Andrew Wetzel's Musings

March 25, 2019

Municipal Inspections

Filed under: Buying,Inspections and Contingencies,Marketing,Selling — awetzel @ 3:59 PM

A Real Estate sale is a negotiation between a buyer and a seller.  While either may be more knowledgeable or have better representation than the other, it is a “one-to-one” exchange and most are what we call “arm’s length” meaning that neither party is under duress or pressure.  A seller puts their property on the market and prices it however they see fit.  A buyer can make an offer based on how much they like it and want to own it.  If the sale is financed, an appraiser will compare the selling price and terms to the market.

There are various steps that may occur between executing a purchase agreement and getting to settlement.  One of them is a resale or “use and occupancy” inspection that is required by many municipalities regardless of the details of the agreement.  Who pays for the inspection and any subsequent repairs, if any, is subject to negotiation but a clear certification or a “conditional” one may be required to settle.

The municipal inspection allows the municipality to collect a fee for inspecting the property.  Many require an additional fee should a reinspection be needed.  These inspections generate revenue.  Beyond that, what is the point of their poking their nose into an otherwise private transaction?  They will tell you that it is to make sure that there are no safety issues which would be understandable if they only inspected “public” areas like sidewalks, curbs and anything that could cause harm to the general public.  I think that reasonable although the obvious flaw in that logic is that this intrusive process only encompasses those properties being sold, whether they settle or not, ignoring the majority of properties that do not change ownership.  What happens if they have broken sidewalks or curbs?  People who sell their property are essentially being penalized.

My concern is that many municipalities go beyond what seems appropriate, choosing to enter the structure and dictate what has to be done in order for the transfer of ownership to be allowed.  I had one inspector require a Living Room wall to be completely re-painted because someone had drawn a line on the wall with a magic marker.  Regardless of whether the purchase agreement has any inspection contingencies or not, regardless of how much the buyer is paying the seller to complete the sale and regardless of the competence of the principals and anyone else involved, many municipalities think it their business to inject themselves into a private transaction, some to the point of being as onerous as an actual property inspection.  I consider this meddling and an example of over-reach.  It also fails to achieve a realistic goal as many houses do not change hands for many years so they are not inspected regardless of their condition.  Look at how many people perish annually because properties lack working smoke detectors?  I am not saying that this is the fault of the municipality but wonder why they don’t visit every property regularly if safety is their priority?

I do believe that rental inspections make sense as, unfortunately, there are many landlords who do not properly maintain their properties and many rentals occur without the benefit of a licensed Real Estate professional.  I do find it interesting that many sale inspections are more intrusive than rental inspections which makes no sense to me.  I think that tenants deserve more protection than many of these inspections afford them.  At the very least, both inspections should be similar.

Over the course of my career, I have heard many horror stories about municipalities requiring repairs that were costly, made no sense and were in fact not wanted by the buyer or seller.  They have even caused consenting adults to delay settlement.  Fortunately, the Real Estate community in PA pushed back and was able to have the law changed so that people could complete a Real Estate sale even if repairs were not completed.

Houses should be priced and are typically sold based on their condition.  The PA agreement of sale has a section devoted to the municipal inspection.  The seller does have the option to require that the buyer be responsible for ordering the certification and/ or paying for repairs.  Unfortunately, many houses are marketed with that stipulation without providing an actual list of what the buyer is expected to do which makes no sense.  Have the inspection and provide the list so buyers are not surprised later.  Many buyers simply cannot tackle the cost of these repairs as they have enough trouble saving for paying their closing costs.

It does seem that lower income areas are more heavily burdened by municipal inspection requirements which makes some sense as some of those owners may not be financially able to maintain their properties over time.  In that case, a sale offers an opportunity to make changes which could benefit buyers.  However, an owner who has completed municipal repairs only to learn that a buyer could not get financing has two problems:  they owe contractors money and they have no sale.

The ideal situation as far as I see it would be to hold all property owners to some standard in order to protect the public.  If this could work, there would be no municipal surprise when a property is sold.

There is no time for inexperience, empty promises or false expectations!

 Remember:  HIRE WISELY!  We are not all the same!


March 23, 2019

The Courtesies of Showing Properties to Clients

Filed under: Buying,Ethics — awetzel @ 4:57 PM

The preamble of the REALTOR Code of Ethics states that REALTORS “are zealous to maintain and improve the standards of their calling and share with their fellow REALTORS a common responsibility for its integrity and honor….  They identify and take steps, through enforcement of this Code of Ethics…, to eliminate practices which may damage the public or which might discredit or bring dishonor to the real estate profession”.

Our most basic purpose is to bring sellers and buyers together.  We are matchmakers.  Typically the formal process starts with showing a prospective buyer properties that interest them.  Most showings require scheduling and confirming a specific appointment before entering a property.  Whether occupied or not, regardless of the type of property or its usage, someone owns it and our profession requires that we respect the private ownership of Real Estate.

The concept of showing properties should be simple:  a listing agent shares the instructions for accessing the property, a buyer learns about a property and expresses interest in seeing inside to see if it matches their wants and needs, they meet an agent for the tour and evaluate what they saw compared to other possibilities.

While a listing agent and seller have no idea whether a buyer is serious about buying or can even qualify to offer the seller what they want or need to complete a sale, the minimum expectation should be that the agent and buyer show up within the scheduled time frame, that the property be entered in accordance with the seller and listing agent’s instructions, that the people respect the ownership of the property as well as any personal property inside it and that, when they leave, they leave the house as they found it which typically means that they turn off the lights and lock the doors.  Unfortunately, some of this seems difficult for some agents and buyers.

For whatever reason, one of the constants in listing Real Estate for sale is that some agents either fail to show up within their scheduled time frame or they do not come at all.  There are going to be times when showings run longer than planned which may affect arriving on time for the remainder of the scheduled tour or when there are problems with traffic.  The remedy is to call to see if it is possible to change the scheduled time so that the seller knows what is going on.  It is not acceptable to just assume that you can enter someone’s property whenever you get there.  The owner may have thought you were not coming and was not prepared to welcome you at your convenience.

The larger issue is when an agent and buyer do not show up at all.  It should be assumed that a courtesy call will be placed to advise the seller that the showing has been canceled.  The showing may or may not be rescheduled but, at the very least, the seller should be told if you are not coming as scheduled that day.

Common sense dictates that selling Real Estate is going to be quite different from simply living in it.  Showings are not always convenient no matter how much a seller wants or needs to sell, even if the property is vacant.  Sellers do not know whether they are having their time wasted but they generally endure even if it means delaying a meal, changing their plans or doing something that accommodates someone they do not know.  Inconvenience is one thing, it is expected, but failing to show up for an appointment without canceling is rude, unprofessional and shows a lack of courtesy and respect for others and their property.  Again, there may be a perfectly valid reason but this happens too often and most agents will never call to apologize or explain what happened.  This reflects badly on our profession and causes some members of the public to think poorly of us.  We are collectively responsible for upholding the image of our profession and any individual can damage it.

I take the time to explain to my clients what can happen with showings.  It is part of my role but I find it embarrassing to need to do that and too many of my clients know all too well why I have to do this.

There is no time for inexperience, empty promises or false expectations!

Remember:  HIRE WISELY!  We are not all the same!

Buyer Regrets: Hopefully Too Few to Mention

Filed under: Buying,Ethics,Hiring an agent — awetzel @ 4:42 PM

Many buyers express regrets after moving into their next home.  Some feel the need to resell it which can cost thousands of dollars in closing costs not to mention the possibility of their selling it for less than they paid.  Others will remain in the house and deal with whatever regrets they have.  Over the years many sellers have told me that they should not have bought their house.

This is worse than “buyer remorse” which may cause a buyer to terminate an agreement before taking possession.  That still may have a serious cost attached to it especially if the buyer defaults on a purchase agreement.  Either way, I respectfully suggest that many if not most buyer regrets are the direct result of buyers choosing to conduct a search “their way” instead of following a tried and true plan.  Many buyers wait to hire an agent so they are left to fend for themselves.  Competition may also lead to a hasty purchase decision.  The 24/7 availability of information gives many buyers a comfortable feeling about the process.  However, they are, at best, receiving a lot of conflicting, incomplete or false information rather than using REAL knowledge.

When I meet a buyer I ask that they do two things:  get financially pre-qualified so that they know their situation and comfort level AND determine their “wants” and “needs” so that we can begin to focus on identifying locations, prices and features for them to consider.  Once they start to embrace those two foundations, we can really begin to put together a list of properties for them to consider.  Unfortunately, many buyers get distracted by the lure of seeing houses which may lead to their finding one they think they like without their being prepared to pursue it or knowing if it is really THE BEST ONE available for them.

So, what is my plan?  I use their information to do an initial MLS search.  The criteria I use will likely evolve but we have to start somewhere.  Of course I fully expect my clients to search online as they consider different options as well as to attend open houses and do anything else that they think they need to do as long as I know the best criteria to search.  We are a team and need to have the same goal.

If my search yields dozens of houses, I suggest they narrow their focus.  If I only identify a handful they should likely expand their options.  My typical buyer makes a purchase decision after actually viewing 10-12 houses.  Trust me, after awhile they start to blend together!  Many buyers forget what they saw by the time a house tour ends so I try to limit a tour to 5 or 6 houses but that depends on what they want and their circumstances.  Buyer agents who do relocation probably wish it were that easy.  I have shown 17 or 18 houses during a tour and that generally makes no sense for most of us even if they are tightly clustered.

After identifying the initial “list” of properties, I email them to my clients and ask them to look at them and then drive by all of them so that they can prioritize them.  This not a perfect situation as the MLS may be incomplete as far as pictures and descriptions so a buyer may not really be sure they will like the house.  If they wait for the agent to complete the MLS information it may be too late to get in let alone to make an offer.  Even though a specific listing may not appeal to them, driving into and through neighborhoods may help a buyer evaluate whether they like those areas or not especially if they are not familiar with an area they have chosen to consider.  They may think they know an area really well but probably have not traveled on every street.  Buyers may also find areas they had not considered.

The goal is twofold:  finalize the list of wants and needs to help me continue to identify new possibilities as they come on the market and to start the process of looking inside.  For example, if a buyer narrows a list to 10 properties and we see the best 5, they are more likely to feel comfortable making an offer if a specific house really stands out.  If a buyer starts to haphazardly look at random houses with different agents they may find one they like but fear making an offer because something better may be available.  The buyer is the boss and gets to decide what to do; my role is to advise.  The process of getting to settlement may have its ups and downs and the stronger a buyer is committed to owning a specific house, the more likely they are to work through any issues that arise such as with any inspections rather than wishing they had spent more time looking at houses.

Most of my buyers remain in their homes for many years.  I look at a house as something you “grow into” rather than “out of”.  My focus is their long-term happiness rather than hoping they will buy and sell frequently!

There is no time for inexperience, empty promises or false expectations!

Remember:  HIRE WISELY!  We are not all the same!

Compensation in Real Estate

Filed under: Buying,Ethics,Hiring an agent,Marketing,Price,Selling — awetzel @ 4:31 PM

While there are many different business models as far as how sellers and buyers compensate their Real Estate representatives, the one that seems to remain the most popular is based on closing a sale meaning that the agents work on full commission.  Typically the seller pays the listing broker a fee due at settlement and that broker offers a portion of their fee to buyer agents as an incentive for them to show their listings.

Anyone working on a full commission-basis has to constantly focus on finding new clients if they want to continue to generate income.  While most agents will have opportunities to work with friends and family as well as people referred to them, we also need to identify prospects from people we do not already know.  The point I want to stress is that Real Estate agents, and perhaps anyone who works on full commission, have two commodities to trade for the opportunity to earn a commission.  One is our time, meaning that any time we devote to developing leads and working with prospects, customers and clients has to be invested wisely as the amount of time we have is finite.  Time management is one of many topics we have to master.  How much is our time worth?  Can we differentiate between important tasks and urgent ones?  How is our time best spent?  Some agents have a better handle on this than others.  One of our challenges is to evaluate which clients to accept based on the likely outcome of our working for them.  It boils down to probability:  am I likely to sell a client’s house or is a buyer likely to buy a house?  Of course nothing is guaranteed and we all will spend some time for which we know we will not be compensated.

The other commodity we have to trade is the combination of our skills, knowledge and ability.  Our actual experience is only one part of this as some of us spend a lot of time, money and effort to learn more so that we are better prepared for the unexpected.  While some clients may be more self-sufficient than others, perhaps minimizing what we do for them, others are much less so and will need more time from us as we advise and counsel them.

One of the basic facts of Real Estate is that commissions are negotiable.  In fact, when a group of agents get together we are NOT allowed to discuss commission as doing so may be perceived as collusion.  Offices and companies set their rates or fees, we try to avoid the word “commission”, and may or may not allow their agents the flexibility to charge what they can or need to in order to acquire clients.  There is more to our fees than simply comparing one company to another.

I have heard since my first day in business that our fees were under assault.  Different business models have done a variety of things to capture market share and, frankly, many focusing on low fees have not survived.  Some consumers do not value our services as highly as others, reducing our role to preparing documents and unlocking doors while others demand a lot of our time, seemingly expecting to learn everything we know regardless of whether or not their situation requires it.  I do know that when the market went crazy, some sellers thought our job easier so they wanted to pay less.  Of course, I never had a seller offer more when it took longer to find a buyer for their house.  Conversely, no buyer ever offered me more even though it took writing and negotiating several offers to get them a house.  I often joke that when I look at my commission check I either think I was overpaid or that it was not nearly enough!

The word commission is an interesting one as is the concept of only getting paid when a house is sold regardless of how much time and effort we have invested or whether or not the seller and buyer were really motivated to get it done.  Many sales fall through when a buyer cannot get a loan or when the two parties cannot agree as to how to address a home inspection list.  Even if the sale falls through during or just prior to settlement, there is no payday.  That is part of what we accept.

Our commission is a marketing expense.  I understand that buyers and sellers prefer to pay less rather than more.  From the buyer’s perspective, the seller typically pays the buyer’s agent although the fee comes from the funds offered by the buyer.  From the seller’s perspective, the less they pay, the more they walk away with.

What is the reality?  Some sellers will settle on an agent solely based on the fee they charge.  You do generally get what you pay for and if an agent is willing to accept less than their competition, perhaps they are not as capable of earning the trust of prospective clients.  Sellers might want to question the negotiating skills of an agent who accepts what the seller wants to offer:  how hard will they negotiate the selling price?

In addition, sellers need to understand their competition.  Part of the fee charged by the listing broker will be used as an incentive for buyer agents to want to show and sell the listing agent’s property.  The portion offered is determined by the agent and the seller but if it is not competitive with other listings a buyer agent might show their client, the seller could see their house sit on the market longer than it should.  Houses with a high “days on the market” can become stigmatized, meaning that buyers and their agents wonder why someone has not bought it.  Even worse, houses that go under contract and then come back on the market may be thought to have repair issues.

More to the point, assuming that a buyer has “hired” an exclusive agent to represent their best interests, the buyer and their agent likely agreed to a fee owed to the agent at settlement.  If the contract allows the agent to accept compensation from the listing agent, it may well include a provision that the buyer has to make up any difference between what they agreed to pay their agent and what the listing broker is offering.  Why would a buyer pay “fair market value” for a house and still be willing to pay a portion of their agent’s fee?  Of course, if the agent does not have a formal contract with their buyer, this may not apply.

One of the many possibilities in today’s market is for the seller to agree to pay their listing agent but to expect the buyer to compensate their own agent.  Sounds simple and fair, doesn’t it?  However, our local MLS requires listing brokers using the MLS to advertise, expose and promote their property listings to offer some compensation to buyer’s agents who successfully “procure” a buyer for their listing.  The answer for some is to keep their listings off the MLS.  These are called “office exclusives”.  When used, it is important that the listing agent respond to inquiries even though they will be offering no compensation.  I doubt that any seller, even those not willing to compensate a buyer’s agent, would expect their listing agent to prevent agents from other companies from showing their property to their buyer-clients.

When I talk to prospective seller clients I need to gather information.  Prior to our actually meeting, I need to learn what I can so that I can prepare a market analysis for the house so that I have some idea about the possible range of asking and selling prices.  At our meeting I need to walk through the house to see how it compares to others on the market, under contract or recently sold so that I can better assess its marketability and pricing.  In addition, I need to discuss the seller’s motivation, is it more based on the price achieved or the length of time it takes to sell?, their expectations as far as asking and selling prices and, whether we can work together.  There is a lot more to taking a listing than signing paperwork.  I need to make sure that my clients understand the market, the process, the paperwork and how I do what I do.  A significant part of this is explaining the commission and how it works:  is it more than a “line item expense”.  Do they understand the need to compete with other available listings, do they value what we do and do they value my time?  They may simply want to know a price so that they can try to sell it themselves without spending anything on commission.

As I hope I have explained, there is much more to selling Real Estate than deciding how much commission you want to spend.  The fee is a marketing expense and studies over the years have shown that houses offering lower commissions to buyer agents tend to take longer to sell.  While we all want to save money, there is nothing wrong with that, signing a listing contract based on a low commission may not work.  I have seen the same result time and again:  a low commission is offered to buyer agents, the houses may get shown but not sold and the listing agent asks for a price reduction which more than likely offsets any perceived commission savings.  While the new price may appear attractive, the commission has not changed so the house may continue to sit unsold.

There is no time for inexperience, empty promises or false expectations!

Remember:  HIRE WISELY!  We are not all the same!

Cooperation in Real Estate

Filed under: Buying,Ethics,Marketing,Selling — awetzel @ 3:45 PM

Real Estate, like many professions, has its own vocabulary.  In addition to using many acronyms, Real Estate uses what appears to be common words that really mean more than they imply.  One such word is “cooperation” which generally means “the process of working together to the same end”.  While largely true in Real Estate, a profession which is based on bringing sellers and buyers together, there is more to it than that simple statement.

Cooperation among competing professionals in any line of work is unique and competition is at the heart of the Real Estate community.  We compete for and on behalf of buyer and seller clients and then cooperate to match them with each other, with each party typically having their own exclusive representative.  While the “end” result may appear similar, meaning that both parties have to agree to transfer ownership of a property, there is much that happens along the way.  This is NOT a “retail transaction” where funds and goods are swapped instantaneously.  Cooperation embodies the relationships among agents and our rules define the requirements.

REALTORS have a Code of Ethics consisting of 17 Articles.  Our Code of Ethics is built on the principal of protecting the public and advancing the interests of home buyers and home sellers.  Cooperation is so important and intrinsic to what we do that it has its own Article and it is number 3.  It begins with the statement “REALTORS shall cooperate with other brokers except when cooperation is not in the client’s best interest.”  The client is the boss and gets to make or not make the critical decisions and we owe our clients 6 “fiduciary duties”.  One of them is “obedience”, meaning that we have to obey their lawful instructions.  There are times when clients will not want us to cooperate with each other but that does not relieve us of the obligation to act ethically and professionally.  For example, we need to respond to inquiries even if to advise the person inquiring that we are not “cooperating”.

Article 3 has ten “Standards of Practice” (or SOP) which interpret the Article.  Standard of Practice 3-10 defines cooperation.  It says “The duty to cooperate relates to the obligation to share information on listed property, and to make property available to other brokers for showing to prospective purchasers/tenants when it is in the best interests of sellers/landlords.”   That means that listing brokers will make their property listings and information about them, such as property disclosure and lead hazard statements, available to other brokers.  The goal of course is to identify prospective purchasers or tenants.  Accordingly, the default position for REALTORS is cooperation.  Sharing listings and listing information benefits the consumer.  Sharing increases “exposure” which should theoretically result in maximizing the selling price while minimizing the marketing time.  There are many variables that can affect either of those but no one can doubt the potential benefits to consumers.

Article 3 also discusses respecting the private ownership rights of the seller.  SOP 3-9 says “REALTORS shall not provide access to listed property on terms other than those established by the owner or the listing broker.”   This means that a broker must have permission to enter or to allow others to enter a property which includes how to schedule showing appointments and inspections, arriving when scheduled, managing delays in arriving on time and canceling showings when necessary in addition to who must be present for appointments and showings.  It is safe to assume that an agent is expected to accompany all showing and appointments.

The Code of Ethics was created in 1913 and has been amended over the years.  The greatest changes to it have been those related to technology and the law.  For example, since 1913 we have seen the inventions of fax machines, email, texting, scanning, electronic signatures and the Internet, all of which changed how we do business.  Exclusive buyer agency and the multiple listing service have also dramatically changed our profession:  allowing each party to be exclusively represented and making marketing so much easier than before.  That being said, the competitive nature of the profession will always cause issues and misperceptions about our conduct.  Are we working for our client’s best interests or our own?  That question often arises when an agent is dissatisfied with something that has prevented them from getting what they or their client want.  While it is a good question, we need to ensure that we are not jumping to conclusions that are wrong and we need to make sure that we have done all we can to resolve any discord that arises.

Not surprisingly, the perceived lack of cooperation can be very frustrating.  We are expected to share information and to be honest with each other.  The primary focus of this involves making properties accessible and disclosing when a property is under contract.  Few things in Real Estate are more frustrating than having a buyer interested in a property for which we have no information and are unable to get the information that our buyers need to decide whether to request an appointment or not.

“Coming Soon” listings generate much of that frustration as many agents point to a lack of cooperation when simply trying to get the information their clients want, need and expect.  The practice itself is perfectly legal and acceptable if handled according to our rules and regulations.  Cooperation, at the very least, may simply mean that we return a call, an email or a text when a fellow agent inquires about one of our listings.  If the listing is an “exclusive” one, meaning that the seller has agreed that you will not compensate other agents for bringing a buyer to them, that must and should be communicated so that the inquiring agent can advise their client and plan accordingly.  When communication is lacking, it is too easy to assume something is wrong.

One of the great lines in literature is “no man is an island”.  As REALTORS, we are independent contractors in business for ourselves.  However, through our network of associations and our Code of Ethics, we are not in business by ourselves.  Cooperation is what makes our profession work best and, aside from the issue of ethics, failing to cooperate, even if that means telling a fellow agent something they do not want to hear, is unprofessional, short-sighted and reflects poorly on the profession.  We are judged by the company we keep.

There is no time for inexperience, empty promises or false expectations!

 Remember:  HIRE WISELY!  We are not all the same!

March 22, 2019

Dual Agency: The Pros and Cons

Filed under: Buying,Ethics,Hiring an agent,Price,Selling — awetzel @ 5:52 PM

Let me start with some background and definitions.  Of course you know that this is not legal advice!

According to RELRA, the Real Estate Licensing and Registration Act of 1980, Chapter 2, the word “agency” is defined as a relationship whereby the broker or licensees in the employ of the broker act as fiduciaries for a consumer of real estate services by the express authority of the consumer of real estate services.  The legal definition of agency from is “a consensual fiduciary relationship in which one party acts on behalf of and under the control of another in dealing with third parties; the power of one in such a relationship to act on behalf of another.”  Dual of course means two.

In the NAR Code of Ethics and Standards of Practice, Article 1 requires that REALTORS “protect and promote the interests of their client” and says that this obligation is primary.  Further, we have 6 fiduciary duties owed to clients, meaning people with whom we have a formal representation contract.  Briefly, the six are obedience, which requires that we obey their lawful instructions, our giving them our undivided loyalty, our disclosing all information concerning the transaction that might affect their decisions, our not revealing their confidential information, our accounting for monies involved in a transaction and using reasonable care and due diligence to protect them from foreseeable risks or harm.  In most Real Estate transactions each party has their own exclusive agent making these responsibilities easier to understand although conflicts will still arise.

According to the PA Consumer Notice and RELRA, Chapter 2, “dual agency” is defined as occurring when an agent represents both the buyer and seller in the same transaction.  In Chapter 6, Duties of Licensees, Section 606d, it states that a licensee may only act as a “dual agent” with the full disclosure and informed consent of both parties to the transaction.  Further, it states that an agent may not take any action that is adverse or detrimental to either party’s interest.  Can you see how this concept may cause a conflict in terms of our properly carrying out our fiduciary duties to both parties in the same transaction?

The concept of “dual agency” is inherently complicated when you have two parties trying to do business with each other and perhaps at the expense of the other, meaning that a buyer and seller are not always equally happy with the outcome even though a deed may have transferred from one to the other.  A single agent is in the middle of what may well evolve into a “tug-of-war” with either or both sides trying to exert their will on the other party by manipulating the agent.  This can happen with two agents as well.  This is why many agents question how one agent can properly represent two parties with potentially opposite goals.  Some refuse to be “dual agents” even though the practice is perfectly legal in PA.

When we represent both parties, how can we make each party’s interests primary?  Can they be equal?  By definition, “dual agency” requires that we adjust our fiduciary duties.  Can we obey the lawful instructions of two parties?  I think so although there may be some conflict.  We may not be able to provide undivided loyalty to more than person unless their combined goals complement each other.  Accounting for money would seem easy to accomplish.  The two duties that are compromised are disclosure and confidentiality:  I cannot disclose to another what one party considers confidential.  Frankly, what does confidential even mean?  I take it to mean protecting something that could cause harm to another although many people simply demand more privacy than others and want information or details kept private which would not affect a sales transaction or even be of interest to anyone else.

With respect to buyers and sellers working with the same agent, the best way to explain this conflict is to say that an agent cannot reveal how high a buyer is willing to go or how low a seller is willing to go.  Absent “dual agency”, it is common for our clients to ask what to offer or what to accept although I generally respond with advice about how to negotiate based on where they want to end up rather than what to offer or accept.  In “dual agency” we should provide each client with the same market analysis and are told not to advise beyond that.  Unfortunately, many if not most people hate having to negotiate anything let alone money so they may want to rely on their agent.  What is interesting is that sellers expect and deserve to see that a buyer is financially qualified to execute their offer but do they prove they can finance their offer or do they show the maximum amount for which they are qualified?  Some buyers only want to show their ability to execute what they are offering and that could be a problem if the seller wants more and there are multiple offers.  A seller might think a buyer’s offer their “highest and best” and move on.  Frankly I like to show a buyers’ maximum qualification and try to assure them that I want the seller to feel at ease with my client’s financials while making sure that just because a buyer could go higher does not mean they have to.  What about the seller?  The contract language shows that they can transfer title but there is no information that would in any way suggest how low a buyer could go and that is just the way it is.

Both clients should have accepted “dual agency” prior to my “introducing” them and, hopefully, both will continue to accept it and my role as the process goes from showing a property to making an offer, and then negotiating it and the remainder of the terms as the process plays out.  There may well be conflicts at the outset or later on as each party assesses who is winning or losing each step of the way.  Many like to “keep score”.  I have had conflicts where I suggested that I would put everyone in a room and walk out so they could work it out.  I have generally found sales where I acted as a “dual agent” to be the best although not all were perfect.

What happens when either party or the agent starts to question the viability of remaining in a one agent-two party scenario?  The concept of “designated agency” allows someone to ask a broker to assign a different agent to a buyer or seller when a conflict arises that cannot be resolved.  That is a good thing.  However, my opinion goes further.  While I understand and embrace “dual agency”, I do not see how an agent can be separated from one client and still represent the other.  While expanding the number of agents to two seems to allow both parties the opportunity to have exclusive representation, the former “dual agent” still knows more about their “separated client” than a typical non-dual agent does and that could be a problem.  In my opinion, if you cannot represent one, regardless of it being your choice or that of a client, you should not represent either.  Removing yourself entirely seems to be the only fair thing to do.  Of course the broker will be accountable for how either or both parties feel about the agent now designated to represent them.

So, what is the benefit of “dual agency”?  If you think it is the commission you are on the wrong track!  Some buyers like to work with the listing agent although some of them may be trying to leverage that relationship to their advantage.  Same goes for some sellers.  Simply put, the biggest advantage for me is that it removes a body from the process.  While some sellers and buyers may be harder to deal with than others, most conflicts I have seen were made worse by having an extra mouth involved.  Of course, if there is only going to be one agent, they have a lot of responsibility and it is not for everyone.

As far as avoiding “dual agency”, that may be harder than it sounds.  If you have a property listed and someone contacts you to see it or a buyer you are working for likes it, what do you do?  Chances are that most buyers will want their own exclusive agent but you never know and you may be working with two parties now who are destined to meet later.  Life is unpredictable.

I often describe “dual agency” as being like a “Tale of Two Cities”:  it can be the best of times or it can be the worst!

Agency is not always pretty and it is not always easy to explain but it is expected in client relations and its misapplication can and will cause harm, which is the antithesis for our entering into such a one-to-one relationship in the first place.

There is no time for inexperience, empty promises or false expectation! 

Remember:  HIRE WISELY.  We are not all the same!

Dual Agency: Does having two buyers interested in the same property qualify?

Filed under: Buying,Ethics,Hiring an agent,Multiple Offers,Price — awetzel @ 5:40 PM

In the NAR Code of Ethics and Standards of Practice, Article 1 requires that REALTORS “protect and promote the interests of their client” and says that this obligation is primary.  Further, we have 6 fiduciary duties owed to clients, meaning that we have a formal representation contract with them, which requires giving them our undivided loyalty, our disclosing all information concerning the transaction that might affect their decisions, our not revealing their confidential information and our protecting them from foreseeable risks or harm.  In most Real Estate transactions each party has their own exclusive agent making these responsibilities easier to understand although conflicts still arise.

According to RELRA, the Real Estate Licensing and Registration Act of 1980, Chapter 2 defines “dual agency” as occurring when an agent represents both the buyer and seller in the same transaction.  In Chapter 6, Duties of Licensees, Section 606d, it states that a licensee may only act as a “dual agent” with the full disclosure and written consent of both parties to the transaction.  Further, it states that the agent may not take any action that is adverse or detrimental to either party’s interest.

The PA Consumer Notice states that as a “dual agent”, the licensee works for both the buyer and seller.

The concept of “dual agency” can be complicated enough when you have two parties trying to do business with each other and perhaps at the expense of the other, meaning that a buyer and seller are not always equally happy with the outcome even though a deed may have transferred from one to the other.  Many agents question how an agent can properly represent two parties with potentially opposite goals.  Some refuse to be “dual agents” which is perfectly legal in PA.

However, while not considered “dual agency” in PA, what happens when one agent represents two or more buyers each interested in purchasing the same property?  I respectfully suggest that this is more like “dual agency” than not in terms of its practical application.  Most of us will never have an opportunity to confront this and when I discuss it in my classes many agents admit that they never really thought about.  Let me explore this.

Let’s start with my having one buyer interested in a house and assume they have made an offer and heard a “counter-offer” from the seller.  It is reasonable to assume that our fiduciary duties preclude us from disclosing their interest, including the amount of their offer, to anyone else (think of the fiduciary duties of loyalty, confidentiality and reasonable care) as well as letting anyone else know how a seller countered their offer as doing that could harm my buyer’s position.  So, what happens when I either have two buyers interested in the same or similar properties?  Let’s keep it simple:  whether 2 or 200 makes no difference although it gets geometrically more complicated as the number rises.  While RELRA may not see this as “dual agency”, I think it in the best interests of all involved to treat it as if it were.  Let’s look at two general examples.

First example.  I am working with two buyers, each looking at different price ranges.  One is looking up to $200k; the other up to $190k.  The $200k buyer makes a $180k offer on a $200k listing which the $190k buyer considered out of their price range.  What would happen if I informed the $190k buyer that the $200k seller countered at $195k?  From the seller’s standpoint, since I have no fiduciary duty to them, I would think they have no recourse for my disclosing their counter-offer although how a seller counters an individual buyer does not establish what they might accept from another and, presumably, it is in the seller’s best interests to have more than one interested party.  The real question is how would my $200k buyer feel if they knew that I shared something about their negotiating that might generate competition for them which could end up causing them to have to pay more to get a house or, perhaps even worse, cause them to lose the bidding?  This sounds like a problem even if we do not call it “dual agency”.  How would you feel if this happened to you?

Second example.  Two of my buyers-clients express interest in seeing the same property.  Aside from the planning it might take to manage the process of showing and perhaps writing offers and negotiating them for two different buyers, what is their expectation for how I keep the two processes separate?  As clients, they both signed the Consumer Notice and either accepted or declined “dual agency” and, since they signed a representation contract with me, they accepted the fact that I may be working with other buyers who share the same goals in terms of what they are looking to buy.  If either declined “dual agency”, how would that influence my performance with the second buyer, if at all?  Does the agency selection of either have any impact on whether I can add clients with a similar goal to my list of clients?  We all know that people change their plans from time to time and a buyer may decide to look at houses that I am already showing to someone else.  Of course if I failed to properly manage the process I have no one to blame but myself.

Again I mention the potential conflict and add to that.  In discussing this concept with other agents, I have heard some startling opinions.  Some feel it only “fair” to let both buyers know that they have competition.  One agent even stated that they would stop representing both, allowing their broker to designate a new agent for each, and that they would let both know exactly why.  Perhaps I look at this differently from others but, were I working with a buyer’s agent, I would be appalled to learn that they advised another of their clients about MY interest in a specific property.  Even if we take for granted that the details of my offer are confidential regardless of whether or not the relationship constitutes “dual agency”, advising another of my interest could harm me either in terms of my cost to acquire the property or, even worse, result in my losing the chance to own it.  In this scenario one of us will lose and that person may well have wished to know they had competition but the very act of raising the stakes most certainly seems to only benefit the seller unless neither buyer acted differently.

The last analogy I will use relates to how a listing agent is allowed/ expected to answer an inquiry about the existence of other offers or interest.  It is expressly understood that their ability to answer is dictated by their seller client.  While I would not suggest that a buyer agent’s informing a pair of buyer-clients about the existence of the other’s interest is a violation of the seller’s interest since there is no fiduciary duty, I think that the buyers should dictate whether their buyer agent is in fact allowed to share the buyer’s interest in a specific property with another buyer client.

Agency is not always pretty and is not always easy to explain but it is expected in client relations and its misapplication can and will cause harm, which is the antithesis for our entering into such a one-to-one relationship in the first place.

There is no time for inexperience, empty promises of false expectations! 

Remember:  HIRE WISELY!  We are not all the same!

“Coming Soon” Property Listings

Filed under: Buying,Ethics,Marketing,Selling — awetzel @ 5:29 PM

Sharing property listing information and making our listings available for other agents to show to their prospective buyer-clients is at the heart of the Real Estate profession.  Listing agents control the inventory and how they handle their inventory greatly affects their seller clients and how buyers and their agents perceive them.  We call how we do this “cooperation”.  There are two related issues:  compensation and procuring cause that I will avoid at this time.

One of the hottest topics today is “Coming Soon” property listings.  These are properties not yet on the active market or available for showings where the agent has put up a “For Sale” sign with signage that says “Coming Soon”.  Whatever the thinking behind it, these signs generate interest which could help a house sell fast or it could frustrate some agents and buyers if not handled ethically.  Many buyer agents seem to feel that the practice is deceptive and designed to allow listing agents to find buyers for their own listings thereby earning them more commission dollars.  Like most things in life where there are opposing points of view, this issue can quickly develop into a hot debate involving feelings and emotions regardless of the actual facts.  The practice is perfectly legal and can be very effective for sellers if handled properly.  My concern is that it may cause some buyers to have a less than favorable impression of us and our industry.

As I like to say, we are not all the same.  Some agents may do things that do not conform to our rules and regulations and I like to think that these instances are unintentional, perhaps resulting from a lack of understanding the rules or not thinking about how an agent’s actions may be perceived by others.  However, when a listing agent’s actions cause a buyer to miss out on a house they like and/ or a seller is deprived of additional competition that could have earned them a higher selling price, that is unacceptable.  A competitive market for scarce listings only adds to the situation.

Let me start with two disclaimers.  First, this NOT intended as legal advice.  Second, while the practice is legal if done properly, the devil is in the details and that is where “Coming Soon” property listings intersect with rules, regulations and emotion.  The fact that someone feels slighted may not necessarily mean that something wrong happened.

If a private citizen posted a “For Sale” sign on their own lawn with a sign that said “Coming Soon” we would have nothing to complain about.  Of course we would expect them to allow anybody interested in their home to see inside so that they could try to sell it for either the highest price or in the shortest period of time, wouldn’t we?  That changes when another agent posts the sign.  The difference is “competition”.

Our PA Real Estate Licensing and Registration Act, RELRA, and our Code of Ethics both require that an agent have a seller’s permission to post a sign on their property and to advertise a property as being “For Sale”.  Whether an agent is a REALTOR or not makes no difference.  The ideal documentation for this permission or authorization is a formal listing contract such as the one PAR created and updates from time to time.  I say that because it is a legally-approved form that also includes details relevant to forming a business relationship including the term or length of the arrangement, the duties of the listing agent, the amount of compensation earned and how it is earned among other important protections.  I suppose that a seller could send you an email asking you to put a sign on their lawn and authorizing you to advertise their property but would you?  If you only want the opportunity to generate buyer leads and are not concerned about selling the specific house or getting paid when it sells, this could work but I would not advise doing that for a number of reasons.

What happens when an agent, either on their own or through a buyer-client, becomes aware of a “Coming Soon” sign on a property that may interest their buyer?  If the agent knows of no one who may be interested, chances are nothing will happen.  Otherwise, the agent may soon find that the house is not listed in the MLS or it could be listed as “Coming Soon” for up to 21 calendar days without running up the days-on-the-market statistic.  In that case they will most likely call the listing agent to ask the price, features and anything else relevant to their buyer.  If the listing agent answers the phone or returns the call, this may go no further.  The problem comes to a boiling point when the listing agent, for whatever reason, does not respond and the agent placing the call feels that others are gaining access to show the property.  When there is a buyer chomping at the bit to learn about a house or a buyer who wants to see inside and their agent cannot get answers, the situation gets worse.  What to do???

In addition to rules governing signage and advertising which I mentioned earlier, agents who belong to the multiple listing service must abide by their rules.  The relevant one here is that once a listing contract is signed, the property must be uploaded into the MLS for other agents to be able to search within 3-business days.  That process leads to “syndication” which means that, if authorized by the seller, the information is disseminated to the Internet for the public to find in their searches.  I am aware that some sites allow agents to upload listings even though they are not on the MLS and that may or may not be a problem depending on what the seller has authorized and whether there is a listing contract.  While probably viewed as a benefit to the listing agent and seller, buyer agents can get frustrated when their clients learn about listings before they do especially if a property is not in our MLS.

If you see a “Coming Soon” sign on a property, regardless of when you think it went in the lawn, by the end of the third “business day” the property information should either be in the MLS for all agents to access OR the listing agent should have filed a waiver with the MLS which states that the seller has authorized the listing agent to withhold the listing from the MLS.  Many buyer agents question why a seller would do that and seem inclined to speculate that the listing agent did not properly advise their client about how this could harm them by preventing competition but the fact is they do not know what was discussed and the Code of Ethics and the general concept of professionalism should prevent them from speculating and judging another agent’s conduct just because they feel it unfair or because it does not meet their needs.  The seller is the boss and has the right to make decisions even if they may not make everyone else happy.

If the listing is uploaded to the MLS, all seems right unless the house quickly goes to “pending” or “under contract” since the buyer agent may feel that they were blocked from showing the house and that their buyer was treated unfairly.  True or not depends on the details and it may take filing a complaint to find out but, in my experience, things are not always unethical just because we did not get what we wanted.  Perhaps you or your buyer saw the sign and hesitated taking action.  Real Estate works at the speed of life and competition can be fierce!

If there is a waiver, the listing agent should still respond to another agent’s inquiry even if to tell them that they can show the house but that it is an exclusive listing where the listing broker will not be offering compensation to the buyer’s agent.  That is another subject I will ignore.  In addition, if there are no showings until a specified date, that should apply to everyone.  Of course, that does not stop a buyer from making an offer “sight unseen”.  All offers, even verbal ones, must be presented to the seller.

If the listing is not uploaded to the MLS and there is no waiver, the situation gets real cloudy because you do not know whether there is a listing contract or not.  I cannot tell you how to handle this but if you alert the MLS they will most likely contact the agent or company named on the sign although that may not happen quickly or make you feel any better.  If an agent does not call to ask if there is a waiver, they need to accept some responsibility for the tension that may arise with their buyer, perhaps to the point where the buyer no longer feels that their agent is working in their best interests.  These situations have ripple effects.

I will conclude by stating two of my truisms about Real Estate.  First, buying and selling is like playing poker:  you have two or more people who would like to know what the other people are thinking.  This includes agents.  Second, in most cases, even if everything is done ethically and professionally, the listing agent is in the preferred position.  They are working with the seller and may know them on a personal level.  All routes to a sale go through them and that is just the way it is.  While protecting and promoting the best interests of our client may not make everyone else happy, we should conduct ourselves as ethically and professionally as possible in terms of how we handle what is going on.  Buying and selling Real Estate often involves emotions because you cannot always get what you want when you want it.  While we cannot control other agents, we can keep those who wander ethically or professionally on track if we take the initiative.  While we cannot control our clients, we can do what we are expected to do and document what we have done so that we can at least rest assured that we did our best.  Again, the devil is always in the details.  This will not make everyone happy.  My goal is to clarify what I believe to be the proper way to handle “Coming Soon” listings so that we can at least minimize the controllable problems.

In the ideal world, every buyer would know their financial qualifications and limitations and know their wants and needs.  Every property listing would be made available to every possible buyer and all would be given a specified time to evaluate a house, schedule a showing and make an offer.  This should maximize the seller’s price and would give all buyers an equal chance to make an offer.  This is not an ideal world.

Here is the reality:  many buyers will delay getting pre-qualified or determining exactly what they are looking for which may prevent them from getting a house they think they want; buyer agents will continue to work with unqualified or not-yet-qualified buyers which may waste everyone’s time.  Some buyers and some buyer agents will always be more diligent than others when it comes to managing the buying process and identifying houses to consider, some will take action more quickly than others and be more realistic in terms of what they offer and how they construct an offer.  Human beings are funny creatures, aren’t we?

One of the best management aphorisms I ever heard is this:  “some people will make things happen; some people will watch things happen; some people will wonder what happened”.  On a related note, “Lead, follow or get out of the way”.  I mean no disrespect but too often people blame others when things do not go their way.  Buying and selling Real Estate often lacks etiquette and it is not for the faint of heart!  Be prepared!

There is no time for inexperience, empty promises or false expectations!

Remember:  HIRE WISELY!  We are not all the same!

Feedback: What is the fuss all about anyway?

Filed under: Buying,Ethics,Marketing,Price,Selling — awetzel @ 4:34 PM

What is showing “feedback” and why do listing agents and sellers complain when the buyer’s “exclusive agent” doesn’t respond to feedback requests or tell them anything substantial about their showing experience and why the buyer is not making an offer?  I have used the analogy that buying and selling Real Estate, or, for that matter, any type of serious negotiation, is like playing poker:  you have two or more people trying to satisfy themselves while knowing little if anything about what the other person is thinking or willing to do.  Trying to reach a mutually beneficial outcome takes work especially if the parties are far apart from the beginning.  It would be nice but completely unrealistic to think that every buyer and every seller will be able to get what they want when they want it.  There is often no interest in a house based on what the buyer needs or wants so any feedback they might offer would be meaningless.

Selling Real Estate is unique in that we have “showings” where agents we may not know bring prospective buyers they may not know (and who may not be financially “qualified” to buy) into your house to look at your stuff.  Your “first showing” occurs online these days so the number of actual showings has generally declined making each one that much more important.  Frankly, most showings do not result in a sale, many agents show up late or not at all and the seller is often left wondering what happened.  It can be very frustrating but showings are important.  This is not a “retail transaction” and there are typically a number of moving parts to manage.

Many seem to think that feedback will provide the necessary answers.  What stopped the buyer from making an offer?  Was it the asking price?  What the house has to offer or its condition?  Did they find something they liked more?  Was it the location or neighborhood?  Many agents assume that the asking price is the issue while sellers should question the marketing or the seriousness or financial ability of the buyer.  Admittedly, getting showing after showing without any offers, even low ones, can be very frustrating but is the lack of feedback to blame?

If a buyer is interested in a property their agent will contact the seller’s listing agent to make sure it is still available and, if so, begin a conversation that might lead to a formal offer.  This also applies to investment and commercial properties.  However, if there is no feedback or contact from the buyer’s agent, the buyer may simply not be ready to move forward at the moment.  That may or may not change but it is too easy to assume that there is no interest.  Shouldn’t a listing agent follow up?  There are times where we are told an offer is coming and then we hear nothing further.  So, why do we rely on feedback?  Most feedback offers nothing substantial.

Prior to “buyer agency” all Real Estate agents were “sub-agents”, presumed to be working for the best interests of the seller so they were expected to tell a listing agent what a buyer thought about their property listing.  There was no buyer representation or “confidentiality”, regardless of what the buyer thought.  This is why we have a Consumer Notice in Pennsylvania.  We want to make sure that buyers and sellers know their options for representation and what our duties are to them based on the nature of our business relationship.

Sellers often tell me that their prior listing agent said that buyer’s agents did not offer any feedback.  Perhaps.  When I act as a buyer’s agent I know that most listing agents will not ask for feedback unless they use an automated email process.  Even then, they may not question what I tell them to see if my buyer may have some interest or to learn something that might their sellers with future showings.  So much for “promoting the best interests” of their seller-client.  Even if a buyer is not going to make an offer, it would be nice to know what happened, wouldn’t it?  Showings are often inconvenient, taking time and effort so dismissing them does not make sense.  Even selling vacant properties can cause showing-related stress!

What does feedback provide?  It is meant to be what the buyer thinks and should only be offered with their permission as it could harm negotiations.  What the buyer’s agent thinks does not matter and should only be shared with their buyer-client unless something unusual happened.  For all intents and purposes, the agent is the buyer when it comes to communication.  Even if a specific buyer is not interested in a property, the buyer agent may have a future prospect interested in it so their opinion could hurt a future negotiation.

As a listing agent, respectfully, I really do not care how another agent feels about the price unless they tell me that it is the only concern or one of several that we might need to work through to generate an offer and a sale.  Otherwise, changing the price is not going to accomplish anything but lower my client’s proceeds.  If you want to compare the asking price of my listing to other similar houses in the area that would make sense but please do not tell me that the seller’s asking price is good if you do not know the local market or if your buyer is not interested in making an offer.

So, other than telling me whether your client may be interested in making an offer or not, what do I hope you will tell me?  Please call me immediately if there is an urgent issue such as a water leak or a gas odor.  Please tell me if something made you feel uncomfortable while you were at the property such as owners who are overly friendly or intrusive.  It is the sellers’ home so it is their choice whether to be present or not but they should respect the importance of a showing and provide the visitors some privacy.  I look at a showing as a private time for a buyer and their agent to walk through a house with the idea of discussing whether it fits what the buyer is looking for or to discuss if it can be made to fit their needs.  Some sales are impacted by how the people feel about each other and that can be good or bad.  Selling and buying Real Estate should be handled in a business-like manner:  too often emotions affect the people involved and that can get in the way of completing something that both parties want.

I have our appointment center automatically send all feedback to my seller-clients so I strongly encourage buyer agents to keep that in mind when they submit feedback.  The types of feedback I am looking for do not affect your duties to your client.  That being said, I have heard some troubling accounts regarding buyer agents who thought they were being funny or who may have been a little unprofessional with their feedback comments.  Selling a house can be frustrating enough without having a buyer agent add unwelcome commentary and, again, the resulting emotion can affect a possible negotiation.

I believe that there is a buyer for every house but every house will not appeal to every buyer.  An experienced listing agent should prepare their seller-clients for what can happen with scheduled showings as well as having been honest about what the sellers are trying to sell.  Buyer agents should be respectful of seller’s homes and, even if they will not provide feedback, they should arrive when scheduled or reschedule their appointment and cancel if they are not coming.  They should follow the showing instructions.

When houses get showing after showing but no offers, it would be nice if feedback could provide the answer but it may not.  The answer may really depend on trying to determine why some buyers did not come at all.  Showings are necessary so having the proper expectations about the process is a must!

There is no time for inexperience, empty promises or false expectations! 

Remember:  HIRE WISELY!  We are not all the same!

The Seller’s Property Disclosure and Lead-Based Paint Hazards Forms: An Overview

Filed under: Buying,Ethics,Selling — awetzel @ 4:02 PM

PA state law requires that a seller disclose knownmaterial defects” (as described on page 1 of the form) in writing to a buyer before entering into an agreement of sale.  Sellers should complete the form in a timely manner so that it is available when a buyer wants to make an offer as they need to review it and accept it.  Unavailable or incomplete forms can frustrate a buyer and delay or prevent them from making an offer.

While it is expected and assumed that a seller will make the appropriate disclosures, I have been involved in a number of mediation conferences where a buyer/ new owner had a problem after settlement and questioned whether the seller had been completely honest.  I am told that the form remains valid after settlement to some extent until the property is sold again.  The passage of time and what the new owner does to their house will impact that but it is an important legal document and should be treated as such.

An agent cannot complete the form but they should review it before making it available to other agents and their buyers.  I review them to make sure that they are completely filled out but I do not know enough about a client’s house to know whether the answers are correct unless I see something obvious.

Generally speaking, for those who are required to complete the form (see page 1 of the form), there are very few questions that do not require an answer within the check boxes.  I strongly encourage my clients to use as many check boxes as they can to minimize unchecked lines.  Here are some specific thoughts:

1) initial and date the lower left corner on the appropriate pages and sign and date the last page;

2) read an entire section/ paragraph before answering any individual questions;

3) answer based on “first-hand” knowledge (what you know), not based on what someone told you.  Even if the property is an estate or “flip”, most sellers have some knowledge they need to share on the form;

4) explain any “yes” answers.  Be as concise as you can or use an additional page if needed.  Make sure you write legibly in case there is an issue later;

5) answer all of the questions even if “unk” or “N/A” is the answer.  Please do NOT skip questions or sections that do not seem to apply or jump ahead;

6) in the paragraph “Other Equipment and Appliances”, only check items that will remain in the property NOT those that will be “negotiable”.  I suggest that sellers circle the words “will, or may,” to minimize issues when negotiating an agreement and to avoid having a buyer assume you will be leaving something for them at no cost only to find it gone later.  Unless requested in a formal offer, items are excluded;

6) due to the sheer size of the document, I encourage sellers to do it in steps.  If you can do the whole document in one sitting that is great but it has to be done properly.  I suggest using pencil in case you make a mistake.  Crossing answers out or using “white out” may raise questions later;

7) sellers are expected to update the form if anything changes.  We have an addendum for that purpose;

8) please let me know if you have any questions or need another page/ form.  I do not know your house but may be able to explain something that is helpful.

This is not intended as legal advice or meant to scare you but the form is very important.

As far as the “Residential Lead-Based Paint Hazards Disclosure Form”, here are a couple of thoughts:

1) this is a federally-required form;

2) do NOT assume that your house had lead-based paint solely based on its age;

3) two paragraphs require initials (line 12 or 13 and line 18 or 19); sign and date at the bottom.

There is no time for inexperience, empty promises or false expectations!

Remember:  HIRE WISELY!  We are not all the same!

« Previous PageNext Page »

Blog at