Heather Colson

You are asking all the right questions! The key here is to identify the current and future risks you will be taking in purchasing a property with unpermitted renovations and determine your tolerance to that risk. Your 'risk tolerance' is also determined by how you intend to use the property over time (live onsite?) or what you intend to do with the property after closing (rent or flip?). If living in the home yourself : will you be purchasing with a loan or using cash for the purchase? Will you be obtaining Home Owners Insurance on the property at closing? Lender and Insurance underwriting teams usually do a very thorough job of researching permits on updates to a particular property (assessing their risk to cover or approve the home for a loan) and will usually deny a loan or deny coverage until all renovations are brought up to code. If you are in the process of negotiating repairs on the purchase, I strongly recommend you hire a licensed contractor to give you a cost & needs assessment of what it would take to bring the property up to current codes and safety standards before closing - especially if you are purchasing with a loan - and negotiate for the seller to repair prior to closing. If buying cash, see if you can split the brunt of the repair costs to be performed by licensed contractors with the seller via repair negotiations before closing and then complete the remainder at your convenience with a licensed contractor after closing. Please keep in mind if you are purchasing the home with cash, owner occupying the home, and self-insuring you must understand that fire or other problems are much more likely to occur through lack-luster work performed by unlicensed individuals; and since you are aware of the concern prior to closing on the sale, this could substantially raise your liability threat-level should any individuals be harmed on your property as a result of any system malfunction. If you purchased with a loan and obtained home owners insurance, should any fire or hazard occur as a result of unpermitted work then insurance could deny the claim after the fire forensics report and leave you to manage the damages on your own. Thinking forward to a time when you may either want to rent out the home or resell it, understand that you may experience significant challenges trying to resell unless you take on the financial liability to bring all systems up to current safety codes in order for a future buyer to obtain financing and insurance coverage in that sale. In renting the home in the future instead of reselling, I strongly recommend that you bring all unpermitted renovations in the home up to current codes and standards, as neglecting to do so before placing a tenant could expose you to overwhelming legal trouble should a tenant be injured or lose their life due to hazard caused by the unpermitted work. (You might want to check your state Landlord Tenant Laws to determine owner liability in regards to property conditions.) Hope this helps you to make a clear and informed decision going forward!

Great question! First I hope you are being represented by a licensed real estate agent who is skilled in negotiations and is able to communicate well with the seller's agent, because large ticket requests usually take some finessing by a good agent representatives to accomplish. The first question to ask is 'how are you purchasing the property' : with a loan or cash? If you are using a loan, then a lender will want to reduce their risk liability on the home to make sure there are no impending system failures that could cause the home to lose value during the term of the loan (i.e. the roof is a 'system' of protection for the entire home). Next question is will you be obtaining insurance on the property at closing (keep in mind, any financed home purchase will require an insurance policy to be in place by the new buyer to cover both the lenders and the borrowers risk). Since this was a professional home inspection performed - now the seller is aware that the roof was determined to be end of life (the inspector would have documented his findings) and thus even if he terminated the purchase with you, he will have to face this concern with all future buyers until he either resolves it in some way or reduces the price for a cash buyer. (**Some state laws require the seller to update their Property Disclosures once a defect has been discovered**). You & the seller can both obtain roofing contractor quotes on what it would cost to repair or replace the roof to a level that can be insured; and then present your findings to negotiate a repair or replacement; many roofing companies will offer free quotes to inspect and determine appropriate courses of action - make sure they are Licensed & Bonded. After you gather all the information from your insurance company, inspector, state laws, and lender regarding loan requirements - your agent can take all that back to the listing agent and negotiate a suitable outcome for you regarding the roof and your purchase. (I've negotiated many total roof replacements for my clients, once I had all the right data and info available to me to present my clients position effectively; so its possible for you and your agent.) Best of luck!

Basically, an escalation clause is your way of saying, "I don't want to overpay aEUR" but I also don't want to lose." Your agent's version - $2,000 over the highest offer, capped at $600k - is pretty standard. It automatically bumps your bid above whoever else is competing, without you having to go back and forth. The upside is real - if there's no competition, you don't escalate at all. You only pay more if someone actually triggers the clause to go into effect. And in a hot market with multiple offers flying around, this kind of clause is often what gets people across the finish line on the home they love. I know you feel like you are showing your hand - and that is a fair concern. The seller now knows your ceiling is $600k.....that's information they didn't have before. But your agent should be just as smart and include wording in your offer to get you verification of how, where, and to what extent the escalation clause was triggered. There should be no ambiguity in your offer communication, so that your interests are protected and the guardrails are firmly set in place. Has anyone actually won using this? Yep! All the time. ...current company included. Escalation Clauses are a legal tool, available to you the buyer, to use in competitive markets. The clause itself isn't the problem aEUR" it's whether there are guardrails around it. It's there for you to use if the market is genuinely hot, and your agent has real reason to believe there are other offers on the property you are interested in - and WANT! Skip it if the market is slow, your agent is just guessing, or you're already at the edge of what you can afford. The bottom line: it's a legitimate move, not a gimmick aEUR" as long as you protect yourself by demanding to see any offer that triggers it.

Great question, and I'm glad you're asking before jumping in. Fractional ownership is not a scam aEUR" but it's also not what most people think it is when they first hear about it. How it actually works: Companies like Pacaso structure these as an LLC ownership model. You're literally buying a legal share of a property aEUR" not just booking time in it. That's the key difference from a timeshare. With a timeshare, you own nothing. With fractional ownership, you have a deeded interest in a real asset. Can you actually build equity? Yes and no. You can benefit if the property appreciates aEUR" your share goes up in value along with it. But here's the reality check: these are almost always vacation or luxury properties, not primary residences. The equity-building potential is tied entirely to how that specific market performs, and luxury vacation markets can be volatile! The resale question is the one I'd push hardest on. This is where you need to do your homework before signing anything. The secondary market for fractional shares is thin aEUR" meaning there aren't a lot of buyers lined up when you want out. Pacaso does operate their own resale platform, which helps, but it's not the same as listing a home on the open market. Ask specifically: *What's the average time to sell a share? What fees are involved in reselling?* Is it a glorified timeshare? Structurally, no. Legally, you own something real. But the *lifestyle limitations* can feel similar aEUR" you're sharing the calendar with co-owners, there are usage rules, and you don't control the property the way you would a home you own outright. Here's my honest take for someone trying to get into a high-priced market. If your goal is building long-term wealth through real estate, fractional ownership in a vacation property is a different vehicle than buying a primary residence or even a traditional investment property. It might scratch the itch of owning real estate, but it's unlikely to be the foothold into a high-priced market that gets you to your next purchase. You would make better investments over time by having full ownership control over your assets to leverage and utilize as needed.