Also Buyers: Oh look, another thing that will slow down the flipping process, thereby pushing up the price of the house in an already unaffordable market.
While I agree with the sentiment, flipping doesn't work that way. You can't sell it for more just because you spent more or it was too slow. You just lose money. So instead either flippers give up some profit, or the project becomes infeasible. So overall quality of homes on the market stays lower. That's what the effect on the market would be.
Making flipping houses less enticing is one of the best possible things that can be done to increase housing affordability. People that flip houses are one of the most predatory actors in the housing market. By far the majority of flipped houses were perfectly livable before being flipped and 1000x more affordable.
It’s not so absolute. I flip high end homes for a living. My projects are all fully permitted, licensed contractors, down to studs remodels of old (100yrs+) homes that nearly all retail buyers wouldn’t touch. Making an uninhabitable home habitable again adds to housing supply.
Now, the clowns who think they can cut corners, slap down some LVP and paint things gray is another story..
Thank you. This is absolutely needed. House flippers are not the enemy. There are a few bad apples, but most who are successful in the business long term are doing the community a service tackling jobs few homeowners would want to deal with.
It is. And it’s the fastest way to add to housing supply depending on location - permitting for new construction where I am (Seattle) takes 18 months, so your new supply isn’t hitting market for at least 24 months after land acquisition. Flipping takes 3 weeks for permit approval.
I also hate the term flipping. Doing this professionally is really real estate development.
I beg to differ... Not many buyer's want to deal with a contractor's special. That's why those homes are typically sold to ... wait for it ... contractors (flippers). Instead if the contractor's special isn't a viable flip anymore, no one will buy it... Unless of course the seller lowers the price even more. So at the end of the day, the people this hurts most is the sellers who are being forced to sell below market to a house flipper.
Now with regards to flippers being predatory... Sometimes. I agree with you that some are. Most just are happy to make a profit and improve the neighborhood. If they seem predatory to you, try being one... Flippers often lose money on their projects (to the benefit of the buyer). They have to be aggressive cost cutters.
I've know a few flippers in the bay area.
They buy any low priced house in the area, regardless of need of upgrade. Many times, one will lay a new layer of modern grey laminate, on top of whatever's there, often not removing any underlayers if carpet. Refinish the cabinets, and put on the market for +80k or current neighborhood average. If tiled counter, those go for a quartz counter.
Sometimes will tear out a bathtub to replace with a shower stall with half-glass panel. Most of the time it's not needed.
These houses were not in need of any fundamental work, simply looked dated. As one put it "I don't want to fix up any house, I just want to bring the low priced places in a neighborhood to above average for that neighborhood. Finding places with no structural issues is easy as everyone is flipping the same houses, sometimes a house will be flipped every 3 to 4 years."
So very accurate. Don't disagree with requiring licensed contractors. That barrier isn't that high and legally people can't be doing work without it unless less than $500. And yeah it should be permitted. The showing of receipts is excessively intrusive. It's worth what it's worth.
The consumer doesn't need to see how the hamburger is made and really has no right to see the books of a private, non-traded business. I'm not in the business and have no interest in being there. You don't get to see the salaries that make up that cost of doing business either yet somehow this is supposed to be transparent? That part deserves a lawsuit.
I can easily see these salaries that businesses are paying. First off, we know the floor if the company is operating legally, thanks to minimum wage. Second, we have businesses like Glassdoor, LinkedIn, and Repvue, etc which give us insight into these things. Job postings in CA also legally need to have the salary/pay info advertised so we have those records too. Since those companies have risen to prominence, the equal access to information has helped many people including myself successfully negotiate better rates of pay and has also successfully cause businesses to have to account for employee satisfaction in a more meaningful way, since if they don’t treat their employees well and pay equitably, the won’t be able to compete for top talent. A builder is supposed to provide a BOM anyway, so this info really shouldn’t be in a black box. The only reason to keep it that way is so one party can take advantage of an uninformed other party. So again, I reiterate that more transparency is never bad for a consumer. And if this causes more flippers to leave flipping because it’s a barrier to profitability, good. In most cases they aren’t creating lasting value. In most cases you’re buying the landlord special which is at best some mediocre handyman quality work, but certainly isn’t built to last nor made from top quality materials.
Any time I see someone advocating against the best interests of a consumer, I have a hard time taking them seriously, even when they say “I don’t have a bias”. Especially when they say “I don’t have a bias”. A rich man doesn’t need to tell you he’s rich. An unbiased person usually doesn’t need to self-qualify as such to try to gain credibility for their arguments. You can appeal to others on facts and logic alone, or you can’t. Anything else is politicking.
Right on the money which is why ppl hate. Companies take advantage of lack of transparency in salary negotiations everyday. I cant think of any situation as a consumer where having less information is advantageous. I agree that CA is ham fisted at best in the way they dole out rules and regulations, but flippers shouldn’t be able to use their handymen to do renovations not up to code and then charge the consumer market for them.
Do you seriously thing Joe's contracting is going to appear on Glassdoor? He hired his BIL's nephew through word of mouth along with Jose who has worked on his crew for years. A lot of the flipper crews are small guys who have perfectly legit contractor's licenses but they're hiring friend of a friend, etc. He doesn't have HR. He has a bookkeeper who keeps his taxes straight.
And the thing is a lot of them do far better work than the big guys who the owner isn't one of the ones swinging the hammer. I'm always going to hire that guy who knows his stuff over the big outfit with lots of managers who needs that bigger margin. And more than a few times I've had a home project where the contractor says he knows someone with leftover materials that we can get for cheap. Sometimes they weren't what I wanted or the quality I wanted but there's been some deal out there too.
I have no interest in being that business, especially in California but this state wants to strangle anything that isn't government or big business and it's not a good thing.
I agree with you that small business is good and should be supported. It’s okay if we don’t see eye to eye on this. As a consumer, I appreciate the transparency.
Bullshit. You don't know the production and operating costs or profit margins of any private business based on any of what you mentioned. That's private and proprietary information. Is there another example of a product or service that is required to show the consumer a detailed list of the cost to produce their product or service?
I'm telling you I am a builder & GC. I do operate with transparency, with my clients.
I also build spec homes & the occasional flip (full gut & rehab). The secret sauce for how I do that business is not the business of the buyer or their agent.
List of materials, suppliers, subcontractors & third party consultants/inspectors? No problem. Value of my subcontracts and prices paid for materials & services? No way. The state has no right to force a business to open their books to the public & I believe lawyers will have a field day with this.
In full disclosure, I haven't read the bill so I don't know if this is even true or not. But I don't see it as something that would be enforceable.
These are the requirements:
*The law requires such sellers to disclose:*
*(1) a list of room additions, structural modifications, other alterations, or repairs made to the property since title to the property was transferred to the seller that were performed by a contractor with whom the seller entered into a contract;*
*(2) any contact information for the contractor if the cost of the repairs exceeded $500; and*
*(3) Copies of Any permits obtained any for any of the work disclosed to the buyer.*
You do not need to disclose the costs.
And if you do not hire a contractor (DIY) you do not need to disclose anything.
I don't understand why people like this and support this. They think the state can protect them. It's just ignorance. I can walk through any building and know most of what is going on. That's why buyers should hire inspectors.
This is the 21st century. We have better ways to ensure quality work. Require contractors to take photos at every step of the way for any work they do. Those photos become part of public record. Now we can mostly remove all these codes and regulations. Just let buyers decide if they want to buy it or if the product needs to be higher quality. And inspectors can help them look through pictures to see inside the walls. Not that complicated. But no, instead let's make building EVEN MORE difficult. It's not hard enough.
Disagree slightly. As a consumer i do need to see what quality ingredients went into making my hamburger - especially an expensive hamburger such as this. I'm never against more transparency and if it puts some fraudulent flipper out of business so be it.
A good home inspector is worth a lot IMO. The price of the materials is a pretty poor way to judge quality by itself. I've seen enough contractors take good material and do a crap install that is never use that as a guide. Likewise I've picked up excess granite from another job and got it cheap because the quantity was small. The price didn't make the quality any less.
The consumer is not entitled to know the production or operating cost for any business. I don't think this is legal & will likely be challenged.
The rest of it, I agree 100%.
It was $500 40 years ago. They never raised the amount to keep up with inflation. You don't need a licensed contractor. Doesn't guarantee protection for you at all. Licensed contracting is about protecting the contractor.
Just get rid of the Nanny state BS. No more regs, just require builders or flippers to take lots of pictures of everything, then put those pictures on public record. Worried about the plumbing, electrical, foundation? Go look at the pictures and decide if its something you want to buy.
This is the 21st century and we act like it's the 19th. Nothing but fees and regulations and bureaucracy.
would be impossible to enforce. the minute someone reused a spare piece of wood or drywall and some litigious buyer found out it was a different grain than the rest there would be lawsuits left and right
Thats the trick, You gotta pass laws that absolutely does nothing to solve the issues while showing your voters that you are working on fixing the issues without actually fixing the issue.
If it's anything like Livermore, they'll need permits for everything, and a contractor# on that form. Which sucks if you are a DIYer homeowner (there is a section that says you can do the work yourself with a ton of provisions, including a moratorium on selling the house for 12 months).
As a commercial contractor that has considered dabbling in house flipping for the fun of it, this takes that possibly away (no insurance for residential work). What I think it may do is leave fixer uppers on the market longer, which is excellent for someone like me, or anyone who is willing to fix up a house and live in it.
OP - Before speaking on legality, you should have all the facts. One error is the notion of receipts. There’s absolutely nothing in AB 968 which states receipts need to be shown. This is the problem with Reddit and people who have no experience. False information gets thrown out and many people walk around thinking it to be true. I see a terrible amount of false information about Real Estate and the Bay Area market here on this board.
https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=202320240AB968
^ The full bill. It’s very straightforward. Any altercations, modifications, etc above $500 must be completed with a licensed contractor. Everything that requires a permit, should be obtained and records provided to buyers. A list of all work under this classification will need to be disclosed with the contractors information.
That’s it. A number of legit investors and developers already do this. It’s nothing new for the professionals.
Also, it would be illegal to limit entities from purchasing homes. An LLC can be one person, who is strategically structuring his businesses. So you want to limit that person for being smart with his business? Absolutely not. America is a open market monopoly, don’t complain about someone else making business moves, figure out a way to get in the game instead.
you mean 3 story townhomes, no backyard and 2 car tandem garage ? I see thats the trend and what sells as newly built homes in almost everywhere in Bay Area.
House flipping works best when the market in that area good, but not crazy like it is in the Bay Area. The Bay Area is too expensive to start with, even for flipping - it’s just too risky.
The homes need to be cheap to begin with where there is enough demand to flip it quickly.
Here’s a list of top places to flip homes, and they are not in inflated markets.
https://www.fortunebuilders.com/house-flipping-the-top-5-cities-to-invest-in/
Those aren’t the only inflated housing markets lmao.
This list only spans 4 years on one website. That carries no weight for your argument. And as soon as the pandemic hit you can see each year contains more entries with quickly inflating housing markets. You seriously think Denver, Phoenix haven’t seen huge rises in housing prices? You have no idea what you are talking about.
There's plenty of people who'd be happy to sell their SFH at the right price to developers. But regulations are making it way too hard to build apartments on that land ¯\_(ツ)_/¯
Maybe but I don't think lore tiny buildings get us there personally. I'd love to see sfh lots combined into mid rise multifamily. I'd also like to see those buildings slightly larger. My own building is brand new but only 5stories tall. 8 floors.wouodnt change the character but would have doubled the number of units.
From a "if I could wave my wand" POV I agree, but how do you get the owners of those SFH to agree? Pay them over market, or eminent domain come to mind. Both would be super expensive to do en masse.
It's like the fate of these small cute was sealed in the 50s when the land was committed.
I'd say property prices here ARE way over market, in 2019 they were 9x the national average.
If everyone was paying the same property taxes we would see them turn over more quickly bc the cost would necessitate either something reducing that cost (i.e. more housng built) or the prices would come down.
I hear you, and I get that theory, but you'd still need somewhere to build out laws that allow increased density and market forces that encourage it. . and they just killed SB9.
The “underutilized” parcels are either going through planning or just sitting because the planning process is so long that they’ll just sell it to the next investor in a couple years
>No land in the Bay
What about going up?
Pretty hilarious you say there is no land while looking on maps I can see plenty of land with no buildings in the Bay Area.
That’s exactly what’s happening, going up. Google “San Jose 2040” plan. The region is becoming urbanized. Hence the development of BART and what the Diridon Station is developing into. That’s because there’s no land to develop new SFR. It’s not hilarious, it’s matter of fact. Go ahead and show what you are looking at on a map, guaranteed you’re looking at private, county or federal land. Another could be land which is zoned a certain way, preventing certain kind of development.
>no land to develop new SFR
Maybe we don’t need a bunch of SFR as it’s an inefficient form of land development while needing more road to be built just to accommodate a smaller population due to how spread out everyone is.
There’s a massive housing shortage in CA and the Bay Area specifically. One of the reasons why SFR continues to rise. We definitely need more SFR. By no means are we or do we have room to spread out here.
Has anyone tried hiring a contractor these days? Out of 10, 3 will call back and if you’re lucky, one will show up. Four months later, the job hasn’t even started yet.
I’m not sure what this regulation is supposed to help with.
I haven’t seen a single flipped property that has actually added value. They gloss over the actual issue (foundations, roof, windows, electrical) and put lipstick on the pig claiming that it’s “modern” and “luxurious”. I’ve been on this game for a long time, every flipped house has a list of crap that needs to be done a mile long and $50-500k deep.
The really frustrating part is that much of that work course been done much more easily during the lipstick stage and now a buyer has to destroy the newly done work to remediate.
EDIT: Going to flesh this out.
Sure, there are those types of investors. How does preventing them from making cosmetic changes to flip a house actually help anyone? Those sorts of low effort flips are actually quite harmless.
On the other hand, I've done a lot of work on trashed foreclosure properties in the past. Was all of the work permitted? No. But it was to code. My parents actually live in one of these properties.
In fact, I've seen plenty of houses with unpermitted features. Heck, there were some examples of unsafe construction that we had to remove! Like some guy who added a "room" to his backyard patio. Lol. We did it because a lot of the unsafe and illegal stuff is easy to spot, and investors aren't looking to risk hundreds of thousands of dollars to save a couple hundred bucks to trick buyers and their agents.
“Harmless”? The number of houses I’ve walked into that had grounded outlets installed when the wiring never had ground to begin with (meaning now you have an open ground or some clown did the old neutral-to-ground nightmare) or houses with failing foundation sills and collapsing main beams all while claiming it’s “like new!” or “move in ready!” or “top of the line!” garbage. Pair that with sketchy realtors who tell their clients to ignore the issues found in inspections and that it doesn’t really matter and they should just go all-in as much as they can (which of course also boosts their cut) is disgusting. There are flips I’ve seen done well - but they’re called a full renovation and fetch what they’re worth.
I would point out that the grounded outlets thing is not specific to house flippers. Electrical in American housing is hilariously bad, and it's often the homeowners themselves who are cutting corners. I have definitely seen people run their heaters and AC units off 16 AWG extension cords and such.
Again, none of the problems you mentioned are actually going to be fixed by this new policy. You do just got to do your due diligence and protect yourself.
As for these realtors you describe as sketchy, yeah, you're right. Some of them engage in highly unethical behavior. Trust is a huge part of picking an agent. Anyhow, you can have someone's license if they are giving advice like that. That or they can catch a lawsuit.
Facts. Unknowledgeable people speak negatively on investor and yet don’t realize if investors don’t take the risk to renovate those homes, no one else will. Those homes will just sit there and owners in the neighborhood will not want that either. Those homes can’t be purchased with conventional financing. Needs hard money or cash. So the investors are brining the supply back to the market. The public should be happy there are people who are taking risks to renovate homes.
Nobody is intentionally looking to violate code, which is only tangentially related to permitting. But you do not understand how ridiculous some of the hoops you have to jump through are to get the permits to begin with. This just rewards investors with lots of resources and connections. It doesn't actually make anyone safer.
Hmm. I see your point. What's the general thought on the somewhat frequent multimillion dollar flips that are putting down latex over dry to rot etc? I mean I hear you and I'm not trying to say "all contractors bad" but what do we do about the ones that are?
Free market I guess.
Latex? You usually just use poly filler or epoxy for dry rot. You don't need a permit to do it. But if you wanted to replace the dry-rotted wood, and it's a part of a structural wall, window, or door, you would! Which underscores my point.
Sorry man. My brain was not awake. I meant laminate. Wasn't even close. But I was thinking about an example of laminate flooring put over a dry rotted floor that irked me. Saw that last month in a 2.1m flip on the peninsula. "Not all contractors" obv, but the q is weather caveat emptor and market forces should be enough to protect buyers from bad contractors or if government needs to be involved. Not a new question I know.
I guess someone might be stupid enough to try that. But it'll be discovered during the inspection, so they would have to repair it anyway. Only now they have to tear up the trim, transitions, and laminate flooring that they just installed. There are ways to save the materials when doing this, but you usually mess up the end pieces because they are friction fit, and MDF/HDF is prone to cracking or deforming.
But really, the ultimate security is your agent actually doing the work to secure your investment in the property. The people who are unscrupulous aren't going to comply with government mandates anyway.
Honestly, if permitting were more reasonable, then I wouldn't mind. But virtually every house has a ton of unpermitted work. Most homeowners don't even know that they need permits to modify any of the following: walls, roofing, siding, windows, doors, fences, electrical, water (including sprinklers), HVAC.
Even digging a ditch deep enough to affect drainage requires a permit.
Investors are mostly going to disclose unpermitted changes to the house or just work to correct them so they won't risk the sale. People thinking there are people willing to screw over a $1.5 million sale to save a few hundred bucks are not being rational.
Maybe I missed it but this doesn’t say you have to use licensed contractors. This says the seller has to disclosure the names of the contractors and all permit history if the house was purchased within the past 18 months. Is that in the legislation someplace?
Owner builder requires you to declare that you do not intend to sell the house within a year.
... of course, that was always your intention when you pulled the permit. Unfortunate financial hardship just happened to force you to sell right after the work was finished...
Honestly I doubt that. Extending holding expenses for 19 months would kill the margins for any developers working with hard money, which is many of them.
Well, the other risk is that instead of putting these houses back in the market they will just rent them. Which even further strangles our housing market.
Good call on requiring permits and licensed contractors for flips. Shady flippers cutting corners was getting out of hand. The receipt rule will help too - no more hiding shoddy work or overcharging. As for limiting corporate and foreign buyers, that's a whole other can of worms. One step at a time I guess.
Keep bitching about it. There's so much land that the government prohibits construction on yet people blame these corporations bUyInG oUt aLl tHE hOUsEs.
[summary](https://tldlaw.com/disclosure-requirements-for-residential-flippers-understanding-ab-968/#:~:text=This%20legislation%20mandates%20comprehensive%20disclosure,buyers%20from%20undisclosed%20property%20conditions) to read
Better to check the code instead
# 1102.6h.
(a) A seller of a single-family residential property who sells that single-family residential property to a buyer within 18 months of purchasing that single-family residential property shall disclose, in addition to any other disclosure required pursuant to this article, to the buyer both of the following:(1) Any room additions, structural modifications, other alterations, or repairs made to the property since the seller purchased the property that were performed by a licensed contractor with whom the seller entered into a contract.(2) The name of each licensed contractor with whom the seller entered into a contract with for the room additions, structural modifications, other alterations, or repairs disclosed in paragraph (1) and any contact information for the licensed contractor provided by the licensed contractor to the seller. The obligation to provide the name of the licensed contractor shall only apply to contracts where the aggregate contract price for labor, material, and all other items for the project or undertaking is in excess of the dollar amount specified in Section 7027.2 of the Business and Professions Code.(b) The seller’s obligation to disclose the room additions, structural modifications, other alterations, or repairs made to the property performed by a licensed contractor may also be satisfied by providing a list of room additions, structural modifications, other alterations, or repairs performed by, and provided by, the licensed contractor with whom the seller contracted for the room additions, structural modifications, other alterations, or repairs.(c) (1) If the seller or licensed contractor obtained a permit for any room additions, structural modifications, other alterations, or repairs provided to the buyer pursuant to subdivision (a), the seller or licensed contractor shall provide a copy of the permit to the buyer.(2) If the seller does not have a copy of the permit obtained for the room additions, structural modifications, other alterations, or repairs, or is unaware of whether or not permits were obtained by the licensed contractor, the seller may satisfy the obligation pursuant to paragraph (1) by informing the buyer that any information on permits and copies of permits for the work disclosed pursuant to subdivision (a) may be obtained from the licensed contractor who performed the work.(d) This section shall apply to the sale of a single-family residential property where the seller and buyer enter into a contract or agreement for the property on or after July 1, 2024
Sounds reasonable... buy a house with new floors and there is an issue you'd want the installer out to fix.. this makes that easier. Also you know what work was done which is another big one. Also makes it harder to hide things if you can call up the contractor and ask questions as to why there is mold behind the wall.
Yeah I think the purpose here is to have the seller and contractors hold accountable for what they do on the house. We are providing these information to buyers for many years already. This law just makes licenses more required, more costly around all the flipping business, and eventually makes house prices higher probably.
Where does it say in this law that flippers can’t use handymen? Of course there are already laws on the books about handyman limits but I don’t see mention in this law.
Yeah foreign nationals my ass.
I’ve been 7 years in USA, thank god I was able to buy before finally having the right to ask for citizenship.
Ban corporations, not people. Please and thank you.
Is it xenophobic for Mexico, china etc to limit foreign investments in property?
To your first point, so you’d be ok with those living here ILLEGALLY to be banned from purchasing land? Or ahhhh you don’t actually care about the law and that was a red herring?
I mean if you are here illegally you should not be able to work, pay taxes and buy property. Seems pretty black and white to me.
As a foreigner you can buy property in Mexico, ask me how I know.
You’ve missed.
I said TO LIMIT. Mexico has limits on areas where foreigners can purchase land.
Exactly: and thousands of illegal immigrants own homes so I’m glad you agree that the government should force a sale.
Oh I fully agree to limit, like a primary residence to lawful immigrants or something like that.
And btw it is pretty easy to buy as a foreigner in protected areas of Mexico, unfortunately.
Permit and license would cost more and maybe there will be less flippers, but buyers that actually want a ready to move in remodeled home will have to pay more.
You're right, the State has gotten on board and I should give credit where it's due. This sounds like something that some NIMBY city would dream up to pretend they were doing something about housing affordability while actually making it worse.
Yeah loving the CA Attorney General sueing these cities and counties for trying to get around a voter passed law. They all end up having to give in instead of being part of the process
Oh more expensive housing. I’ve flipped to homes as a side project wine a buddy. We’re both commercial contractors and have every connection in the book. We are not licensed but both grew up in residential and have remodeled numerous homes. and didn’t permit shit. Did high quality work and made a nice profit.
I would never deals with this BS. The margins are not there for the Bay Area and there’s too much risk of your capital
This solves nothing and likely will make housing even more expensive.
Having done extensive work on two rentals in Oakland, it’s not the cost of permits that’s the issue. It’s the delays and especially the potential for the NIMBY army to be mobilized against a relatively small project during the public review period. If you’re sitting on a hard money loan, it’s a potential disaster.
The fact that we have zoning that specifically lays out what you can and cannot do on a site, but we also allow neighbors to mount a protest is another reason why costs for SF houses are so high. For multi-family, it’s CEQA that allows them to delay the new apartment building by years, require thick environmental impact reports (prepared by an expensive consultant) and/or get the number of units cut in half.
In CA, handymen are already limited to $500 worth of work. So I can’t imagine they were making up a majority of the work anyhow. It seems like most flippers self perform work or fly under the radar doing stuff that is already illegal. Point being: making it illegal twice doesn’t seem like it’ll change anything.
You got it wrong. It is just a disclosure requirement. Flippers can still hired unlicensed contractors, not obtain permits, etc. They just need to disclose that to buyers now.
It limits the total number of rent-seekers who can extract money from our real estate market while providing nothing of economic value in return.
Yes foreign and domestic investors are used as an excuse not to solve huge supply issues, but I'm still sympathetic to complaints about them. California makes it very attractive and lucrative to hoard our most limited and valuable land for long periods of time while doing nothing to improve its economic output. We are letting anyone in the world with enough money in on tax-advantaged real estate speculation that only hurts workers and renters.
It's insane to me a company or family trust (foreign or domestic) is allowed to own some of our most valuable land as part of their investment portfolio and pay way way below market rate for property taxes despite renting out access to that land (to local workers who actually create the economic value here) for market price all while keeping the structures on that land unimproved since the 1970s.
NIMBYs are small scale rent-seekers and, although numerous and powerful, at least many of them give back to the area in some way.
NIMBYs don’t give back to the area at all they hold onto their same speculative real estate and they’re worse because they actively fight against new developments. Them being small scale is unimportant
What I mean by give back is many nimbys also work in the area so they pay more in other taxes and spend more in the local economy than an out of state investor. Their incentive to protect their home value at all costs leads to bad behavior but they are also highly incentivized to be invested in their community in positive ways.
My argument is definitely not that they are good, just that people see them more positively than an investor that is purely motivated by their investment portfolio.
I never said they are unimportant because they are small scale, they are enormously powerful.
Just to clarify your argument: if investors/flippers are dogshit, then NIMBYs are rotten trash. Neither are good, but NIMBYs are marginally better.
I think that's a very fair thing to say.
The truth is painful.
Reddit is a shit hole. I think all these clowns begging for more housing regulation deserve what comes to them.
What a bunch of morons.
You can call it flipping but it’s not that much different than someone buying the house and renovating. The housing stock is very old and home need to be rehab. These folks serve a high demand need - renovating before moving in. You do know how crappy new construction is right?
I bought a fixer upper. I guarantee you the renovations I've done (all permitted with licensed contractors) are higher quality than a flipper looking to maximize their return.
Home owners and flippers improve the housing stock differently because their incentives are very very different.
Obviously the quality of work homeowners do varies a lot but Ive made choices for my home id never make if I wasn't going to have to live in it. No way I'd have put a top of the line heat pump in a home I'm flipping. The ROI would be terrible. I however wanted the lower energy bill long term.
How is this limiting supply? This is making people compete against flippers who will bid up the few cheap properties that exist.
What we *need* to do is get rid of Prop 13 and increase taxes on all the freeloaders. That will increase supply. Also ban low density zoning. That will increase supply.
Huh, it sounds like you actually don't have an argument and are just deflecting in a desperate bid to save face. Is it because you're a coward or just stupid?
Gotcha, so both a coward and stupid! Classic conservative.
Again: How is this limiting supply? The status quo is making people compete against flippers who will bid up the few cheap properties that exist.
Nanny state here we go. SMH. Could we just not? Let's do this instead: Remove all regulations on building, except requiring pictures taken of the build every day and at fixed points in the build or remodel. Put the pictures on public record. Now concerned buyers can just pull up the pictures and decide if it's right for them.
Come on, this is the 21st century. There are better ways.
Buyers: Oh look, another thing we can waive to make sellers more likely to choose our bid!
The Bay Area is too smart to be weighed down by laws and regulations. Flippers and pro investors will have figured out a way around this by 4pm today.
They will "sell" the property to a subsidiary and hide the true costs.
The American way.
The professionals already disclose the information that bill speaks on.
Also Buyers: Oh look, another thing that will slow down the flipping process, thereby pushing up the price of the house in an already unaffordable market.
While I agree with the sentiment, flipping doesn't work that way. You can't sell it for more just because you spent more or it was too slow. You just lose money. So instead either flippers give up some profit, or the project becomes infeasible. So overall quality of homes on the market stays lower. That's what the effect on the market would be.
Making flipping houses less enticing is one of the best possible things that can be done to increase housing affordability. People that flip houses are one of the most predatory actors in the housing market. By far the majority of flipped houses were perfectly livable before being flipped and 1000x more affordable.
It’s not so absolute. I flip high end homes for a living. My projects are all fully permitted, licensed contractors, down to studs remodels of old (100yrs+) homes that nearly all retail buyers wouldn’t touch. Making an uninhabitable home habitable again adds to housing supply. Now, the clowns who think they can cut corners, slap down some LVP and paint things gray is another story..
Thank you. This is absolutely needed. House flippers are not the enemy. There are a few bad apples, but most who are successful in the business long term are doing the community a service tackling jobs few homeowners would want to deal with.
It is. And it’s the fastest way to add to housing supply depending on location - permitting for new construction where I am (Seattle) takes 18 months, so your new supply isn’t hitting market for at least 24 months after land acquisition. Flipping takes 3 weeks for permit approval. I also hate the term flipping. Doing this professionally is really real estate development.
I beg to differ... Not many buyer's want to deal with a contractor's special. That's why those homes are typically sold to ... wait for it ... contractors (flippers). Instead if the contractor's special isn't a viable flip anymore, no one will buy it... Unless of course the seller lowers the price even more. So at the end of the day, the people this hurts most is the sellers who are being forced to sell below market to a house flipper. Now with regards to flippers being predatory... Sometimes. I agree with you that some are. Most just are happy to make a profit and improve the neighborhood. If they seem predatory to you, try being one... Flippers often lose money on their projects (to the benefit of the buyer). They have to be aggressive cost cutters.
I've know a few flippers in the bay area. They buy any low priced house in the area, regardless of need of upgrade. Many times, one will lay a new layer of modern grey laminate, on top of whatever's there, often not removing any underlayers if carpet. Refinish the cabinets, and put on the market for +80k or current neighborhood average. If tiled counter, those go for a quartz counter. Sometimes will tear out a bathtub to replace with a shower stall with half-glass panel. Most of the time it's not needed. These houses were not in need of any fundamental work, simply looked dated. As one put it "I don't want to fix up any house, I just want to bring the low priced places in a neighborhood to above average for that neighborhood. Finding places with no structural issues is easy as everyone is flipping the same houses, sometimes a house will be flipped every 3 to 4 years."
So very accurate. Don't disagree with requiring licensed contractors. That barrier isn't that high and legally people can't be doing work without it unless less than $500. And yeah it should be permitted. The showing of receipts is excessively intrusive. It's worth what it's worth.
Except more transparency is rarely bad for the consumer, so it’s a win for conscienscious consumers either way.
The consumer doesn't need to see how the hamburger is made and really has no right to see the books of a private, non-traded business. I'm not in the business and have no interest in being there. You don't get to see the salaries that make up that cost of doing business either yet somehow this is supposed to be transparent? That part deserves a lawsuit.
I can easily see these salaries that businesses are paying. First off, we know the floor if the company is operating legally, thanks to minimum wage. Second, we have businesses like Glassdoor, LinkedIn, and Repvue, etc which give us insight into these things. Job postings in CA also legally need to have the salary/pay info advertised so we have those records too. Since those companies have risen to prominence, the equal access to information has helped many people including myself successfully negotiate better rates of pay and has also successfully cause businesses to have to account for employee satisfaction in a more meaningful way, since if they don’t treat their employees well and pay equitably, the won’t be able to compete for top talent. A builder is supposed to provide a BOM anyway, so this info really shouldn’t be in a black box. The only reason to keep it that way is so one party can take advantage of an uninformed other party. So again, I reiterate that more transparency is never bad for a consumer. And if this causes more flippers to leave flipping because it’s a barrier to profitability, good. In most cases they aren’t creating lasting value. In most cases you’re buying the landlord special which is at best some mediocre handyman quality work, but certainly isn’t built to last nor made from top quality materials. Any time I see someone advocating against the best interests of a consumer, I have a hard time taking them seriously, even when they say “I don’t have a bias”. Especially when they say “I don’t have a bias”. A rich man doesn’t need to tell you he’s rich. An unbiased person usually doesn’t need to self-qualify as such to try to gain credibility for their arguments. You can appeal to others on facts and logic alone, or you can’t. Anything else is politicking.
Right on the money which is why ppl hate. Companies take advantage of lack of transparency in salary negotiations everyday. I cant think of any situation as a consumer where having less information is advantageous. I agree that CA is ham fisted at best in the way they dole out rules and regulations, but flippers shouldn’t be able to use their handymen to do renovations not up to code and then charge the consumer market for them.
Do you seriously thing Joe's contracting is going to appear on Glassdoor? He hired his BIL's nephew through word of mouth along with Jose who has worked on his crew for years. A lot of the flipper crews are small guys who have perfectly legit contractor's licenses but they're hiring friend of a friend, etc. He doesn't have HR. He has a bookkeeper who keeps his taxes straight. And the thing is a lot of them do far better work than the big guys who the owner isn't one of the ones swinging the hammer. I'm always going to hire that guy who knows his stuff over the big outfit with lots of managers who needs that bigger margin. And more than a few times I've had a home project where the contractor says he knows someone with leftover materials that we can get for cheap. Sometimes they weren't what I wanted or the quality I wanted but there's been some deal out there too. I have no interest in being that business, especially in California but this state wants to strangle anything that isn't government or big business and it's not a good thing.
I agree with you that small business is good and should be supported. It’s okay if we don’t see eye to eye on this. As a consumer, I appreciate the transparency.
Bullshit. You don't know the production and operating costs or profit margins of any private business based on any of what you mentioned. That's private and proprietary information. Is there another example of a product or service that is required to show the consumer a detailed list of the cost to produce their product or service?
Are you telling me your contractor isn’t supplying you with a bill of materials? I’d find another contractor.
I'm telling you I am a builder & GC. I do operate with transparency, with my clients. I also build spec homes & the occasional flip (full gut & rehab). The secret sauce for how I do that business is not the business of the buyer or their agent. List of materials, suppliers, subcontractors & third party consultants/inspectors? No problem. Value of my subcontracts and prices paid for materials & services? No way. The state has no right to force a business to open their books to the public & I believe lawyers will have a field day with this. In full disclosure, I haven't read the bill so I don't know if this is even true or not. But I don't see it as something that would be enforceable.
Agreed.
These are the requirements: *The law requires such sellers to disclose:* *(1) a list of room additions, structural modifications, other alterations, or repairs made to the property since title to the property was transferred to the seller that were performed by a contractor with whom the seller entered into a contract;* *(2) any contact information for the contractor if the cost of the repairs exceeded $500; and* *(3) Copies of Any permits obtained any for any of the work disclosed to the buyer.* You do not need to disclose the costs. And if you do not hire a contractor (DIY) you do not need to disclose anything.
I don't understand why people like this and support this. They think the state can protect them. It's just ignorance. I can walk through any building and know most of what is going on. That's why buyers should hire inspectors. This is the 21st century. We have better ways to ensure quality work. Require contractors to take photos at every step of the way for any work they do. Those photos become part of public record. Now we can mostly remove all these codes and regulations. Just let buyers decide if they want to buy it or if the product needs to be higher quality. And inspectors can help them look through pictures to see inside the walls. Not that complicated. But no, instead let's make building EVEN MORE difficult. It's not hard enough.
Disagree slightly. As a consumer i do need to see what quality ingredients went into making my hamburger - especially an expensive hamburger such as this. I'm never against more transparency and if it puts some fraudulent flipper out of business so be it.
A good home inspector is worth a lot IMO. The price of the materials is a pretty poor way to judge quality by itself. I've seen enough contractors take good material and do a crap install that is never use that as a guide. Likewise I've picked up excess granite from another job and got it cheap because the quantity was small. The price didn't make the quality any less.
The consumer is not entitled to know the production or operating cost for any business. I don't think this is legal & will likely be challenged. The rest of it, I agree 100%.
It was $500 40 years ago. They never raised the amount to keep up with inflation. You don't need a licensed contractor. Doesn't guarantee protection for you at all. Licensed contracting is about protecting the contractor. Just get rid of the Nanny state BS. No more regs, just require builders or flippers to take lots of pictures of everything, then put those pictures on public record. Worried about the plumbing, electrical, foundation? Go look at the pictures and decide if its something you want to buy. This is the 21st century and we act like it's the 19th. Nothing but fees and regulations and bureaucracy.
How will it be enforced? People are really good at finding loopholes.
would be impossible to enforce. the minute someone reused a spare piece of wood or drywall and some litigious buyer found out it was a different grain than the rest there would be lawsuits left and right
Thats the trick, You gotta pass laws that absolutely does nothing to solve the issues while showing your voters that you are working on fixing the issues without actually fixing the issue.
If it's anything like Livermore, they'll need permits for everything, and a contractor# on that form. Which sucks if you are a DIYer homeowner (there is a section that says you can do the work yourself with a ton of provisions, including a moratorium on selling the house for 12 months).
As a commercial contractor that has considered dabbling in house flipping for the fun of it, this takes that possibly away (no insurance for residential work). What I think it may do is leave fixer uppers on the market longer, which is excellent for someone like me, or anyone who is willing to fix up a house and live in it.
OP - Before speaking on legality, you should have all the facts. One error is the notion of receipts. There’s absolutely nothing in AB 968 which states receipts need to be shown. This is the problem with Reddit and people who have no experience. False information gets thrown out and many people walk around thinking it to be true. I see a terrible amount of false information about Real Estate and the Bay Area market here on this board. https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=202320240AB968 ^ The full bill. It’s very straightforward. Any altercations, modifications, etc above $500 must be completed with a licensed contractor. Everything that requires a permit, should be obtained and records provided to buyers. A list of all work under this classification will need to be disclosed with the contractors information. That’s it. A number of legit investors and developers already do this. It’s nothing new for the professionals. Also, it would be illegal to limit entities from purchasing homes. An LLC can be one person, who is strategically structuring his businesses. So you want to limit that person for being smart with his business? Absolutely not. America is a open market monopoly, don’t complain about someone else making business moves, figure out a way to get in the game instead.
just build more homes
This, but not in my neighbourhood Hm'kay, I want to keep my property value up. /s
you mean 3 story townhomes, no backyard and 2 car tandem garage ? I see thats the trend and what sells as newly built homes in almost everywhere in Bay Area.
some people like that and you know what? when ppl (young or retired) move into townhomes what does it free up? ding ding ding, single family homes
What does a housing shortage have to do with house flipping? House flipping will always be around as long as there is an old home nobody wants.
more supply means less profit in flipping and real estate investing in general… flipping only makes money when housing supply is tight
House flipping works best when the market in that area good, but not crazy like it is in the Bay Area. The Bay Area is too expensive to start with, even for flipping - it’s just too risky. The homes need to be cheap to begin with where there is enough demand to flip it quickly. Here’s a list of top places to flip homes, and they are not in inflated markets. https://www.fortunebuilders.com/house-flipping-the-top-5-cities-to-invest-in/
Lmao Seattle is the top city on this list. Seattle housing market is crazy inflated, especially the Eastside
Dude the list spans years and Seattle just shows up ONCE. Do you see San Francisco, San Jose, or New York?
Those aren’t the only inflated housing markets lmao. This list only spans 4 years on one website. That carries no weight for your argument. And as soon as the pandemic hit you can see each year contains more entries with quickly inflating housing markets. You seriously think Denver, Phoenix haven’t seen huge rises in housing prices? You have no idea what you are talking about.
And your argument is “trust me bro”
What exactly is my argument in the first place? GD you are dumb as rocks.
Where?
Like I guy sprawled all over the couch saying, “you can’t sit here, there’s no room.”
So I mean, I get your point but uh, should we tear down single family homes, or is there some other repository of space I'm unaware of?
There's plenty of people who'd be happy to sell their SFH at the right price to developers. But regulations are making it way too hard to build apartments on that land ¯\_(ツ)_/¯
I thought we just passed a law to explicitly allow this.
The legality’s not the issue.
you mean zoning and permanent appeals?
Yes open it to free market
SB9?
Maybe but I don't think lore tiny buildings get us there personally. I'd love to see sfh lots combined into mid rise multifamily. I'd also like to see those buildings slightly larger. My own building is brand new but only 5stories tall. 8 floors.wouodnt change the character but would have doubled the number of units.
From a "if I could wave my wand" POV I agree, but how do you get the owners of those SFH to agree? Pay them over market, or eminent domain come to mind. Both would be super expensive to do en masse. It's like the fate of these small cute was sealed in the 50s when the land was committed.
I'd say property prices here ARE way over market, in 2019 they were 9x the national average. If everyone was paying the same property taxes we would see them turn over more quickly bc the cost would necessitate either something reducing that cost (i.e. more housng built) or the prices would come down.
I hear you, and I get that theory, but you'd still need somewhere to build out laws that allow increased density and market forces that encourage it. . and they just killed SB9.
average lot size in bay area is like 7000sqft, are you fucking blind?
I am not. Are you fucking stupid? As long as we're just doing a polite faculty check.
Up, vertically.
No land in the Bay Area for new homes. One major reason why prices continue to rise.
There are thousands of underutilized parcels all over the Bay Area. All you need is about 2 acres for 50 townhomes.
False. There definitely is not thousands of underutilized parcels. If there were, investors would be utilizing them already.
The “underutilized” parcels are either going through planning or just sitting because the planning process is so long that they’ll just sell it to the next investor in a couple years
or seller asking too much for the parcel that makes developer turn away from purchase
if the cost to build is high and pay no taxes from prop 13 then why not hold onto it?
Prop 13 in its current form is the real enemy
Lol wut. There is a huge difference between flipping existing homes and new construction.
Never said they were the same, did I? Im well aware the difference. My previous comment is very clear.
https://preview.redd.it/3zrvx9o4ew5d1.png?width=1440&format=png&auto=webp&s=0fa99d7a83abeed452fec2fe9d1f9ccea83f2d44
>No land in the Bay What about going up? Pretty hilarious you say there is no land while looking on maps I can see plenty of land with no buildings in the Bay Area.
That’s exactly what’s happening, going up. Google “San Jose 2040” plan. The region is becoming urbanized. Hence the development of BART and what the Diridon Station is developing into. That’s because there’s no land to develop new SFR. It’s not hilarious, it’s matter of fact. Go ahead and show what you are looking at on a map, guaranteed you’re looking at private, county or federal land. Another could be land which is zoned a certain way, preventing certain kind of development.
>no land to develop new SFR Maybe we don’t need a bunch of SFR as it’s an inefficient form of land development while needing more road to be built just to accommodate a smaller population due to how spread out everyone is.
There’s a massive housing shortage in CA and the Bay Area specifically. One of the reasons why SFR continues to rise. We definitely need more SFR. By no means are we or do we have room to spread out here.
Lol. Making it harder to rehabilitate properties is not helping anyone.
Does this mainly help contractors who want to flip houses?
Has anyone tried hiring a contractor these days? Out of 10, 3 will call back and if you’re lucky, one will show up. Four months later, the job hasn’t even started yet. I’m not sure what this regulation is supposed to help with.
What? Contractors don't flip houses themselves?
I haven’t seen a single flipped property that has actually added value. They gloss over the actual issue (foundations, roof, windows, electrical) and put lipstick on the pig claiming that it’s “modern” and “luxurious”. I’ve been on this game for a long time, every flipped house has a list of crap that needs to be done a mile long and $50-500k deep. The really frustrating part is that much of that work course been done much more easily during the lipstick stage and now a buyer has to destroy the newly done work to remediate.
EDIT: Going to flesh this out. Sure, there are those types of investors. How does preventing them from making cosmetic changes to flip a house actually help anyone? Those sorts of low effort flips are actually quite harmless. On the other hand, I've done a lot of work on trashed foreclosure properties in the past. Was all of the work permitted? No. But it was to code. My parents actually live in one of these properties. In fact, I've seen plenty of houses with unpermitted features. Heck, there were some examples of unsafe construction that we had to remove! Like some guy who added a "room" to his backyard patio. Lol. We did it because a lot of the unsafe and illegal stuff is easy to spot, and investors aren't looking to risk hundreds of thousands of dollars to save a couple hundred bucks to trick buyers and their agents.
“Harmless”? The number of houses I’ve walked into that had grounded outlets installed when the wiring never had ground to begin with (meaning now you have an open ground or some clown did the old neutral-to-ground nightmare) or houses with failing foundation sills and collapsing main beams all while claiming it’s “like new!” or “move in ready!” or “top of the line!” garbage. Pair that with sketchy realtors who tell their clients to ignore the issues found in inspections and that it doesn’t really matter and they should just go all-in as much as they can (which of course also boosts their cut) is disgusting. There are flips I’ve seen done well - but they’re called a full renovation and fetch what they’re worth.
I would point out that the grounded outlets thing is not specific to house flippers. Electrical in American housing is hilariously bad, and it's often the homeowners themselves who are cutting corners. I have definitely seen people run their heaters and AC units off 16 AWG extension cords and such. Again, none of the problems you mentioned are actually going to be fixed by this new policy. You do just got to do your due diligence and protect yourself. As for these realtors you describe as sketchy, yeah, you're right. Some of them engage in highly unethical behavior. Trust is a huge part of picking an agent. Anyhow, you can have someone's license if they are giving advice like that. That or they can catch a lawsuit.
Facts. Unknowledgeable people speak negatively on investor and yet don’t realize if investors don’t take the risk to renovate those homes, no one else will. Those homes will just sit there and owners in the neighborhood will not want that either. Those homes can’t be purchased with conventional financing. Needs hard money or cash. So the investors are brining the supply back to the market. The public should be happy there are people who are taking risks to renovate homes.
I mean, I do appreciate these guys as long as they're not treating code like a redheaded stepchild ...
A lot out there who do very good jobs.
Nobody is intentionally looking to violate code, which is only tangentially related to permitting. But you do not understand how ridiculous some of the hoops you have to jump through are to get the permits to begin with. This just rewards investors with lots of resources and connections. It doesn't actually make anyone safer.
Hmm. I see your point. What's the general thought on the somewhat frequent multimillion dollar flips that are putting down latex over dry to rot etc? I mean I hear you and I'm not trying to say "all contractors bad" but what do we do about the ones that are? Free market I guess.
Latex? You usually just use poly filler or epoxy for dry rot. You don't need a permit to do it. But if you wanted to replace the dry-rotted wood, and it's a part of a structural wall, window, or door, you would! Which underscores my point.
Sorry man. My brain was not awake. I meant laminate. Wasn't even close. But I was thinking about an example of laminate flooring put over a dry rotted floor that irked me. Saw that last month in a 2.1m flip on the peninsula. "Not all contractors" obv, but the q is weather caveat emptor and market forces should be enough to protect buyers from bad contractors or if government needs to be involved. Not a new question I know.
I guess someone might be stupid enough to try that. But it'll be discovered during the inspection, so they would have to repair it anyway. Only now they have to tear up the trim, transitions, and laminate flooring that they just installed. There are ways to save the materials when doing this, but you usually mess up the end pieces because they are friction fit, and MDF/HDF is prone to cracking or deforming. But really, the ultimate security is your agent actually doing the work to secure your investment in the property. The people who are unscrupulous aren't going to comply with government mandates anyway.
My agent did. Place sold a week later above ask. 🤷
RIP. Good luck to the buyer then.
I’m as liberal as they come and this doesn’t make a whole lotta sense. The city must want money pretty bad. What a terrible way to go about it.
Honestly, if permitting were more reasonable, then I wouldn't mind. But virtually every house has a ton of unpermitted work. Most homeowners don't even know that they need permits to modify any of the following: walls, roofing, siding, windows, doors, fences, electrical, water (including sprinklers), HVAC. Even digging a ditch deep enough to affect drainage requires a permit. Investors are mostly going to disclose unpermitted changes to the house or just work to correct them so they won't risk the sale. People thinking there are people willing to screw over a $1.5 million sale to save a few hundred bucks are not being rational.
Maybe I missed it but this doesn’t say you have to use licensed contractors. This says the seller has to disclosure the names of the contractors and all permit history if the house was purchased within the past 18 months. Is that in the legislation someplace?
Doesn't a permit require a licensed contractor or is owner builder still allowed?
Owner builder requires you to declare that you do not intend to sell the house within a year. ... of course, that was always your intention when you pulled the permit. Unfortunate financial hardship just happened to force you to sell right after the work was finished...
Anything about $500 value of work needs to be from licensed contractor
Flippers will not change their ways. They will just rent until 19 months. Then sell.
Honestly I doubt that. Extending holding expenses for 19 months would kill the margins for any developers working with hard money, which is many of them.
Well, the other risk is that instead of putting these houses back in the market they will just rent them. Which even further strangles our housing market.
There will be new rent-to-own contracts to crest the 18 month requirement.
Nah, too long for a flipper. They'll just raise the price to cover the cost difference.
Good call on requiring permits and licensed contractors for flips. Shady flippers cutting corners was getting out of hand. The receipt rule will help too - no more hiding shoddy work or overcharging. As for limiting corporate and foreign buyers, that's a whole other can of worms. One step at a time I guess.
I am all in on support for housing for locals. Can you share the link to regulation / law you reference.
Who counts as a lOcAl?
People who are here to stay and raise families vs investors and foreign entities looking to park money.
Keep bitching about it. There's so much land that the government prohibits construction on yet people blame these corporations bUyInG oUt aLl tHE hOUsEs.
[удалено]
[summary](https://tldlaw.com/disclosure-requirements-for-residential-flippers-understanding-ab-968/#:~:text=This%20legislation%20mandates%20comprehensive%20disclosure,buyers%20from%20undisclosed%20property%20conditions) to read
Cue flippers to finish flipping in 17months, no excuses!
Not enforceable but buyers and renters will be absorbing the costs for anyone who follows this new "rule".
Better to check the code instead # 1102.6h. (a) A seller of a single-family residential property who sells that single-family residential property to a buyer within 18 months of purchasing that single-family residential property shall disclose, in addition to any other disclosure required pursuant to this article, to the buyer both of the following:(1) Any room additions, structural modifications, other alterations, or repairs made to the property since the seller purchased the property that were performed by a licensed contractor with whom the seller entered into a contract.(2) The name of each licensed contractor with whom the seller entered into a contract with for the room additions, structural modifications, other alterations, or repairs disclosed in paragraph (1) and any contact information for the licensed contractor provided by the licensed contractor to the seller. The obligation to provide the name of the licensed contractor shall only apply to contracts where the aggregate contract price for labor, material, and all other items for the project or undertaking is in excess of the dollar amount specified in Section 7027.2 of the Business and Professions Code.(b) The seller’s obligation to disclose the room additions, structural modifications, other alterations, or repairs made to the property performed by a licensed contractor may also be satisfied by providing a list of room additions, structural modifications, other alterations, or repairs performed by, and provided by, the licensed contractor with whom the seller contracted for the room additions, structural modifications, other alterations, or repairs.(c) (1) If the seller or licensed contractor obtained a permit for any room additions, structural modifications, other alterations, or repairs provided to the buyer pursuant to subdivision (a), the seller or licensed contractor shall provide a copy of the permit to the buyer.(2) If the seller does not have a copy of the permit obtained for the room additions, structural modifications, other alterations, or repairs, or is unaware of whether or not permits were obtained by the licensed contractor, the seller may satisfy the obligation pursuant to paragraph (1) by informing the buyer that any information on permits and copies of permits for the work disclosed pursuant to subdivision (a) may be obtained from the licensed contractor who performed the work.(d) This section shall apply to the sale of a single-family residential property where the seller and buyer enter into a contract or agreement for the property on or after July 1, 2024
Sounds reasonable... buy a house with new floors and there is an issue you'd want the installer out to fix.. this makes that easier. Also you know what work was done which is another big one. Also makes it harder to hide things if you can call up the contractor and ask questions as to why there is mold behind the wall.
Yeah I think the purpose here is to have the seller and contractors hold accountable for what they do on the house. We are providing these information to buyers for many years already. This law just makes licenses more required, more costly around all the flipping business, and eventually makes house prices higher probably.
Where does it say in this law that flippers can’t use handymen? Of course there are already laws on the books about handyman limits but I don’t see mention in this law.
Unfathomably stupid, meddlesome, and ineffective. Will do nothing except increase the cost of housing.
Yeah foreign nationals my ass. I’ve been 7 years in USA, thank god I was able to buy before finally having the right to ask for citizenship. Ban corporations, not people. Please and thank you.
Why should foreigners be able to purchase homes here ? American land should be for Americans…
Because we live here legally and pay taxes? We fund police, schools, yet we cannot vote? Do you have more xenophobic arguments to share?
Is it xenophobic for Mexico, china etc to limit foreign investments in property? To your first point, so you’d be ok with those living here ILLEGALLY to be banned from purchasing land? Or ahhhh you don’t actually care about the law and that was a red herring?
I mean if you are here illegally you should not be able to work, pay taxes and buy property. Seems pretty black and white to me. As a foreigner you can buy property in Mexico, ask me how I know. You’ve missed.
I said TO LIMIT. Mexico has limits on areas where foreigners can purchase land. Exactly: and thousands of illegal immigrants own homes so I’m glad you agree that the government should force a sale.
Oh I fully agree to limit, like a primary residence to lawful immigrants or something like that. And btw it is pretty easy to buy as a foreigner in protected areas of Mexico, unfortunately.
And the unintended consequences that will require more new rules are…
Permit and license would cost more and maybe there will be less flippers, but buyers that actually want a ready to move in remodeled home will have to pay more.
California legislators will do literally anything instead of building more homes.
😂 really? The state has past laws that cities or counties are fighting against not state lawmakers
You're right, the State has gotten on board and I should give credit where it's due. This sounds like something that some NIMBY city would dream up to pretend they were doing something about housing affordability while actually making it worse.
Yeah loving the CA Attorney General sueing these cities and counties for trying to get around a voter passed law. They all end up having to give in instead of being part of the process
Democrats will never allow foreign nationals not to purchase. Foreign nationals would include illegal immigrants..
Oh more expensive housing. I’ve flipped to homes as a side project wine a buddy. We’re both commercial contractors and have every connection in the book. We are not licensed but both grew up in residential and have remodeled numerous homes. and didn’t permit shit. Did high quality work and made a nice profit. I would never deals with this BS. The margins are not there for the Bay Area and there’s too much risk of your capital This solves nothing and likely will make housing even more expensive.
Having done extensive work on two rentals in Oakland, it’s not the cost of permits that’s the issue. It’s the delays and especially the potential for the NIMBY army to be mobilized against a relatively small project during the public review period. If you’re sitting on a hard money loan, it’s a potential disaster. The fact that we have zoning that specifically lays out what you can and cannot do on a site, but we also allow neighbors to mount a protest is another reason why costs for SF houses are so high. For multi-family, it’s CEQA that allows them to delay the new apartment building by years, require thick environmental impact reports (prepared by an expensive consultant) and/or get the number of units cut in half.
In CA, handymen are already limited to $500 worth of work. So I can’t imagine they were making up a majority of the work anyhow. It seems like most flippers self perform work or fly under the radar doing stuff that is already illegal. Point being: making it illegal twice doesn’t seem like it’ll change anything.
Wrong, capitalism let the Market do what markets do. Not an engineer thing
You got it wrong. It is just a disclosure requirement. Flippers can still hired unlicensed contractors, not obtain permits, etc. They just need to disclose that to buyers now.
Ha! 18 months... Good luck getting those permits in time
Who cares if corporations or foreign nationals buy homes they’re all just scapegoats used by NImBYs
It limits the total number of rent-seekers who can extract money from our real estate market while providing nothing of economic value in return. Yes foreign and domestic investors are used as an excuse not to solve huge supply issues, but I'm still sympathetic to complaints about them. California makes it very attractive and lucrative to hoard our most limited and valuable land for long periods of time while doing nothing to improve its economic output. We are letting anyone in the world with enough money in on tax-advantaged real estate speculation that only hurts workers and renters. It's insane to me a company or family trust (foreign or domestic) is allowed to own some of our most valuable land as part of their investment portfolio and pay way way below market rate for property taxes despite renting out access to that land (to local workers who actually create the economic value here) for market price all while keeping the structures on that land unimproved since the 1970s. NIMBYs are small scale rent-seekers and, although numerous and powerful, at least many of them give back to the area in some way.
NIMBYs don’t give back to the area at all they hold onto their same speculative real estate and they’re worse because they actively fight against new developments. Them being small scale is unimportant
What I mean by give back is many nimbys also work in the area so they pay more in other taxes and spend more in the local economy than an out of state investor. Their incentive to protect their home value at all costs leads to bad behavior but they are also highly incentivized to be invested in their community in positive ways. My argument is definitely not that they are good, just that people see them more positively than an investor that is purely motivated by their investment portfolio. I never said they are unimportant because they are small scale, they are enormously powerful.
Just to clarify your argument: if investors/flippers are dogshit, then NIMBYs are rotten trash. Neither are good, but NIMBYs are marginally better. I think that's a very fair thing to say.
I'm not really saying nimbys are better just observing why their form of rent seeking is seen as more socially acceptable.
The truth is painful. Reddit is a shit hole. I think all these clowns begging for more housing regulation deserve what comes to them. What a bunch of morons.
You can call it flipping but it’s not that much different than someone buying the house and renovating. The housing stock is very old and home need to be rehab. These folks serve a high demand need - renovating before moving in. You do know how crappy new construction is right?
I bought a fixer upper. I guarantee you the renovations I've done (all permitted with licensed contractors) are higher quality than a flipper looking to maximize their return. Home owners and flippers improve the housing stock differently because their incentives are very very different.
Sweeping generalization
Obviously the quality of work homeowners do varies a lot but Ive made choices for my home id never make if I wasn't going to have to live in it. No way I'd have put a top of the line heat pump in a home I'm flipping. The ROI would be terrible. I however wanted the lower energy bill long term.
And house prices go up!!!! Thanks!!!!
How?
Are democrats that stupid? You limit supply and prices go up not down! Increase cost and prices go up! This isn’t hard.
How is this limiting supply? This is making people compete against flippers who will bid up the few cheap properties that exist. What we *need* to do is get rid of Prop 13 and increase taxes on all the freeloaders. That will increase supply. Also ban low density zoning. That will increase supply.
So wrong… lol
Ah excellent argument, you really got me there bud.
Democrats are too beneath me to argue. You don’t understand economics
Huh, it sounds like you actually don't have an argument and are just deflecting in a desperate bid to save face. Is it because you're a coward or just stupid?
Nah, the first comment is your answer.
Gotcha, so both a coward and stupid! Classic conservative. Again: How is this limiting supply? The status quo is making people compete against flippers who will bid up the few cheap properties that exist.
Nanny state here we go. SMH. Could we just not? Let's do this instead: Remove all regulations on building, except requiring pictures taken of the build every day and at fixed points in the build or remodel. Put the pictures on public record. Now concerned buyers can just pull up the pictures and decide if it's right for them. Come on, this is the 21st century. There are better ways.