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When Your Buying & Selling As-Is

December 23, 2019 by bzawaski

Buying Selling As-isWhen your Buying or Selling a home the term ‘as-is’ will probably come up. What exactly it means will depend on who is making that interpretation and how that benefits them. Sellers who are steadfast about not doing repairs or multiple offer situations can be determining factors. In either case, it’s important that neither party feels compelled by those factors to do what they ordinarily wouldn’t.

Sellers may want to make it clear in writing that they won’t be participating in making repairs or providing credit allowances. Most sales agreements include as-is provisions & inspection clauses that may already be pre-printed. It’s important to carefully address your desire to sell as-is without eliminating the buyer’s rights to any written representations. State required Property Disclosures or Federally mandated lead disclosures, in the case of pre-1978 homes, are required. Whether or not a Buyer fully inspects the property or waives that right is something both parties should cautiously approach. It would serve the Sellers’ best interests to allow any potential Buyer the opportunity to fully inspect their property.

In the event, a Buyer chooses to waive that right it should be in writing. Waivers should be based upon the buyer knowingly and voluntarily electing to waive that right. Private parties should seek legal counsel when preparing a sales agreement. Licensed Brokers should avoid altering any pre-printed language to suit Sellers’ wishes to drive home a point without first consulting legal counsel. It’s easier to simply stay within your lane and not make changes to legal terminology already in place. 

It’s not always a clear path despite one party or another laying the ground rules. As-is means different things to different people. It’s not uncommon for a Buyer who discovers a “big-ticket item” to take pause. Sewer lines & underground fuel tanks are often met with “I didn’t mean to include that in my as-is offer”.  Of course, the Seller is not obligated to change the terms & conditions as originally agreed to. On the other hand, not coming to an agreement may mean the sale won’t close. Sellers should consider their potential liability for dealing with certain issues, despite any previous no repairs stance.

In the case of an abandoned underground fuel tank, there is no statute of limitations. I’ve had this conversation with many Buyers & Sellers over the years and there is plenty of potential liability to go around for passing along this issue. In Oregon, a DEQ (Department of Environmental Quality) Certified contractor is required to report leakage within 48 hours. Sellers must take responsibility but, what about a situation where both parties agree to sell without further testing? The Seller may feel it’s the Buyers’ responsibility going forward.  What if the Buyer were to lose the house to foreclosure and disappear? With no statute of limitations, the Government can bypass owners to the next in line, the Seller. The Government will pull out all the stops to locate past owners. Banks who foreclosure are exempt & can sell without the tank being decommissioned thus, truly as-is.

There are lessor issues dollar-wise that a Seller should also consider despite any previous ‘no repair’ stances. Where CO & Smoke alarms are required saying I won’t do it or simply handing them over and saying “You do it” is short-sighted. If that potential buyer simply didn’t get around to installing them and is injured or perishes in a fire there is something to be said for that Sellers’s liability. Even a somewhat minor issue could have negative ramifications down the road thus, counsel from your Broker should always be sought before simply saying no.

In a recent condo sale, we were advised that a dryer duct had dislodged from the roof vent. It may have subsequently contributed to the fungi growth on the sheathing. Ducting from the interior space had been accidentally cut, that too may have been a contributing factor. Might the Association consider the latter as a contributing factor to their fungi issue? Despite the duct being within the Association’s domain consideration was given to simply replacing the entire duct. 

In a hot market, Buyers will oftentimes want their offer to stand out. In order to stand out, some will opt to waive their inspection rights. It’s important they’re not given the impression or feel compelled to do so by the Seller or their Broker. As the cost of repairs & maintenance takes their toll Buyers may second guess waiving an inspection. In a Real Estate transaction, all things must be in writing but, they’re only as good as the parties involved. Good verbal communication along with the appropriate written language will protect both parties’ interests.

      Bob Zawaski P.C., G.R.I.

Oregon Licensed Principal Broker

 Investors Trust Realty

 

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Filed Under: Buyers, Houses, Investment Properties, Real Estate Best Practices, Real Estate Education, Sellers Tagged With: as-is, Buyers, buying, real estate, Real Estate Agents, Real Estate Sellers, Sellers, selling

Selling Your Home and Buying Another

November 10, 2017 by bzawaski

Selling your Home and buying another can be a challenge, especially in a market with inventory of just 2.3 months (the amount of time it would take to deplete all listings if no new listings were added) as is the case here in the Portland, OR metro area.  Inventory below 6 months is indicative of an appreciating market thus, 2.3 would suggest it’s a Seller’s market. Despite very little change in inventory from the last time I blogged on this issue (September of 2015 when it was 1.9 months) in Transitioning Between Houses we’ve come a long way in bringing back the simultaneous closing of one house to another that was common place a decade ago. 

Transitioning Between Houses

Transitioning Between Houses

 As is the case with the Stock market where sentiment towards the events of the day shape its ups & downs,  Real Estate is not solely reliant upon Buyer’s & Seller’s simply taking statistical market data at face value. The slight gain in inventory we’ve seen in September of 2017 versus that of 2015 would suggest we should be going at roughly the same level of appreciation yet, we’re clearly not. The typical slowing down of the market that we see mid-summer seemingly came as no secret to buyers this past year thus, their sentiment was heard loud & clear. Price reductions, discounts and repair negotiations became more common place then in the last two years. That’s not to say that we’re headed in a rapid decline but, perhaps a correction of sorts after a couple of years that saw Portland as one of the leading major metropolitan areas in appreciation. Does this mean Seller’s will be more receptive to Contingent offers ? Perhaps in some cases they will but, there has been some changes on the lending side of the equation that may give hope to those who have little or no reservations about selling their Home but, wonder if they can find a replacement home when they become buyer’s themselves.

The stumbling blocks to bridging the gap have typically included expensive Bridge loans or  a refinance with all the costs & fees in order to rid the borrower of the ‘temporary’ financing utilized in order to circumvent buying in a Seller’s market. As for whether we are still in a Seller’s market or witnessing a correction remains to be seen but, certainly lenders have created products in response to the needs of today’s borrowers. According to the National Association of REALTORS 68% of buyers are buying a home at least for the second time thus, one would assume many of them have a home to sell. Although much more than a stop gap measure, Guild Mortgage lender John Bruce has successfully linked several of my clients with the Guild 1% Down program as an alternative to those who might be cash strapped yet, want to purchase their next home in advance of selling their own. With market rates and competitive Mortgage Insurance the borrower truly has an option that includes keeping this loan in place as opposed to viewing it as an expensive temporary measure such as a bridge loan or traditional refinance. In addition, a recast or virtually cost free version of a traditional refinance after a purchase allows those whose qualifying numbers might be too tight and/or cash for a down payment is problematic, without selling first. Of course, flexibility in underwriting has also created opportunities for borrowers where none may have existed just a couple of years prior.

Having the resources available from the lending side, as well as a thumb on the pulse of the market from the Brokers side are what we bring to our clients at Investors Trust Realty .

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Filed Under: Buyers, Houses, Moving, Real Estate Best Practices, Real Estate Education, Sellers Tagged With: blog, bob zawaski, Buyers, Investors Trust Realty, itrustblog, itrustrealty, real estate, Sellers

What Buyer’s should know about Broker referrals

December 29, 2016 by bzawaski

What Buyer’s should know about Broker referrals…

Ask any Broker about referring Lenders, Home Inspectors or Contractors to their buyer clients and you’ll get a wide range of answers from referring several for each trade, referring just their most trusted individual to not referring anyone at all. The one common thread among those three points of view is the Broker’s concern for his/her liability. Of course, the buyer simply wants to hire someone with expertise to help them obtain a loan, inspect a house or make repairs so, should the Broker’s issues with liability be a concern for the buyer ?  Unfortunately, the answer is yes but, how your Broker deals with walking the fine line between being a resource for all your needs and protecting his/her liability will determine whether you’ll have a good working relationship and be able to accomplish your goals. This is certainly a question you can pose to any Broker you may be considering to work as your Buyer’s Agent before hiring them.

Why should a Buyer be concerned with the Broker’s potential liability…the short answer is because in an Agency relationship your Broker’s liability could become your liability. You’ve hired someone to represent you thus, what they say and do in that capacity may have unintended consequences for you. Regardless of which point of view a Broker takes in regards to providing referrals or not, if they’ve made that decision with the intent to protect all involved from the harm of potential liability then they have served their clients well. Of course, there still is that fine line between potential liability and providing a buyer with high quality service.

In 20 + years I’ve observed Broker’s not only practice one of the three above referenced points of view in regards to referrals but, some pretty unique defenses of those positions as well. It’s common place to hear Broker’s say they always refer “3” of every trade but, all too often it’s followed with some sort of disclaimer that they’ve now cleansed themselves of any liability by doing so. There is also a saying that goes “your only as good as the last name on that list” thus, the client still got the names from the Broker so, if one goes bad then who is to blame, the buyer for making a bad selection or the Broker for providing the names ? In many cases the buyer’s are glad to have three names from which to choose and things go just fine however, there are buyer’s who require more pinpoint direction and that means being guided to the sole individual expert who’ll solve their issue. To this type of buyer, 3 names may be looked upon like handing them the yellow pages and wishing them good luck & that leads us to Broker’s who proudly state their “no referrals” policy. I try to put myself in my clients shoes whenever possible and I can’t imagine how stressful it would be to be left on your own to trust a total stranger to take you thru a crucial point in a transaction. Needless to say, I’m not in the camp with either of those Broker’s who would provide multiple names or leave you on your own. I just closed a transaction wherein my buyer’s & I encountered a seller who had just went thru a sale fail that included making repairs to his roof which were improperly done…it factored in that deal terminating, as well as being an issue when our inspector called out the improper repairs a second time. This was a situation wherein the seller simply searched on his own to locate a roofer & unfortunately, it didn’t fare well. Having had the rare opportunity to meet the seller in person,  I was taken back by his obvious embarrassment for what had happened previously. It’s a situation such as this that confirms my belief that I will continue to provide only the most trusted individual lenders, inspectors & contractors to my clients. Brokers are only permitted to share referral fees with other Brokers, not lenders, Home inspectors or contractors thus there are no financial incentives, other than providing a valuable resource to the client.  I constantly review records & information on all trade referrals to ensure that anyone I refer to a client would be the same individual I would trust in my own home.

Although most Real Estate Broker’s are not experts on home inspections or construction we do have an obligation to our clients to have sufficient knowledge to address issues related to buying & selling property, including providing information that may require more advanced expertise from Attorneys, CPA’s or Contractors etc. It would be very difficult, if not impossible, to understand when those ‘next steps’ are required if a Broker essentially removes him/herself from a transaction by not taking part in all the issues that effect a client, such as when & who to hire in addition to the Broker

Bob Zawaski P.C.

Oregon Licensed Principal Broker

Investors Trust Realty

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Filed Under: Buyers, Home Repair & Remodeling Tagged With: bob zawaski, Brokers, Buyers, itrustblog, itrustrealty, Referrals

About Us

Bob Zawaski G.R.I., S.R.S., A.B.R., S.F.R.,  e-Pro I take a truly consultative approach to working with my clients to ensure satisfaction. I start by defining your needs and objectives. Whether you are looking for your first home or looking … Read more...

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Bob handled the purchase of a home we own with our daughter a little over a year ago...and he did an amazing job. Would recommend him highly for his easy going personality, professionalism and knowledge skills, but mostly for his integrity...which goes a long way with me!

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