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Agents Disclose, Not Diagnose

By
Industry Observer CalDRE #01165532

Agents Disclose, Not Diagnose

"seldom can it happen that something is not a little disguised, or a little mistaken" 
                                                                                                                                - Jane Austen

When taking a new listing, I feel it best to have the sellers complete all of the required disclosures upfront.  It prepares them for the sale and readies them for their move forward.  

In California, we have many disclosures as well as specific disclosures depending on county or city requirements.   How do you explain to clients their duty to disclose?  We have been advised by our legal counsel to tell clients "when in doubt, disclose", "disclose, disclose, disclose" and "what would you want to know about this home if YOU were the buyer?".  Of course, there are more but you get the idea.  

How do you handle your own inspection disclosure when you represent a buyer and/or seller?  It is required that agents complete their own visual inspection of a property when it is sold in the state of California.   This can be completed on the transfer disclosure or on an agent visual inspection disclosure depending on the type of transaction.  

Remember real estate agents are not, albeit with some exceptions, contractors, geologists, attorneys.   A Realtor should not identify that crater-like crack on the concrete drive as "cosmetic", "small" or "large" or "normal from settlement".  It's a crack.  Realtors should recommend the buyers find the answers through the professional in that particular field.

Agents Disclose, Not Diagnose

Michael Jacobs is a Realtor in the Pasadena/San Gabriel Valley as well as the northeast foothill communties within the city of Los Angeles and can be reached at 818.516.4393 cell or michaeljacobs@coldwellbanker.com.   

agents disclose, not diagnose

Posted by

Michael Jacobs

 

CalBRE # 01165532

P. O. Box 587

Pasadena, CA 91102

Call/Text:  818.516.4393

mtj916@gmail.com

 

 

Donne Knudsen
Los Angeles & Ventura Counties in CA - Simi Valley, CA
CalState Realty Services

Michael - I like you!  You sound like one of the good ones!  Unfortunately though, you and I both know that the way you operate and work your listings is not the way all Realtors/agents operate or work.  The scenario I brought up is an all too common one: buyers get an inspection, inspector shows them a property condition where a recent mickey mouse repair was done in an effort to avoid having to fix a bigger problem.

Buyers and their agent question sellers and their agent about why the repair wasn't disclosed.  Sellers say they forgot or worse, play dumb.  Buyers become extremely suspicious and trust in the sellers and their agent starts to waiver.

Buyers request repairs and offer inspection report as verification of repair needed.  Sellers agent refuses to accept inspection report and some morons agents have even indicated that they don't want the report because then they would have to disclose it.  Buyers trust in sellers and their agents flys right out the door and buyers walk.  Transaction cancelled.

And sellers and their agents wonder why buyers have such low opinions of them. 

Aug 13, 2011 09:18 AM
Donne Knudsen
Los Angeles & Ventura Counties in CA - Simi Valley, CA
CalState Realty Services

On another note though, I had never heard the 99% figure either but I have heard that false and fraudulent TDS are a huge source of DRE investigations and pending lawsuits from buyers towards sellers. 

Aug 13, 2011 09:23 AM
Michael Jacobs
Pasadena, CA
Pasadena And Southern California 818.516.4393

Hi Donne -- Thanks for your comments.  I/we can only run our business as we see it should be run and it is sometimes frustrating to see how others practice and as you have stated, how it effects our industry.

I think of my clients and will point out potential issues as we tour the home, during the inspection processs, the disclosure process, etc --- I gently tell buyers "not everyone is going to be aware of their home to the same extent as you may".   I point out red flags, suggest they request additional information, complete inspections --- we can only do what is in our power.   

I once had an agent ask me to modify my agent visual inspection(given to her and the buyers as part of a counter offer) because it made the house look like too much work for her first time homebuyers.  The house eventually closed with those buyers.  Funny, when the buyers became sellers a few years later, they did not use her to sell it.   Karma, huh?

Aug 13, 2011 09:55 AM
Norma Toering Broker for Palos Verdes and Beach Cities
Charlemagne International Properties - Rancho Palos Verdes, CA
Palos Verdes Luxury Homes in L.A.

Michael - Our corporate attorney is not fond of adjectives--just nouns without any embellishments.

Aug 13, 2011 11:16 AM
Michael Jacobs
Pasadena, CA
Pasadena And Southern California 818.516.4393

Exactly Norma --- don't say cosmetic cracks, it's a crack.  Don't say minor slope, it's a slope in the floor .... very good advice from your corporate attorney.  

Aug 13, 2011 11:29 AM
Dale Baker
Baker Energy Audits and Commercial Properties Inspections - Claremont, NH
New Hampshire Relocation Real Estate Information

Howdy and evening to you Michael

Michael, it sure is best for folks having their listed to be sure to disclose everything about the home. If they don't its sure to bite them in the backside.



Have a good one
Dale in New Hampshire

Aug 13, 2011 01:09 PM
Michael Jacobs
Pasadena, CA
Pasadena And Southern California 818.516.4393

Hi Dale -- full disclosure is the best way to act when selling your home.   

Aug 13, 2011 03:18 PM
Robert Hammerstein -
Christie's International Real Estate - Hillsdale, NJ
Bergen County NJ Real Estate

Michael - Disclose Disclose Disclose... We can't say it enough... It's gonna come up in an inspection period... Good post Michael.. 

Aug 14, 2011 05:14 AM
Michael Jacobs
Pasadena, CA
Pasadena And Southern California 818.516.4393

Lisa and Robert -- disclose, disclose, disclose --- it is certainly a mantra that should be part of every agent and seller's protocal. 

Aug 14, 2011 07:17 AM
TODD PICCONI INLANDEMPIRE & SOUTH ORANGE COUNTY, CA
TODD PICCONI REAL ESTATE - Dana Point, CA
Personal Engagement,Precision, and Professionalism

Michael,

this is such a great point to remember....nice driveway by the way.  Have an awesome day and keep up the great posts!

Aug 14, 2011 09:35 AM
Dawn A Fabiszak
Private Label Realty ( Denver metro area, Colorado - Aurora, CO
The Dawn of a New Real Estate Experience!

Michael ~ I like your title, Diagnose or Disclose.  I think that says it all.

Aug 14, 2011 11:29 AM
Michael Jacobs
Pasadena, CA
Pasadena And Southern California 818.516.4393

Todd - so what do you think caused those cracks?  Great question.  Let's ask an expert......

Dawn - we can disclose what we see, let the experts diagnose.  We need to make sure not to analyze or characterize.  As Sgt Friday says, just the facts.  

Aug 14, 2011 12:13 PM
Dale Baker
Baker Energy Audits and Commercial Properties Inspections - Claremont, NH
New Hampshire Relocation Real Estate Information

Howdy and evening Michael

Michael,
I wanted to stop back by your blog post to say Congrats to you!

Have a good one
Dale in New Hampshire

Aug 14, 2011 01:34 PM
Michael Jacobs
Pasadena, CA
Pasadena And Southern California 818.516.4393

Thanks for stopping back, Dale  

Aug 14, 2011 03:07 PM
Pamela Seley
West Coast Realty Division - Murrieta, CA
Residential Real Estate Agent serving SW RivCo CA

Thanks for your post which I found by way of Donne. I didn't know 99% of TDS is a source of fraud investigations and lawsuits! I agree we as agents in our AVID are to observe and note, not diagnose. I take digital pictures, dated and time stamped. If I note anything like "2-inch hole in drywall," I take a picture of it and everything else. I keep the pictures on my computer along with my AVID. If there is any question later I have it to reference.

Aug 14, 2011 06:56 PM
Michael Jacobs
Pasadena, CA
Pasadena And Southern California 818.516.4393

Thanks for stopping by Pamela(isn't Donne great?).   I wasn't aware of the 99% number either -- Kristin Hamilton from KW Redlands mentioned she heard it at a legal seminar.  I like your idea of taking photos along with the AVID sounds like a good thing to keep in the file.  When you are representing the buyer do you ask for permission from the listing agent and/or sellers to take photos?  

Aug 14, 2011 07:08 PM
Florence Foote
Keller Williams® Realty - Topanga, CA
Realtor, real estate agent
I like the idea of taking pictures to support the AVID!
Aug 15, 2011 03:48 AM
Michael Jacobs
Pasadena, CA
Pasadena And Southern California 818.516.4393

Florence, we are on the same page regarding including photos in the file as a reference to the AVID.

Aug 15, 2011 03:52 AM
Pamela Seley
West Coast Realty Division - Murrieta, CA
Residential Real Estate Agent serving SW RivCo CA

Michael, yes, I do ask for permission, unless it is an REO.

Aug 16, 2011 05:37 AM
Michael Jacobs
Pasadena, CA
Pasadena And Southern California 818.516.4393

Thanks for checking back and your response, Pamela

Aug 16, 2011 06:53 AM