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Don’t Knock Real Estate Paperwork
The Sacramento courts are filled with disgruntled buyers who lose case after case because those plaintiffs believe they have justified cause to break the rules of real estate and they found a lawyer willing to file a lawsuit. That’s the interesting thing about our court system. Sometimes you can win, depending on the argument and the lawyer’s strategy. Sometimes you can lose, and get kicked to the curb, but whatever you do, you’ll generally end up paying for the privilege.
Whichever way it goes, nobody really wins. If there is a win of sorts, it can be more often than not bittersweet. People can slam down that open Budweiser, shooting beer into the air, and scream about deserving justice, but our court systems are not really about justice.
Still, it makes sense as a Sacramento real estate agent to document every file and retain every email for each and every real estate transaction. Because the best way to stay out of court is to not get there in the first place and show the opposition there is no case.
Clients wonder why they have to sign piles of paper and so many documents, and this is why. It’s to stay out of court. It’s not to win.
There are people in the world who believe they don’t have to conform to the rules. I have been guilty of that attitude myself, so I understand it. But there are certain types of rules and demands that can’t be ignored. If a police officer finds you sitting in an idling vehicle at the side of the road, for example, slumped over the wheel drunk, you can be pretty well assured you’re going to jail and you’ll lose in court . . . unless, maybe, you’re a legislator.
Don’t ever knock paperwork. When your Sacramento real estate agent presents you with documents to read and sign, there is a good reason. Paperwork is the cornerstone and foundation of real estate.
Guiding Sellers to Correctly Complete Seller Disclosures
Talk about dumb and dumber regarding seller disclosures and an irate buyer. I don’t know what’s worse — that a buyer could think that a real estate agent would be so dumb as to complete a set of disclosures on behalf of the agent’s seller or that the buyer could believe that an agent could be so much dumber as to complete them incorrectly. On top of which, it’s against the law for an agent to prepare a seller disclosure. But that’s what a buyer accused a Sacramento listing agent of doing without so much as batting an eyelash. That’s enough to make one feel incredibly empathetic for the poor buyer’s agent who probably has to put up with much worse crap from the guy.
When I take a listing, I discuss disclosures in depth with my clients. We talk about material facts and whether something small and insignificant needs to be disclosed. Most of the time, the answer is yes when you wonder if it needs to be disclosed — unless it doesn’t apply at all, and I’ve seen a few of those. The seller might ask about a fire that happened years ago on the other side of town, something that doesn’t affect his property. But if something affects your property in any form, shape or manner, then disclose it.
I once made a seller so paranoid about disclosing that he composed a small horror novel and delivered it to me — pages upon pages of stuff that might happen, ending with the foundation could collapse and the walls could cave in. He was just thinking about stuff that could happen, which wasn’t at all what I meant when I told him to disclose. Now I was stuck with that disclosure because I couldn’t send it back or pretend I never received it. I was required to give it to the buyer.
You might wonder why, why would I have to do such a thing when I represent the seller? I have to do it because I am required to disclose everything I receive. I must also treat both sides honestly. I can’t take it upon myself to choose which documents the buyer sees and what the buyer doesn’t see. The buyer sees everything.
If a neighbor calls to say his fence is on my seller’s property, I disclose it to the buyer. You’d be amazed at how many neighbors are defiant about such matters and wrongly believe that agents care about their opinions. I don’t disclose it as a fact because I don’t know where the property lines fall, but I do tell the buyer the neighbor says the property lines encroach. It’s up to the buyer to investigate or otherwise perform due diligence.
Still, guiding sellers to complete disclosures correctly is sometimes a little bit like herding cats. If you have a question about a disclosure, be sure to ask your agent for help. That’s what we are here for. Sellers tend to fret far more about the disclosures than buyers. Except for that one guy who is probably making his buyer’s agent’s life a living hell.
The Lead Based Paint Disclosure for Sacramento Sellers
One of the (many) problems inherent in selling a home yourself as a for sale by owner is FSBOs typically don’t have the seller disclosures. All sellers in California are required to disclose certain conditions and information about a home. Most of the time, a seller never gives these things a second thought because her agent handles that for her by providing the forms. We are constantly, as Sacramento real estate agents, thinking about managing risk for our sellers and, by extension, ourselves.
I try to have that “disclosure talk” involving potential lawsuits with each and every one of my sellers. I must put the fear of god into them because of the way some respond. For example, yesterday, a seller sent me a series of emails about whether his home has or does not have lead-based paint. He couldn’t remember when he bought the home what the seller at that time had disclosed. He wanted to make sure he disclosed the same thing. I love sellers like him to pieces. They are conscientious.
The lead-based paint form is a federal form that is required for every California real estate transaction in which the home was built prior to 1978, and I use it for transactions involving newer homes as well. You never know where a person might buy lead-based paint. It’s still sold in some states.
The lead-based paint form states there might be lead-based paint in the home. It puts a buyer on notice that if a buyer is concerned, the buyer needs to further investigate. This might involve having the paint tested. There is also another law that says you can’t hire a painter to paint a home who doesn’t comply with lead-based paint removal procedures.
My seller wanted a yes or no answer. Should he say yes he has lead-based paint or should he say no, he does not. Not everything in life requires a yes or no answer. Some things simply need to be disclosed and a seller should disclose what a seller knows for certain to be true. My seller was pretty happy yesterday that he had a real estate agent. While we can’t fill out these forms for our sellers, we can direct and help them to make the right decisions.
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.
The Remote Control Thorn from the Transfer Disclosure Statement
Before I share this amusing story with you about a transfer disclosure statement and remote controls for a garage door opener, let me preface it by saying this is not to single out any particular buyer’s agent in Sacramento because it could happen to anybody. You can’t examine my closed real estate transactions for the month and figure out who I am talking about because I have had a whole bunch of closings this February, but the story made me laugh, so you would probably like it.
To start with, I always advise my sellers when completing their transfer disclosure statement to think before they indicate how many remote controls they have in their possession for the garage door opener. I explain that they might want to put down one instead of two remotes, even if they own 2 remotes. The reason is often there is one person who is the last person in the house after it is sold. This person might go back to check on the house or pick up that last box of belongings, and when this person drives out of the garage and closes the garage door, this person tends to drive away with the remote control and not realize it.
It’s after escrow closes that this Sacramento real estate agent will often get a call from the buyer’s agent. The agent will demand that the seller provide restitution for the missing remote control because the transfer disclosure statement the seller signed promised 2 remote controls to the buyer and there is only one remote control. Most real estate agents I know do not want to deal with the issue of remote controls. We probably don’t even want to hear the words: remote control, yet we do. It’s like a thorn in our sides. That remote control thorn. It grows up out of cement all by itself without water or sunlight.
It all started with the closing last week of this particular home in Sacramento. First the buyer’s agent submitted a broker’s demand after closing asking for a higher commission split, although the commission was clearly shown in MLS. The agent said a speaker at the Sacramento Board of REALTORS meeting had recently explained that commission splits reflected in MLS are incorrect. That’s interesting. Because it is the commission in MLS that governs the transaction, so there is some sort of disconnect going on and confusion. That set me up for the question about remote controls.
The agent insisted that I had told her there were remote controls. Now, I know that I never talk about remote controls to buyer’s agents because, like I said, I do not much care for the remote control thorn. I don’t mention whether there are remotes, where the remotes would be kept, how many remotes the seller would own — I keep my mouth shut about remote controls.
I pulled out the transfer disclosure statement and looked at it. Sure enough, the box for remote controls was left unchecked. The line for the number of remote controls was left blank. The seller did not even disclose whether he had a remote control and, since he didn’t live in this house because it belonged to another family member, he probably did not have any remote controls nor any knowledge of their existence.
I sent the transfer disclosure statement to the buyer’s agent to show there were no remote controls conveyed with the property. The buyer’s agent sent me the AVID I had completed and insisted I noted there was a remote control. Under “garage and parking” I noted there was a garage door opener. I also said doors were stored in the rafters. No mention of a remote control. See, this is how miscommunication can happen in real estate. A garage door opener is not a remote control. It is a device secured to the ceiling that opens and closes the garage door when activated by a button attached to the wall or a remote control, but it is not a remote control.
