told me that he hadn't specifically walked the buyer through these documents that disclosed those issues. So neither of them were aware of this, but obviously had access to that information. Nothing was being hidden. Would the buyer have still put an offer in on the property, you know, had he known that stuff? Who knows? At the end of the day, you know, I think we priced it pretty appropriately in light of these known issues. And I think the buyer got a pretty good deal on the condo. He got it for a little bit below ask. So would he still have put in an offer and would it have been similar to what he ultimately bought it for? Maybe, but maybe not. You know, the point is he wasn't aware of these issues. Understandably, the buyer was really frustrated and having, you know, just moved in this condo, already having to come out of pocket an extra $6,000 that he wasn't anticipating. So what's the moral of the story? Read the disclosures. Buying a home is one of, if not the biggest financial decisions that you are ever gonna make in your life. Hundreds of thousands of dollars, maybe multiple millions of dollars. If you have access to disclosures upfront, like you do here in San Francisco and Marin, read them. It is free information for you to consider when thinking about putting an offer in on the property and what your terms are. And you also need to be working with an agent who reads them themselves and gives you some guidance on what they think about the property and its condition relative to the price point based on what's in those disclosures. That is bare minimum for a buyer and an agent to do. And remember, at the end of the day, a buyer is going to have to sign all of these documents basically saying, I've, I've read these, I understand them, and I'm moving forward with this transaction regardless. So you're going to be on the hook for what is in those disclosures. You may as well read them so you know what you're getting into. And there's a moral of the story for sellers here too. Failure to disclose is one of the most common claims brought in litigation arising out of real estate transactions. So as sellers, if you are aware of an issue or a potential issue, or it's even a gray area, disclose it. Disclose, disclose, disclose. It is always better to disclose the issues upfront and deal with them when you're pricing your property and discussing and negotiating those issues with potential buyers rather than not disclosing it and hoping that nobody notices. Somebody is going to notice. It is not worth the risk of failing to disclose. I have a whole video about some of the most important disclosures in a real estate transaction. There's— some of them are specific to San Francisco and Marin, but the video is applicable more generally too. You're going to get similar types of documents in other areas too. They just might not look exactly the same. So if you're thinking about buying a place and you've never done it before, especially, you know, definitely worth looking at that video. I've linked to it in the description below. If you're thinking about relocating or want more information about disclosures, how to read them, or about the market, definitely reach out to me. My contact information is also in the description below. I will personally answer every call, every email, every text, and I'd be more than happy to help you. And if you like videos just like this, please subscribe to my channel and don't forget to click the bell so you're alerted every single time I post a video.