P R E S E N T S Minimize Your Risk Minimize Your Risk Maximize Your Earnings Maximize Your Earnings Understanding and Recognizing the Top 10 Property Conditions that most often lead to disputes in the Real Estate transaction *According to the NAR Legal Scan/Legal Pulse
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P R E S E N T S
Minimize Your Risk Minimize Your Risk Maximize Your EarningsMaximize Your Earnings
Understanding and Recognizing the Top 10 Property Conditions
that most often lead to disputes in the Real Estate transaction
*According to the NAR Legal Scan/Legal Pulse
FACTS…
According to the 2016 National Association of Realtors
Profile of Buyers and Sellers
FACT:59% of New Buyers rely upon their Agent to point out unnoticed features/faults with the property
53% of Repeat Buyers rely upon their Agent to point out unnoticed features/faults with the property
(This ranks as #2 benefit)
#1 benefit is to help buyer understand the process
Source: 2016 NAR Profile of Buyers and Sellers
FACT:92% of homes sold in the Northeast used an Agent or
Broker (+2% from 2015)
YOU ROCK!!
Source: NAR Profile of Buyers and Sellers
Help buyer understand the process 80% 51%
Point out unnoticed features/faults with property 59% 53%
Negotiate better sales contract terms 49% 46%
Provide a better list of service providers (e.g. home inspector)
39% 38%
Negotiate a better price 39% 35%
Top 5 benefits your buyer clients want
New PreviousBuyer Buyer
FACT:FACT:80% of claims against brokers
E&O insurance are due to property related conditions
Effective disclosure helps you earn more and keep more commissions
What is theNAR Legal Scan and Legal Pulse?
Legal Scan Published every two years by National Association of Realtors
Legal Scan discontinued in 2013
Replaced with Legal Pulse
What is the NAR Legal Pulse?
Quarterly newsletter - analyzes current legal trends in risk management that impact real estate professionals (nationally)
Tracks cases and statutes
Identifies emerging issues and trends
www.realtor.org
2015 Legal Issues by Major Topic
____________________________________________________________
Topic Cases
Agency 74
Property Condition Disclosure 49
RESPA 40
Fair Housing 32
Property Condition Disclosure Issues
Caveat Emptor
The doctrine of “Buyer Beware” is gone….
Replaced by Agent Beware!Replaced by Agent Beware!
Realtors are held to a higher standard
“What do you know about the property” has been replaced by “What should you know about the property!”
Today’s AgendaToday’s Agenda
• Help you develop an awareness of what to look for (without turning you into home inspectors)
• Highlight warning signs of possible defects• Overview of Top 10 Property Conditions that
most often result in disputes
• Common sense rules of disclosure
Why is this information important?
Happy, well informed clients, mean more referrals (and no disputes)
More referrals = more earnings
Minimize your risk by having a greater awareness and understanding of adverse conditions
Top 10 Property Conditions
Water intrusion/Mold
Structural Defects – flooring/walls
Insects/verminSeptic/sewerBoundary issues
HVACPlumbingRoofEnvironmental
IssuesElectrical
Mold/Water Intrusion#1
Mold & Water Intrusion
What’s the problem?
Mold & Water Intrusion
Is this a problem?
It’s Just A Small Window Leak…
How Bad Could It Be?
Warning Signs of Water Intrusion
Poor gradingInadequate ventilation
in crawlspace or atticCracks in foundationEfflorescenceRoof stains in atticMissing roof shingles
Stains on ceilingsNewly painted
foundation/floorsWater stains
baseboard/furniture legs
MoldSump pump Downspout not
extendedWindow rot
Structural Defects/Walls & Floors #2
Walls/Floors
Deck Framing & Support Systems
Structural Defects
Some defects are obvious….
Structural Defects
….and some are not!
Structural Defects
A closer look
Warning Signs of Structural Issues
Sloping or sagging floors
Overly snug fit to floors and windows
Cracked tile floorExcessive concrete
cracking and separation
Alterations without permits
Sagging beamsFunky
supports/columnsStair riser/tread sizeCrushed sills/joistsSuspicious homeowner
repairs
Insects/Vermin#3
Bats & Birds Nesting in Attic
Powder Post Beetle Damage
Termite Mud Tubes & Damage in Wood
Warning Signs of Insect Damage
• Termites: Mud tubes Damaged wood Soft spots or blisters
on drywall
Carpenter Ants: Frass Smooth channels along
wood grain Damaged wood
Powder Post Beetles Frass Small circular/oval holes Meandering holes
through wood
Carpenter Bees Staining Bees hover around
eaves, deck, fence Round holes
Septic/Sewer#4
Sewer & Septic
Where does the water go?
Where does this water go?
Warning Signs of Septic/Sewer Issues
Slow sink drainsToilet flush fills, then drainsOdor in yard – septic breakoutInternal odorsWashing machine (grey water) drained to outside
Plumbing
Plumbing
The latest in designer plumbing!
Some Things Are Readily Apparent
Some Not So Obvious
Warning Signs of Plumbing Issues
Loose and missing grout and tiles
Loose toilet
Safety glass at tub or shower enclosures
Water odors (sulfate)
Aged piping
Leaking drain traps
Reduced water pressure
Roof
Roof transition Exposed Flashing
Roof Flashing
Defective Asphalt Shingles
ICE DAMS!!!!
Warning Signs of Roof Issues
Age of RoofRusted FlashingMissing, cupped or curled shinglesStained ceilingsCracked or missing tilesBuckets in the attic
Environmental Issues
Radon (in air and water)AsbestosLeadUnderground Storage Tanks
Warning Signs of Environmental Issues
Radon – lack of disclosure, mitigation system not functioning
Asbestos – wrapped pipes, loose insulation, vermiculite, aged floor, 6 x 6 ceiling tile
Lead – 1978 or beforeUST – cut off fuel lines, new gas, evidence of prior
oil tank, propane
HVAC
Warning Signs of HVAC Issues
Aged units
No maintenance tags
Odors in house or near unit
Ineffective function – not hot enough, not cold enough
Electrical
Panel, Condition & Location Problems
Warning Signs – Electrical Issues
Outdated Service sizePanel issuesExposed romexOpen junction boxesExtensive use of electrical cordsAluminum wiring
(primarily used from 1965 – 1974)
Best Practices…
Make sure your client understands his/her obligations under the contract
Explain that he/she has a right to bring in specialists to investigate the condition of the property
Do not give advice beyond your area of expertisePoint out potential trouble spots and recommend a
Home InspectionReview Seller’s disclosure and ask for more
information if necessaryDocument everything in writing
Minimize Your Risk
Make sure the Inspection Companies that you recommend have:
Errors & Omissions InsuranceFully licensed in CT/MA/NYStrictly adhere to the Standard of PracticeStand behind their inspectionsOffer comprehensive inspection agreements
Tiger Group Office Seminars
PCD Perils & Pitfalls – (Water/Septic/Sewer)
203K Financing – Buy it, Fix it – all in one loan
Mold – Fact vs. Fiction
Law & Order HIU (Home Inspection Unit)
Mock Inspection
Individual Training Modules – Got Questions? We’ve Got Answers!
This Old Connecticut House
Minimize Your Risk – Maximize Your Earnings
Top 10 Environmental Issues
Survivor! Will The Deal Close, Or Will You Be Voted Out Of The Transaction?
Thank you!We look forward to working with you!
Questions???
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