Email Elizabethmaterial facts
Sellers Who Get Presale Home Inspection Slit Own Throats
A presale home inspection is a bad idea for a seller.
An an exclusive seller’s listing agent in Sacramento, I can preach until the cows come home that getting a presale home inspection is lousy idea but I still get resistance from other listing agents who disagree. They are confused about what doing the right thing means. Doing the right thing means protecting our seller’s liability and profit, and paying for a pre-sale home inspection is overkill. Not only that, but it can come back to bite. Such a disclosure can cost sellers tens of thousands and could even destroy their chances of selling a home.
California real estate law says a seller is required to disclose what a seller knows, which includes material facts. It does not say a seller is required to dig up every defect about which the seller has ZERO knowledge and then present those unknown findings on a silver-plated platter to buyers. It makes no sense in any sense of a logical argument to obtain a presale home inspection, except maybe to a home inspector who stands to profit.
Buyers are required to do due diligence. Buyers are required to obtain their own inspections, any and all that they choose to do. If a buyer fails to perform due diligence or fails to uncover a defect (about which the seller had no prior knowledge), that is not the liability of the seller. It falls squarely on the shoulders of the buyer. That’s the beauty of California real estate law and seller disclosures.
Case in point of ignorance. Barry Stone is a certified building inspector who syndicates a column about home inspections. He suggested in a recent article that banks selling REOs (real estate owned), which are foreclosures, should be required to obtain presale home inspections. This is a good example of a person focusing only on one part of real estate without looking at the bigger picture.
Banks are not required to disclose defects in a foreclosure when they have no knowledge, just like ordinary home sellers are not required to disclose defects about which the have no knowledge. Banks are even more off the hook since they never lived in the house. They sell the house AS IS because they don’t want to invite liability, either. Just like regular sellers.
To try to impose a law that requires home sellers, banks or otherwise, to obtain a list of defects to present to a buyer is ludicrous. Sellers are not required to discover factual information to present. Mr. Stone implies banks are dishonest and unfair because they don’t give their innocent home buyers a list of defects and they allow buyers to purchase their foreclosures without insisting buyers get a home inspection either.
If buyers are naive enough not to pay for a home inspection, and their real estate agent is bad enough not to suggest a home inspection, how is this the fault of the seller? Buyers are accountable to themselves. Our purchase contracts requires that buyers perform certain duties, and sellers give them ample time to complete those duties.
It makes no sense for a seller to go looking for trouble. Not to mention, no two home inspections are ever identical. A presale home inspection could show a defect the buyer’s home inspection would not and vice versa. Just don’t do it. Don’t think about it. Don’t act on that impulse, either. Your California purchase agreement states your sale is AS IS. Just leave it alone.
Are Homeless People a Material Fact in Midtown Sacramento?
Are homeless people a material fact in Midtown Sacramento?
A home seller asked me recently: are homeless people a material fact when selling a home in Midtown Sacramento? She said she’s lived in Midtown for so long that the homeless population in the area has become a fact of life, a daily occurrence, no different than the sun rising and setting every day. You come to expect it so you don’t pay much attention to it. Homeless people are prominent near homes in Midtown Sacramento, as well as other areas of Sacramento, and all over the world.
Except maybe for Cuba. You ask a Cuban about homeless people and they tell you there are none. That the government provides. Fifteen days of rations is the stipend in Cuba. People have to fend off hunger the rest of the month. While I did not see any homeless people during our trip to Cuba last year, it doesn’t necessarily mean they do not exist. Further, the close bonds developed through a strong family structure in Cuba is often such that there is always a place to go. Not quite the same as our families in Los Estados Unidos. Cubans will say if you see a homeless person, it’s because the person chooses to be homeless.
Not so in California. Many people are homeless because they have no choice. Still, they are not a defined protected class under the 7 protected classes of Fair Housing or even the extended classification by the state. But does that make homeless people a material fact?
I asked the seller if the homeless people sleep on her sidewalk, whether the homeless trespass on her property or throw stuff on her lawn? Generally with a disclosure, it’s a good idea to stick with what you know. You don’t want to go overboard, but you also do not want to under-disclosure or intentionally withhold a material fact. Material facts are anything that would prevent a buyer from buying the home or reduce the amount the buyer would pay for the home if such a fact were known.
Simply the fact a seller is asking whether a disclosure should be made often indicates the answer is yes. However, I suggest sellers stick to the facts and be brief. People get into trouble when they ramble too much. As a Midtown Realtor in Sacramento, my duty is to look out for my client’s interests. I’ve heard people mumble about Realtors not being forth coming or discouraging disclosures because maybe the transaction won’t close, and that’s such a dumb analogy. The fact is most Realtors routinely practice risk management to reduce the chances of either the agents or the sellers getting sued.
When questioned further, the seller said homeless people dig through the recyclables in the street, although not her containers because she does not put her recyclables in the street for pickup. Does she know for a fact those people are homeless? If the question is are homeless people a material fact, then the seller should probably verify whether those trash pickers are homeless. A good way to disclose might be people pick through the recyclable trash containers in the street and there are homeless people in the area. Those are the facts the seller knows.
Buyers don’t really care what sellers tell them, as long as a seller discloses. That’s the bottomline. If you’re looking for a Midtown Realtor in Sacramento, call Elizabeth Weintraub at 916.233.6759. 40 years of service.
Disclosing Material Facts to a Sacramento Home Buyer
Buyers don’t care what you tell them as long as you tell them. That’s my opening statement when I hand home sellers a package of disclosures to complete. It’s the things you don’t tell a buyer that can come back to haunt you, not what you do say. If you don’t believe me, I suggest you Google: Snake Infested House in Idaho.
You take a neighborhood where I live and work as a Sacramento real estate agent like Land Park. Because I live in Land Park, I have intimate knowledge about the neighborhood, which agents who live outside of Land Park probably don’t know. If they don’t know, they can’t disclose those facts to a buyer. Although, it could probably be argued that they should know or should at least have asked questions of the seller.
On the front end of my marketing, I sell the delights of living in Land Park — the friendly neighbors, tree-canopied streets, fabulous restaurants, bike trails and our special attractions such as William Land Park, the Sacramento Zoo, Fairy Tale Town, the WPA Rock Garden, and Vic’s Ice Cream.
But there is also a downside — as there is with any neighborhood, I don’t care where you live. For example, I know which areas in Land Park routinely flood during a hard rain. I know where the feral cats, skunks, opossums and raccoons roam. Which streets get foot traffic and the origination of that traffic. When noise factors such as trains or freeways can be present. Parking ordinances. Which trees are protected. Selling homes in Land Park means more than what we used to call selling real estate in the old days: selling carpets and drapes. That used to be the definition of residential real estate sales in the 1970s. Except nowadays it’s more like selling hardwood flooring and plantation shutters.
The thing is after escrow closes, odds are something in that buyer’s new home will probably malfunction. And the minute it does, the buyer is likely to immediately jump to the conclusion that the seller knew about it and purposely withheld that information or concealed that defect. It’s human nature. We’re a suspicious bunch of people.
So, how do you bump up the odds that you won’t get sued after escrow closes? You hire an agent who can explain the inherent problems with some types of seller disclosures and can give you the right documents. You find a Land Park agent who knows the nuances of your neighborhood. I tell my sellers to disclose all material facts. If I know a material fact, I disclose it. I go into great detail about what a material fact is and why it’s important. I help sellers to recollect and disclose. We talk about the Transfer Disclosure Statement.
The other day a seller objected to a point I made in a disclosure. She wanted me to remove a sentence about the possibility that a neighbor’s dog might bark. No can do. The tenant told me the dog next door barked. I don’t know if the dog barks. The dog wasn’t barking in my presence. I noted that I did not hear the dog barking but the tenant said the dog barks. This disclosure doesn’t appear in my marketing materials. It appears on the agent visual inspection, on which I obtain the buyer’s signature, along with a pile of other documents after offer acceptance. I’m always thinking one step ahead of ways to protect my sellers yet conform to the law. That’s my job, and I take my job seriously.
The point is it’s not what you say, it’s how you say it. I don’t want my sellers ever ending up in court. Not if I can help it. And I can. If you’re looking for an agent in Sacramento to help you to buy or sell a home, call Elizabeth Weintraub at 916 233.6759.
While Elizabeth is on vacation, we are revisiting some of her favorite blogs.
