Monday, November 7, 2011


Nuggets For The Noggin
Dodging Bullets
By Jim “Gymbeaux” Brown, November 4, 2011

There are two ways to “dodge bullets”; one is to be quick on your feet and learn to “bob and weave”;  the other is to avoid being shot at in the first place. 

The later is the best way to handle objections as well; address them first and early in your conversations before they are brought up by your customers.

Teaching moment:  Imagine writing an Agreement to Purchase on a home that is about 20 years old.  At some point in time three major events occurred during the life of the home; Hurricane Katrina, an addition being added to the back of the home and energy efficient windows being installed.  

These should be “red flags” for YOU and YOUR buyer?
  • Katrina, was there any damage, did it flood, was there any mold in the home, was the roof replaced, etc.?  These conditions are typically addressed in the Seller’s Property Disclosure and Mold Disclosure forms.
  • Windows.  Most windows are installed and come with a warranty.  The more expensive windows usually have a longer warranty.  In this case the windows were installed approximately 10 years ago.  Several of the windows have leaks between the double pains and moisture has clouded the windows.  You have been told that the windows are covered under their original warranty and the warranty DOES NOT include the installation of a replacement window(s).  The replacement of 8 windows would be expensive for the labor but if the windows themselves are not covered by the warranty, the cost could be in the thousands of dollars.  Logic would tell you to verify the warranty information with the original window company.  It was confirmed that the warranty is still in effect and would cover the replacement but not the labor to install the windows.  Still expensive but not outrageously expensive.
  • Addition:  The addition to the home showed separation and settling of the foundation.  The owners had the addition professionally raised and sealed. 

The Seller’s Property Disclosure and Mold Disclosure were satisfactory to the Buyer.  If these documents were prepared in error, and there is no indication or suggestion that they were, the Louisiana Law of Redhibition would come into play if known defects were intentionally not disclosed.
The windows were in clear sight so even if they were not disclosed on the Seller’s Property Disclosure because they were in plain sight they would not have to be included on the Disclosure.  You and I may not agree with that premise but that is common practice and acceptance.  The buyer had every opportunity to see the damaged windows as did the buyer’s home inspector.  The seller agreed to pay a portion of the labor costs to have the 8 windows replaced and the buyer agreed.  This should be the end of the problem.  Here, however, is where going “three deep” in your questioning can help you avoid “being shot at” as compared to “dodging bullets” after they have been fired.  The window company had assumed that the owners who had the windows installed were still the owners of the home when you asked the question on behalf of your buyer.  The best advice anyone could ever give another is NEVER ASSUME ANYTHING.  In this case the warranty terminated when the home was sold by the THEN owners to the owners of the home now.  Therefore the windows were NOT covered.  This is true with a great many warranties; they are NOT transferrable unless so stated in writing.  Had the agent, in this case YOU, not asked the question in regard to the warranty being transferrable and given there was not sufficient time to replace the new windows prior to the scheduled closing, can you see where this would have erupted AFTER the closing and AFTER the new owner took occupancy?

In regards to the additional room.  The fact that it had settled is not that unusual but that fact should raise an additional red flag.  Who added the room?  Was it added by the homeowner or did a professional contractor add the room?  More importantly, was the addition properly permitted when built and was it properly inspected?

To demonstrate how this could affect the sale I use my own home.  I was aware that I was purchasing a home that had a serious fire and the owner had converted the home from a one story to a two story.  I purchased the home at a time when Seller’s Disclosures were not in play and it was more of a “buyer beware” attitude throughout the real estate industry.  There were two skylights in the den area which were not part of the second floor addition after the fire.  There was no reason to think that the skylights were improperly installed.  I had lived in the home for more than 25 years and the skylights had not leaked until very recently.  The skylight flanges had rusted and required replacing.  Upon installing the new skylights, the installer pointed out that one of the two skylights was not installed according to building codes now or at the time they were installed.  The choice was to replace the window with no warranty or rebuild the roof removing the skylight entirely.  Apparently the second skylight was built too close to a roof valley vastly increasing the odds that it will eventually leak as it did.

On a related issue, it is only a matter of time before someone gets seriously burned by not conducting thorough walk-thru inspections prior to closing or leasing of properties.  You owe it to your owners of your listings (both for sale and for lease) AND to yourself by validating the condition of the property before transfer of ownership or renters moving in.  How can you possibly arbitrate damages to the property when discovered after possession if not addressed prior to possession?  You cannot!  In the age of digital cameras it is so easy to take a lot of photographs and file them on very inexpensive flash drives.  Then when an issue rears its ugly head, you have proof of the condition of the property prior to possession.

If you want to avoid rounded shoulders and a flat head, learn to think outside the box, ask a lot of questions.  When you think you have asked all the questions you could possibly ask, think again, ask more questions.

What is with the “rounded shoulders and flat heat” remark?  Question:  Why do REALTORS have round shoulders and flat heads?  Answer:  When you ask them a question they shrug their shoulders.  When you tell them the answer they slap their forehead. 
Learn to avoid being shot at
so you don’t have to dodge the bullets later!

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