THERE'S A LOT MORE INVOLVED THAN JUST "SHOW A HOME",  Chapter 2 of 8

* * * *  HARD CORE REAL ESTATE TALK * * * *

LENN IS PAID FOR WHAT SHE KNOWS, NOT FOR WHAT SHE DOES!

Reference is made to the recent posts of Gary Bolen and comments thereto by Bob Stewart about agents getting the message out describing [justifying] the services provided to home buyers.   

Specifically, Bob Stewart suggested that we write about the duties outlined in my post of November 11, 2006:

1.  Make the appointment
2.  Show the home
3.  Provide the required disclosures
4.  Write the contract and escrow
5.  Manage financing for the buyer
6.  Manage inspections
7.  Manage the title work
8.  Schedule the settlement and manage settlement services

Today's chapter describes "SHOWING THE HOME".
 
We usually arrange to meet our buyers at their home or hotel if they are relocating.  This may take us out of our way but offers an opportunity for valuable time for conversation.  Perhaps it's a "control" thing, but taking a buyer to a home for sale is always preferable to meeting a buyer at a home site.  If you work from an office and the office is convenient to the buyer's home, that's a good alternative.  Many agents now work from home. 

We have an appointment to show and, if all goes right with access, we are ready to show the home.  Agency disclosure is made and the agent is ready to "show the home".  If the seller is present and offers to show the home, fine with me because no one knows the house better than the owner, although we discount seller claims about condition, value, maintenance, etc.  The important thing about showing a FSBO is to take your time.  Whether you have an owner tour or agent tour, your buyer needs to observe as many nooks and crannies of the house as possible.  We have a flashlight and we are prepared to look. 

ENTRANCE.  Beginning with the entrance, observe the door jam and sill to determine if there is wood rot.  This is a prime place for wood rot if the door doesn't close easily or the paint.  We're not doing a home inspection, we're observing the general condition of the house to evaluate maintenance.  The roof can be observed to thickening and curing tiles.  If the roof has obviously reached the end of it's normal useful life, this is a consideration when making an offer if your buyers like the house. 

HALLS AND WALLS.  Slowly walking through the house, you will want to observe warn hardwood areas (expensive repair), carpet condition (expensive replacement), and observe the walls and ceilings for settlement evidence.  If the home is more than 5-6 years old, the settlement should have subsided.  If there are settlement cracks of more than 1/4 inch, it could be the result of foundation problems.  

KITCHEN:  This is a another good place to evaluate maintenance.  Look under the sink for plumbing leaks.  Look in the oven for the obvious crud if the seller doesn't have a self cleaning oven or they don't use it as often as they should.  When we see a poorly maintained oven, we can suspect that the furnace is probably not well maintained.  Observe the inside of the refrigerator for broken or cracked drawers and shelves.  These are often difficult to replace and will be a clue that it could be a problem with home inspection repairs.  The buyer will probably be faced with a refrigerator replacement cost sooner than later. 

We continue to walk through the house to observe general condition, but not in as great detail as the kitchen because of the cost of repair/replacement.  We observe the kitchen sink for leaking plumbing because of the risk of extensive water penetration of the sub-flooring and the possibility of mold. 

BASEMENT.  *Look for the high water mark*.  If the house has a basement foundation, we'll want to walk it slowly to look for any water penetration from the foundation or upper level that could indicate mold growths.  If the heating system is in the basement, look for service tags.  We can't always look at the furnace filters, but we can observe maintenance tags.  Heating systems that are not maintained carefully will have a shortened serviceable life span.  Water heaters should be no more than 10 years or so.  Unless they are drained annually and kept at a reasonable setting, older water heaters may have reached the limit of their useful life.  Same thing with heating units and cooling units.  Observe the piping for Polypropylene.  We would write Ploypropylene pipe replacement as a condition of the contract.  If the seller refuses to replace or refuses to credit our buyer with a sum sufficient to replace the pipes after settlement, the buyer probably isn't going to accept the contract and saves the cost of a home inspection. 

EXTERIOR.  Observe the exterior for general grading, standing water, roof, gutters and downspouts, siding, cracks in bricks, cracks in walkways, condition of stoops and windows.  If the roof is obviously at the end of it's useful life, waiting for a home inspector to tell a buyer the obvious will cost your buyer about $500 to learn the obvious.  If the seller won't agree to a roof replacement as a condition of the contract, the buyer can refuse to accept the contract if the seller refused to replace the roof and save the inspection fee. 

All of the above is an overview of "showing a home".  When dealing with a FSBO, it's important to do a slow thorough examination (not inspection) of the house.  Unlike a represented seller, the seller will have no source for advise with respect to property condition, inspections, replacement costs, comparable pricing, etc.  They have chosen to be their own counsel.  It's important for the Buyer's Agent to keep any observations with or without the house confidential between you, the Buyer's Agent and the Buyer.  The seller, by their own choice is alone. 

WHY ARE WE SO CAREFUL WHEN TOURING A HOME?  Because, when showing a FSBO, the seller doesn't have the benefit of a listing agent's advice.  It's often difficult to get repairs made pursuant to a home inspection.  If the house needs a new roof, it's probably better to make a roof replacement prior to settlement a condition of the contract.  Waiting for a home inspector to tell a buyer that the house needs a new roof isn't always helpful because, if the roof doesn't leak, it's not really a matter than is going to be easily remedied in a home inspection.  A careful examination (not inspection) of the house will help you advise your buyer about offering price based on (1) asking price, (2) condition and (3) comparable value. 

SELLING FSBO LISTINGS is more complicated than a listing with a represented seller.  The last thing you can do is give agency level advice to the seller.   You'll want to recommend that your buyer have a home inspection.  However, if the house shows significant defects that would affect the value, cause significant risk for after settlement costs, you're buyer may want to pass on this house.  If your Buyer still want the house, you have the condition information for pricing.  All in the day's work of a good Buyer's Agent. 

We will deal with the seller honestly and truthfully.

We will advocate for our buyer/client.