Q: We just made an offer on a house that was accepted without a counteroffer. The house was nicely remodeled and appeared to meet all our expectations. However, we were stunned upon receiving the seller’s home inspection report as it reads like it was done on a different house. There are dozens of items -mostly in the attic, crawl space, garage and about the grounds – that need to be corrected. The agents involved act as if it’s a like-new house regardless of flaws and that we are lucky to be the successful bidder. Our demands for a price reduction are not going over well. Now what?

A: Welcome to “How not to sell a house.” Seller reports and, one would hope, any needed repairs should be posted online prior to potential buyers touring a property, let alone making an offer. All too often sellers and/or their listing agent rush a home to market without disclosures, or worse, they state, “inspections to follow.” That is asking for fewer offers, less desirable terms and, frequently, built-in renegotiations.

In your case, most preprinted contracts allow for a mechanism where buyers are allowed to ask for property defects to be corrected. This list needs to be initiated during the investigation phase of the contract. The seller is allowed so many days to respond and then the burden is back on you to either cancel the sale or move forward. Issuing a repair list on a fully disclosed or lender-controlled property is deemed undeserved.

3-6-10

Send questions to kapowich@mac.com

Q: Over a 10-day period we received three offers on the property we are selling. However, each time the buyers and their agent mysteriously disappeared after our counteroffer. This seems unprofessional. What part of “negotiating” don’t these people understand?

A: Oh, many parts that comprise a whole lot of what sellers don’t want to hear. Perhaps they don’t understand why you still have a sign on your lawn. Or why your counteroffer appears to be the opposite of negotiating in good faith. Maybe it’s your listing agent’s attitude, which accompanied your counteroffers to these purchase offers. Since actions speak louder than words, your written response somehow prompted three groups to leave the negotiation table – not scoot up to it.

Any seller and listing agent who receive three offers and are unable to create a dialog – let alone ratify a sale – have only themselves to blame. Sure, there are exceptions to industry rules, but not here. It’s 2010; low-balling offers tend to be at the beginning of a slowdown, not in the recovery stage or in the colder months when inventory is at its lowest. Plus, your attitude that it must be unprofessionalism only that is hindering your move speaks volumes.

It’s time for you and your listing agent to have a serious sit-down. Review each offer carefully. What were the buyers offering in prices, terms and conditions? Conversely, what was the common theme of your opposition to these proposals? It’s even more important to reassess how well each party and their subsequent offer were handled before they were sent packing.The seller is a layperson who can reap benefits when following simple rules, even when surrounded by inept agents. Make sure your home is presentable, marketable and the occupants friendly at all times. Don’t forget that off-putting listing agents kill more sales than do pet odors.

Meet face-to-face with your listing agent to review all offers. If the buyer’s agent is not savvy enough to make a live presentation of his or her client’s offer, then put him or her on the speaker phone. Only then will you begin the art of negotiating.

It’s time to stop hiding behind the curtain. You’re not the Wizard of Oz, you’re really the boss, so act like it.

3-6-10

Send questions to pat@siliconvalleybroker.com.

Q: We are selling our townhouse and the buyer’s pest inspector found damage to the exterior of our home to the tune of $4,300. Evidently, our homeowners’ association does not cover repairs for drywood termites and/or dry rot. To make matters worse, our agent informed us that we have to pay for the pest abatement and the repairs because it’s “in the contract.” We feel our agent should have made us more aware of these items; she disagrees. After these surprises, we’d prefer to go in a different direction and cancel the contract. Everyone tells us to just cancel the sale and move on. What are our options?

A: First, it’s amazing how many sellers and their representatives are surprised to find out their homeowners’ association does not take care of certain exterior repairs to the building or their decorative balconies. Second, it never ceases to amaze me how many agents are speechless when they discover that the contract specified section 1 pest repairs. One reason they are silent is that they are contemplating how to inform their sellers of this “new” development. You can bet those sellers were silent, too – up until they threatened to cancel the sale and/or refused to provide the repairs in question. Unfortunately, they often learn that the buyers have already fulfilled their part of the transaction at every step – severely weakening the chances of a unilateral seller’s cancellation.

People don’t realize it’s not just a sale, it’s a contract. And the only person qualified to help a seller cancel a contract properly is a real estate attorney. He or she will provide the advisability, and detail the expenses that will be incurred by rescinding the contract based on the seller’s set of facts.Consumers have a duty to protect themselves, especially when signing a contract. Yet most sellers, buyers and their reps expend more attention on the purchase of a car than they do the marketing and sale of their home.

10-4-08

Send questions to pat@siliconvalleybroker.com.

Q: We have sold our home to a young couple who keep requesting visits for everything under the sun: room measurements, vendors, showing friends and family, etc. Our listing agent told the buyer’s agent that since their inspections and contingencies have successfully passed, any more access to our home would be an inconvenience. According to our agent, that announcement is unacceptable to the buyers. We have to move in two weeks and do not want any more interruptions. At what point can we as sellers close our doors to outsiders and get about the business of moving?

A: When you are unpacking your belongings at your new home, that’s when. Selling your home is an inconvenience. Having a sale fall apart because of perceived seller slights is a tragedy. Sellers can have a beautiful transaction in progress and the smallest thing can and will create real or imagined problems with unpleasant ramifications. That can include renegotiating or canceling the sale outright. And homes that go back on the market after a sale fails are rightly or wrongly stigmatized. Closing your doors to a buyer and her/his friends, family and vendors will only produce ill feelings toward the seller, the transaction and even the property.

Buyers and sellers are at an anxious time in their lives and bilateral goodwill is critical to demonstrate at every opportunity. Buyers tend not to file claims against people they like and/or purchases they feel good about.

The solution is this: Simply limit the number of these buyer visits, and make sure one or both agents involved in the transaction is or are present. It should be explained to the buyers that because the process of moving has begun, the home is no longer in showroom condition. Do yourself another favor and go one step further: Be present and helpful at a buyer walk-through. You’ll be finishing the sale the same way it started in good faith.

12-5-09

E-mail questions to Pat at
pat@siliconvalleybroker.com

Q: I thought buyers paid for inspections, why does my listing agent
keep insisting on us paying for seller inspections?

A: Your astute agent knows your home will sell better and faster with
a full disclose package, which includes inspections. Moreover, pre-sale
inspections also tend to keep a seller out of legal disputes.

3-1-08

Do you have a question for the new real estate Q&A Market Wise column in the SJMN? If so, please email them to: pat@SiliconValleyBroker.com

Q: We are trying to view homes when they have an open house. However, in many cases the real estate agent insists that we sign a guest book, often referring us to a note stating the seller requires visitors to provide personal information. Why would a seller make such a demand?

A: It is ironic that consumers are insulted at the front door of an “open house”. The seller hired an agency to market and advertise their home in order to sell their property, not build the clientele of a licensee of that firm. If a seller knew that the “host” was using her or his home’s open house to gather new client leads, she or he would feel swindled. The licensees were hired to promote the sale of the property, not themselves.

Market Wise Column
Saturday, June 21, 2008

Do you have a question for the new real estate Q&A Market Wise column in the SJMN? If so, please email them to: pat@SiliconValleyBroker.com

Q: We have a foreclosure on our street, which has become a blight in this once quaint neighborhood. Needless to say, the agents handling this property are unresponsive and uncooperative. My husband is handling the 4-foot weeds and even picked up nine weekly newspapers from the front lawn. Why is he weeding the front yard of this eyesore? What can be done at this point?

A: The actions on the back end of this housing meltdown should be a cure, not tons of salt in the wound. Banks have actively decided that skeleton crews should handle the avalanche of negotiations they knew were and are coming down the pike. Incredibly, these overworked loss mitigators have chosen fewer than a third of 1 percent of the nation’s Realtors to handle these distressed properties as listing agents. These overwhelmed agents are unable or unwilling to hold open houses or even return phone calls. Because of the agents’ burden to pay the expense of these properties, many bank-appointed listing agents will forgo the rental of a sign post.

To think that bank lobbyists spent years seeking to enter the real estate brokerage business is scary. Now, in a time of crisis of their own making, the banks’ supervision of “liquidating toxic assets” from their books is staggering in its ineptitude. Not just neighbors like you, but politicians, bankers and taxpayers have no idea of the financial disasters happening behind the scenes. The extremely small contingent of loss-mitigators and their listing agents let both offers and properties languish. Their response is recurring price reductions often in the tens of thousands. This unnecessary economic damage to our neighborhoods and economy is unforgivable.

If only the lenders would hand the million sidelined Realtors a listing or two a month, then you would see traditional servicing in spades. The wide-reaching results would not only be visual, but immediate and game changing.

Market Wise column
Saturday, April 4, 2009

Pat Kapowich, SiliconValleyBroker.com, owns Kapowich Real Estate in Sunnyvale. Send questions to pat@siliconvalleybroker.com.

Q: We were recently involved in a multiple-offer situation. The seller’s agent collected six bids at the 5 p.m. deadline on Tuesday. This agent presented the offers to the seller on Wednesday. We were then granted a multiple-counter offer, along with the other three top offers. Clearly, the other buyers had already gone above the list price and this was a squeeze to get the seller a second round of bidding. This seems like a real questionable area of real estate. Besides, how could a seller’s agent present an offer better than the buyer’s broker who created it?

A: They can’t. This is usually a control issue that listing agents accept as a Standard of Care. Granted, some sellers are elderly or too ill to withstand in-person presentations. However, real estate attorneys find is hard to believe that listing agents promote the idea of not meeting every buyer’s agent in person, and especially avoiding including sellers in live presentations. After all, it’s the sellers who will be entering into a legally binding contract with the buyer. Having sellers miss in person-presentations and negotiations prior to signing a buyer’s offer is, according to one prominent real estate attorney, just plain silly.

8-1-09

Pat Kapowich, SiliconValleyBroker.com, owns Kapowich Real Estate in Cupertino. Send questions to pat@siliconvalleybroker.com

Q: We are thinking about making an offer on a property, The seller’s agent is
insisting we make the offer through him because we attended his open
house. Can he do that? We are not comfortable with using the same agent.
Will we lose out on the home if we hire our own broker?

A: Don’t worry, I’m sure the agent would be glad to see an offer presented to
his sellers, no matter who is handling the buyer. You are wise to seek
your own professional. Dual-agency exists anytime the same real estate
brokerage firm is representing both the buyer and the seller. Unfortunately,
while the licensee is acting in such a transaction might be striving for twice
the compensation, done correctly, dual-agency is three times the work, four
time the responsibility, and five times the liability.

These transactions can easily produce a regretful seller, or, more likely, a
remorseful buyer. There is nothing more foolhardy than a seller promoting a
dual-agency situation, hoping to save commission dollars. Most brokers
don’t know the ins and outs of properly operating as a dual-agent. Keep in
mind, too that unhappy buyers are apt to file claims, which usually include
naming their agent. It’s problematic (expensive) when it’s the seller’s agent who
purportedly failed the buyer.

3-1-08

Do you have any questions for the new real estate Q&A Market Wise column in the SJMN? If so, please email them to: info@SiliconValleyBroker.com

Q: We are selling our house and the buyer’s home inspector is recommending further inspection of the sub-area by an appropriate professional. We don’t feel this is warranted, as our pre-sale inspection noted basically the same observations and comments. Should we grant an extension to the buyer for the inspection of the foundation of a 48-year-old house in the suburbs? It’s an as-is sale.

A: Location, location, location? Consumers especially sellers, should follow this rule: Disclose. Inspect. Disclose. Buyers file the majority of lawsuits, many of which are often referred to as Bad House Cases. What sellers feel e.g., basically the same observation is moot. Until buyers are completely satisfied inspecting a home (often to the dismay of the agents involved), a seller should not sell them their house.

Foundations are the most neglected area of residential sales. Sub-areas should be inspected and maintained every seven years. This is news to the real estate community and consumers alike. But consider: downspouts and sprinklers annually dump gallons of water against the house. Insist on a foundation inspection report, plus an estimated cost of renovations that shall be delivered to all parties. Only then let the buyer proceed with the sale, or, conversely, let the buyer cancel the transaction. Either way, you’ll greatly reduce the likelihood of interviewing real estate attorneys

7-18-08

by Pat Kapowich SiliconValleyBroker.com, owns Kapowich
Real Estate in Sunnyvale. E-mail questions to him at
pat@siliconvalleybroker.com