Do You "Disclose" a Home's Obvious Deficiencies in Your Marketing?

Jennifer,

As one who works almost exclusively with buyers. I would definitely agree with a couple of your initial respondents (Martha & Susan).

The fear of the unknown can be greatly minimized by having the professional assessment by a foundation available, for those who are otherwise hopelessly in love with the property.

After all, things might actually be "less bad" than the conclusions the "nervous nellie" buyer might automatically jump to. Living in the north Texas clay soil, the foundations have either previously cracked, are currently cracked, or will almost certainly crack sometime in the future! :0)

Great thought-provoking post (as usual) !!!

It depends. If it's a relatively minor issue I put a note in the agent remarks and quotes for repair in the attached MLS documents with printed copies in the home so prospects can see that the repairs might not be as huge a deal as they will otherwise only imagine.

That said, if the home needs a new roof or a major repair, I would put that in the public remarks together with the estimated replacement cost. There is absolutely NO point in attracting a buyer who cannot afford the repair.

Best option is to have the owner make the repair before listing the home but that often isn't possible in today's economy.

Phil, Broker-Associate

Yes!  In this case, I would know that the price was going to give the listing a lot of attention.  Then, like you said, there would be a huge let down when the home was viewed and the obvious flaw was discovered.  It's VERY hard to recover from this emotionally and get excitement back. 

So, I would, in a short sentence, have said, "The low price reflects the fact that the home needs some structural work." Or something to that degree.  Then, I know the buyers (and agent) would be prepared before walking in the home and falling in love.  And, I would make available, any information I could about the flaw and any research we'd done about repairing it.  But I would definitely want to share this information---at the very least with other agents---BEFORE they took the time to bring their clients over. 

I have two main objectives when it comes to marketing property:

1. The whole purpose for marketing a property IS TO GET AN APPOINTMENT.  It's not to tell a potential buyer everything there is to know about a property.  The purpose is to entice a buyer to want to know more and want to see more.  I try to do this by keeping descriptions short and sweet and using lots of key words.  I also try to take photos that are attractive, clean, but not unrealistic.  This is also where I will disclose something that needs to be, but the disclosure will be very short and simple with a suggestion to call for more info. 

2. When the appointment is made, and the buyer sees the property, my goal is that the property IS BETTER IN PERSON than it was in the marketing.  So, here's why it's important not to overpuff or unintentionally mislead people.  It's also important that the photos were not too nice (nicer than the property).  I want the buyer walk away having had a positive emotional response to the property.

I agree with Susan H. - address it as creatively as possible without scaring people away.  I have this issue right now with one of my listings - some of the people who have toured it "think" it's on a "busy" road so they've passed it over - I have since included in my MLS comments the fact that the road is filled more so with bike riders and joggers and also becomes one way in this particular area so the amount of cars is decreased.  I didn't go in to it too deep but, hopefully, enough to address it and move on.

I had a listing a few years ago with a dodgy front porch--sloping, big cracks. We had a structural engineer conduct an evaluation and made his report available to prospective buyers. We also received some rough (non-binding) bids from various contractors about what it would cost to fix.

Turns out that the porch was not in immediate danger of falling off the house & in fact could have many yrs of use & the cost to make the repairs was not that expensive. By doing this, we just took the uncertainity out of the equation for buyers.

I try to let defects in my listings show in the pictures.  If something important can't be conveyed in a photo I use something like the statements already described to draw attention to it without trying to make it sound really scarey.  Too often I see agents' listings that have major issues that are not disclosed in the pictures or in the comments.  I get calls from buyers that say "This house is perfect!" only to respond that it isn't (for whatever reason I know about because I've seen the house).

If the Seller disclosed it on the condition report, and that document is posted online, the agent shouldn't need to make remarks. If the problem can be shown in a photo as part of the property, that should clue the buyer in prior to them making the appointment. I would encourage the Seller to have an expert's report available to post online with the MLS listing and have copies available as well. Many times a buyer thinks a problem is 3 times more expensive than it actually is, and a qualified expert can put their fears to rest - if given the opportunity.

Thanks for giving us the ending to your story! I was wondering how it finished. I like the ideas of having it in the note section or speaking for itself in the pictures. Sounds like once you started bringing it up earlier you found more success.

I was just reading some of the previous posts and I like what you said about having a sense of humor.  I appreciate that when I'm reading marketing text.  We are in rural southwest New Mexico and these are some disclosures I've seen and written lately:

"Gorgeous views, but road is not for the faint of heart.  Call me if you need a 4 x 4 and I'll drive."

"Wonderful southern exposure.  Perfect for building your solar-powered home. No electricity available."

"Officially a 3rd bedroom, but might serve better as a utility room."

I could keep em' going, but I'll stop here.

Thanks for sharing your dilemma and solution, Jennifer. It seems that setting the proper expectation prior to viewing was the successful approach. (Congratulations on selling the home!)

Jennifer - I have not had the opportunity to have a listing like this, other than tough sellers like a probate client, but even at that I would put it in the agent remarks and state the obvious. Disclose disclose disclose.

I also would do as a few mentioned to market it as a contractors dream, or a fix-it to make it a dream home or an FHA203K opportunity.