Dealing With The Hazards of Chinese Drywall

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RECOGNITION, REMOVAL AND REMEDIATION

Most homeowners have no clue what Chinese drywall is – in fact, if you looked at it, you can’t even tell that it is different than regular drywall.  The key, however, is knowing what the telltale signs are so that if they do show up, you can be prepared to immediately take steps to resolve the problem. If you’re considering a home with signs of Chinese drywall – run for the hills!  Here are some signs for the cheap but ineffective material as well as next steps.

What You See Is Not What You Get

You can’t recognize Chinese drywall just from looking at it – rather you would have to know what the smell is.  The material emits a very strong sulfur smell that is not only potent but also as much as a hundred times stronger than the regular concentration of any sulfur in building materials.  As the name implies, the material is imported from China and the primary reason it is installed is to save money.

Looking Closely To Confirm – A Quick and Informal Test

You can spend at least a thousand dollars to professionally verify the presence of this toxic material in the property but with a few simple steps you can quite easily determine whether it exists, at no cost at all.

- First, turn your power off through the circuit breaker.
- Second, examine your electrical outlets beneath any plates or covers.  If you see green metallic corrosion, you are seeing signs of Chinese drywall.
- Next, review all air conditioner ducts for the same corrosion, which is from the sulfur.
- Take a look at the copper tubing that is installed with plumbing.  Blackened tubing or black plumbing fixtures is another confirmation.

Dealing With Chinese Drywall Once It’s Been Confirmed

CONFIRMATION IN AN EXISTING HOME

If you live in a home that is showing signs of sulfur corrosion, you suspect you have Chinese drywall and are able to confirm it – then you should contact an attorney. Since this is not something covered by homeowners’ insurance, any financial reparations would likely come through legal channels. There may very well be a lawsuit waiting to happen, through which you may be able to recover funds to manage the problem or recover any punitive damages you may have incurred.

Any repairs or renovations you have had completed may be used in your quest to gain legal ground against this violation of safe living conditions, therefore save all receipts that show you attempted to correct some or all of the problem.

Submit an application with your property appraiser’s office to have it reappraised so the assessment can be changed on it.  If the County decides to reassess the value of the home, it can result in lower taxes.

Unless you decide to move out of the property due to the serious health hazards at stake such as bloody noses and respiratory problems, you will need to completely replace any and all systems that are affected by the defective material.  While this will likely be an expensive endeavor – keep in mind that the value of a property can dip as much as 50% when the presence of Chinese drywall is confirmed.  You will need to replace all electrical fixtures, safety devices such as smoke detectors and get to the heart of any corrosion or surfaces where there may have been exposure to sulfur.  Since nearly every material absorbs sulfur, true remediation lies in the complete systemic replacements.  This means new cabinets, appliances, flooring, plumbing and even wiring.

POSSIBILITY IN A POTENTIAL HOME OR PROPERTY

If you are considering the purchase of a home or property that has Chinese drywall, you can safely do one of two things:  first, walk away from the property, as it is completely inhabitable.  Second, you can opt to purchase the property from an investment standpoint, assuming you will resolve the problem and then resell or live in the home afterward.
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The bottom line is that you can never be too safe.  Now that you know what to look for it is always a good idea to keep your eyes open for signs of this hazard so you can be in control if it happens to be present.

How To Win When There Is More Than One Offer On The Home You Want To Buy

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Are you finding yourself in the position of having to deal with multiple offers being made on the home that you want to buy?  Are there others who want that property just as much as you do and you need to find a way to gain an edge over those other prospective buyers?  With these tips, you will have a much better chance at providing an offer to the seller that they can’t refuse.  It does take being a little flexible, but then if you were not willing to bend a little, someone else will and the keys to “your” home will end up with someone else.

Make An Offer They Can’t Refuse

These days, the lines at mortgage companies are lining up with people wanting to seize the opportunity of the current buyers’ market.  Almost everyone will be financing their new home with either FHA or a straight bank loan – both of which take time and involve signing a lot more papers, and a lot more back and forth.  So right off the bat, if you can offer cash instead of financing – do it.  It does not matter what your source of income will be; whether the cash comes from an equity line of credit, your retirement fund or elsewhere, being able to offer cash will definitely set you apart from other buyers.

It goes without saying that the highest offer would most likely be the one to be accepted.  This does not mean that there aren’t sellers out there who base their decision on factors other than price alone, but the general likelihood of the highest offer being accepted almost always rings true.

Demonstrate A Range of Financial Flexibility

If you can increase the size of your escrow deposit, regardless of whether this is done through installments, it will be a major attraction to the other side.   At a time when most home buyers are pinching for every single penny (even obtaining financing that allows them to put down as little as a few percent deposit), try to go higher to as much as ten percent of the purchase price.

The best time to do this is during the initial period after you have made your offer or right after that 7-10 day inspection period.  Offering this extra flexibility and amount clearly demonstrates your ability and strength to perform under the contract.

Handle The Inspection In Advance To Reduce or Eliminate Contingencies

Be sure to complete your due diligence before you make your offer on the home so you can shave off the extra time (and hassle) of going back and forth over inspection contingencies.  This is one of the best ways to stand alone in a group of potential buyers who have made an offer on the property.  If needing to choose from a simple offer with no stipulations as opposed to one that states that X, Y and Z needs to be addressed prior to closing, it is very likely the seller will choose the simpler of the two.  Not to mention that Asset Managers also prefer property offers with no inspection strings attached.

Be Specific About the Closing Date

This may not sound like a big deal but it can make things more convenient for everyone, including the sellers, listing agent and the lender.  Knowing in advance what your expected closing date is and including it on the offer provides a frame of reference for parties.  Further, it is a requirement on most banks’ application forms that, if not completed, can only add additional waiting time to the entire process.  Just like you, the seller, are likely interested in a quick close, chances are the buyer is also anxious to complete the transaction quickly.  Even though all parties would ideally like a close immediately after an offer is made and accepted, it is simply unrealistic.  So one way to add some points to your corner is to provide a realistic but firm closing date on the contract.

Provide Complete Documentation As Required

This is one area where being organized truly pays off.  If the offer you make is accompanied with all the necessary supporting documentation and/or requirements that may be set forth by either the listing agent or the lender, you are making everyone’s job easier. An example where this will apply is supplying proof of your right to enter a contract if you are acting on behalf of a partnership or corporate entity.  For sellers and agents anxious to sell the property to be presented with a complete package of everything they require versus an incomplete one, the choice is an easier one to make.
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Remember that there is only so much you can do, but as long as you do whatever it is that you DO have control over, if the house is meant to be yours there is a good chance you will get it.  Be prepared for a rejection to your offer so that if it does happen, at least you are not so emotionally vested in the would-be property that it hinders your ability to move on and seek another, better one afterwards.