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Do You Need Smoke and Carbon Monoxide Detectors to Sell a Home?
Everybody and their uncle knows you need smoke and carbon monoxide detectors to sell a home in the Sacramento region . . . or . . . do you? First place to look, of course, is the California Residential Purchase Agreement. Paragraph 7 B1 lets the preparer of the contract check a box as to which party will pay for smoke and carbon monoxide detectors. Agents who are on the ball will specify the buyer will pay for those items when the home is sold AS IS, but not every agent is on the ball.
Now, state and local laws require a carbon monoxide detector be installed on every level of the home. Some appraisers count every level, even a one-step-down family room as an extra level. They might note basements as an extra level. The danged things are only $20 a piece, and they don’t have to be wired into anything, just plugged in. But what happens if you don’t install carbon monoxide detectors? Will firefighters ax down your door? Will the CO cops break into your home dressed in haz-mat suits to arrest you?
What happens is the buyer’s appraiser won’t release the appraisal report and /or the lender will call for carbon monoxide detectors to be installed before the loan will fund. Or, the way I explain it to sellers: shit rolls down hill. The appraiser will look for the carbon monoxide detector immediately upon entering the home. If they don’t see it, they will often leave and charge the buyer for a return visit. The buyer will then complain to their agent. Their agent will then call me to complain. See where this crap rolls?
So do I naturally call the seller and complain? Are you joking me?
Because I’ve already explained it upfront and if a seller chooses not to install a carbon monoxide detector, I am not the CO police, either. Hey, I ask you. Whose fault is it the buyer doesn’t have cash and needs to get a loan? Is it the seller’s fault? As solely a listing agent, I realize agents who represent both parties do not share this attitude, and, in fact, find it shocking, from their own biased point of view.
Our state and local laws require a smoke detector in every sleeping area; however, an appraiser’s definition of a sleeping area might be different than yours or mine. Smoke detectors are also required in every hallway and on every level. If the smoke detector features a removable battery, the unit must contain a non-removable sealed battery good for 10 years. Which excludes every smoke detector in my house, now that I think about it.
Sometimes, on my AS IS listings in Sacramento I include a clause in the listing agent’s AVID that states the buyer is responsible for installing smoke and carbon monoxide detectors. It is not really legal because buyers must sign receipt of that document and may not agree, but I stick it in there anyway. When there is no loan, then it becomes a matter of whose responsibility is it to install smoke and carbon monoxide detectors (sellers), who will pay for it (buyers or sellers) and, most importantly, who will enforce it.
And I think you know the answer to that last one.
An additional seller consideration, though, is a signature on the Transfer Disclosure Statement (TDS) does state the seller promises the smoke detectors are installed in accordance with the law.
This matter should be discussed by the listing agent with the buyer’s agent beforehand, just to avoid misunderstandings. However, most buyer’s agents are trained to look for smoke and carbon monoxide detectors when they first show the home and make notes in case the buyer decides to make an offer. If agents aren’t providing this service for their buyers, they should.
When is a California Purchase Offer Legally Binding?
A purchase offer is legally binding when legal delivery has been confirmed.
My seller asked when is a California purchase offer legally binding? He had accepted a buyer’s counter offer, signed all of the documents. We sent the package back to the buyer’s agent and asked for confirmation. Tick, tick, tick. No confirmation came. Next morning, tick, tick, tick. No confirmation. Then the buyer’s agent sent an email to say the buyer was over the top with excitement. Only little problem? We are not in contact.
Why isn’t the purchase offer legally binding? The seller accepted the buyer’s counter to the seller’s counter, so we have completed agreement, right? Not so fast. We don’t have a ratified contract. The reason is the buyer’s agent did not name herself as the recipient of the counter offer. The agent left that spot blank. Which means it defaults to the buyer to initial and confirm receipt.
We had no confirmed receipt in writing from the buyer. We did not have a done deal. And wouldn’t you know it? Another buyer wrote an offer and submitted it quickly for about 5% over the list price. The amount was significant. This new buyer really wanted the house. As a listing agent with a fiduciary to the seller, this is a situation that required immediate attention.
First, I notified the seller to see if he wanted to take the new 11th-hour offer. It was a lot more money. It was also subject to an appraisal, but same situation as the offer he accepted. Would it appraise at that inflated value? I gave it a 50 / 50 chance, which is pretty good. If it didn’t appraise at list price, the seller can still sell at the appraised value. Plus the odds are good it might fly at that price.
I let him know we could withdraw the accepted Buyer Counter Offer and take the other offer, if he so chose. Not my decision. My responsibility is to relay the pros and cons of the situation and let the seller choose. But the seller decided he likes the first buyer who is buying his home and will stay with the existing offer. See, you never know.
The point is to give the seller enough information so the seller can make an intelligent and informed decision. It is not to make the decision for the seller nor to sway the seller’s thought process.
Second, I notified the first agent again that we had not received the buyer’s confirmation and let the agent know there is another offer that is much higher.
Even so, we did not receive the buyer’s confirmation until around noon the following day. My seller is a sweet, kind, caring person and money holds a lower priority to him. If this seller was some other guy, I can wager dollars to doughnuts, he would have taken the higher offer in a heartbeat. This particular buyer could have lost her dream home because the agent left blank the spot for delivery.
Still, this is an excellent case study to answer the question of when is a purchase offer legally binding. As a Sacramento Realtor, when I find myself saying, “well, technically,” that means it is not binding until one more action happens. In this crazy Sacramento real estate market, buyers can get squeezed out on such technicalities.
Don’t Hate Us Because We Expect Buyers to Conform to the Contract
Sacramento listing agents expect buyers to conform to the contract.
Unless the buyer’s agent changes the terms in a purchase contract, or we negotiate different dates, many Sacramento listing agents expect buyers to conform to the contract. Well, we don’t actually expect the buyer to know this because it’s up to the buyer’s agent to explain timeframes and duties to the buyer. So often, though, it’s click, click, click in DocuSign, what I can’t call press hard, third copy is yours anymore, but same principle. Some agents do not explain this stuff to the buyer until it’s too late, and then emotions escalate.
And, to be fair, there are also some listing agents who do not expect buyers to conform to the contract at all because they just don’t care. It requires extra work on the part of the listing agent. Then there are the agents who have their own ideas about the meaning of printed words, and don’t even get me started on that group. Nobody is ever so wrong who thinks they are so right.
We like to keep it simple. After we go into contract, we forward an estimated timeframe to the buyer’s agents and the sellers. This way everybody knows what is expected, providing they read it. Some contracts are nebulous because agents mess them up. In talking with a buyer’s agent last week, she asked how she could tell the date of contract ratification. Seems the buyer’s agent had written language into the space for the counter offer requiring action that had nothing to do with a counter offer.
We expect buyers to conform to the contract because it’s a requirement. Because our sellers conform. We do our part. We also have fiduciary to the seller to try to ensure the other side cooperates. We send the seller disclosures within the zero to 7 days required, and we expect them back by day 17. Certainly, a buyer can find sometime within a 10- to 17-day period to sign and return the documents. Of course, the buyers have to first receive the disclosures from the buyer’s agent. When I worked with buyers, I hand-carried the disclosures to the home inspection and obtained signatures there. Or, I uploaded them to DocuSign and stood by ready to discuss via phone.
Now that I work with sellers as my sole focus and my team members work with buyers, I ask my transaction coordinator to follow up with buyer’s agents and remind them when a contingency release is due or when we expect to receive other documents. We let them know upfront we expect their buyers to conform to the contract. Not all of them are happy about this fact, but it’s not personal. It’s just our job.
Every so often we get an agent who sends us a document after the escrow closes and they ask us or our sellers to sign it. They often turn testy when we explain we cannot sign after closing. When the transaction records, it is over. Completed. Signing after the fact has no validity and might even be considered fraudulent.
Sacramento Home Sellers Can Reject a Request for Repair
There are solid reasons some sellers in Sacramento might reject a Request for Repair.
I am not afraid to admit that as a top listing agent in Sacramento, I am sometimes regarded as being very hard on buyer’s agents when it comes to negotiating a Request for Repair. In part, it’s probably because those agents are used to dealing with listing agents who just want to close the transaction and get paid. They call those kinds of agents “easy to work with.” Getting paid is nice but it’s not my focus. If the sellers do not care if the transaction cancels, neither do I. Because I want what my sellers want. That’s my success formula. Not every seller will reject a request for repair, either. However, a seller is absolutely under zero obligation to accept.
The California Residential Purchase Agreement states the sale is sold AS IS. There is nothing in the purchase contract that says a seller must renegotiate the price, make any repairs or out of extreme generosity agree to hand the buyer cash at closing toward closing costs. Buyers are allowed to do inspections and perform due diligence for the buyer’s edification only. A home inspection report is not a license to ask for repairs.
One such buyer recently asked for 4 pages of repairs. Four pages! She listed nearly every item in the home inspection report and asked the seller to fix it, which was absolutely crazy insane. You never know what a buyer might demand during escrow. Buyers are just as likely to be mentally unbalanced as they are reasonable; they need guidance, which is why their agent is so important to the transaction. Yet, some agents are either unable or uncomfortable educating their buyers. Some buyers don’t listen to professional advice, either. They will listen to a co-worker or uncle who sold a home a while back and did things this way or that way, which means nothing, but they won’t accept advice from an agent who has sold hundreds of homes. Go figure.
Some buyers can also be unethical. They might make a full-price offer thinking once they have been in escrow for a few weeks, the seller will agree to a Request for Repair because the sellers do not want the buyer to cancel. Sellers resent this strategy. Especially when the buyer asks for things that were readily viewable during the initial showing. Sellers feel deceived. Like the buyers are trying to hold them hostage. But buyers don’t think about that. They tend to think about what they want, and what they want is not carrying a lot of weight in today’s Sacramento seller’s market.
It’s not uncommon for a Request for Repair to cause bitter feelings. Buyers might think, oh what’s the harm in asking, the seller might say yes, but that’s because they do not see the pettiness nor annoyance. They live in their own world. They would be wise to consider ramifications. For example, when I bought our house in Hawaii earlier this year, the living room vault was cracked at the seam. A previous earthquake had rattled the structure. We asked the sellers to repair it upfront as part of our purchase offer. The sellers appreciated that approach and we worked it out.
Later, when the home inspection revealed a few minor things, I asked the sellers to fix those things but I didn’t do it in a formal Request for Repair. I wanted to enlist the sellers’ cooperation, and let them know they didn’t have to do anything but since they were in Hawaii and we live in Sacramento, we would be grateful if they would. It was just an email to the listing agent. Very low key. The sellers fixed the stuff. Goodwill goes a long way.
But don’t be astonished if you send a Request for Repair and the seller says no.
If you would like to hire a top producer listing agent in Sacramento with 40+ years of experience, call Elizabeth Weintraub at 916.233.6759.
What Happens After the Notice to Buyer to Perform?
Buyers who receive the Notice to Buyer to Perform could be subject to cancellation.
Few home sellers in Sacramento really look forward to executing a Notice to Buyer to Perform, but sometimes that real estate document can become a necessity. ¡Si, yo necesito! That generally come about because the buyer has not taken some sort of contractual action arising from the California Residential Purchase Agreement. Things such as removing the inspection contingencies or appraisal contingency. Just because the contract by default gives the buyer 17 days to remove inspection contingencies does not mean those contingencies automatically expire on Day 17. NO, contingencies can continue until closing if not released.
(I say NO like el Español. With emphasis. The thing I love about my Español lessons is the native speaker uses such passion. He says NO like NOH! Short and sweet. Like he means it. Don’t bother him anymore. Go away. Stop talking. End of story. It’s an attitude, people, that goes into speaking Spanish.)
Back to my story. If the buyer has not released contingencies, and we’ve made several requests to the buyer’s agent, the next step is to issue a Notice to Buyer to Perform. The document gives the buyer another chance to perform prior to cancellation of the contract. The seller is not required to cancel the contract, but most sellers will issue a unilateral cancellation if the buyer fails to take action.
Sometimes buyers stop responding to their agent. But what happens if the buyer’s agent stops responding? That could be a different story. It’s not unusual for an agent not to reply to an email, text and voicemail, especially if that agent is occupied elsewhere, like some are, yet I’m not condoning that kind of behavior. It’s triste. On the other hand, an agent could be in the hospital, out of the country or involved in an emergency. It’s not a good idea to cancel the buyer simply because the listing agent has received zero communication from the buyer’s agent.
In that instance, I will call the buyer myself to inquire. Por supuesto, I first tell the buyer’s agent what I propose to do. If he or she does not respond to me, though, ¡qué pena! It’s not always the buyer who is failing to perform. It could very well be the buyer’s agent. As a Sacramento listing agent and a Realtor, I am required to be fair to all parties. No sense in penalizing a buyer because the buyer’s agent dropped off the face of the earth. I’m just here to get the job done for my sellers.
