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Listing Shenanigans

4,468 Views | 33 Replies | Last: 4 mo ago by AggiePlaya
P.H. Dexippus
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AG
My wife and I have been looking to make the move to Montgomery County onto some acreage, in a neighborhood with good schools, planning on staying for a minimum of 10-20 years. We are pretty picky so have been hunting for a long time (3+ years), and have narrowed our search to a couple of neighborhoods.

At the beginning of June, what appeared to be the ideal lot/house in our price range ($1MM) hit the market and we quickly got it under contract. I knew that in addition to the general inspection, I would need stucco, pool and septic inspections. When we got the inspections back, there were ongoing moisture issues with the stucco, requiring an estimated $15k in repair based on the inspection report, total extent of repairs TBD. Every system associated with the house, save for the foundation and new roof, had major concerns (HVAC, pool, septic, electrical, windows failing, ongoing water leak/moisture issues in walls of the garage, none of the appliances functioning, etc.). The inspection report was 100 pages long with the issues.

The sellers got increasingly sketchy. First, their Disclosures claimed no knowledge of any issues with any part of the house. Not a one. They refused our request for a 10 day option period to accommodate the inspections/repair estimates and insisted on 7 days only. They insisted on closing in less than 30 days. When we got the inspection reports back, the seller's agent requested our agent not forward the reports. We requested that the stucco repairs be completed prior to close so that we would know the extent of damages. The sellers refused, offering only $8k in concessions and no repairs before close. They offered no concessions on any other aspect of the home, claiming all of those issues were already built into the list price- all those issues that were not mentioned anywhere in their disclosures. They again instructed our agent not to send the inspection reports, but I insisted we do that any way, so our agent sent it on the last day of the option period. Even with the reports, the sellers refused to make repairs or increase their concessions or extend the option period. We therefore exercised our option to cancel the contract.

Fast forward two weeks, and they relisted the house today through the same agent for $60k more than when we had it under contract. No disclosures are attached to the listing and there's no way they made repairs. What are the chances they don't disclose our inspection reports to the next buyer?
SteveBott
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AG
Sound like both the realtor and seller are devious and no ethics. They are heads we win and tails we win. Just walk away. You can't do business with these types.

I'm not saying criminals but sure appears they are.
P.H. Dexippus
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AG
Thanks. My head tells me the same thing. Admittedly, we got pretty attached to the property and part of me is just pissed that we missed out on what appears to be a great opportunity despite the warts due to some unreasonable people of questionable ethics. Not to mentioned the wasted time and money.

I cannot imagine any other buyer seeing the inspection reports and buying at that price and without repairs. I don't want them to be able to screw over another couple. Is it common for sellers agents to request buyers agents not provide the inspection report(s)?
SteveBott
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AG
When a realtor does not want the inspection reports it's a huge red flag. Once received they and owners are obligated to note the problems and nir hide them which sound like they want to do. I'd be shocked if the owner discloses the report. Again just not people you want to do business with. They are out there. Not many but you found one.
agnerd
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AG
If people want to be a jerk to you, be a jerk back.

Start mailing a copy of the inspection report/email to the mailing address of the property every 30 days addressed to "Current resident.". Print front and back, 2 or 4 pages per sheet to save money. Include a letter stating you will continue to provide this information every 30 days until the disclosures appear on the listing or the property changes hands according to the local realtor website and appraisal district records.

Gift wrapping a lawsuit for the next owner and a suspended realtor license is usually good motivation.
dallasiteinsa02
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The disclosure issue cuts both ways. Seller lists a house and it goes under contract. Buyer gets a shady inspector and contractors to pretty much condemn the house. The Buyer says if you won't accept the repairs or a price reduction you will have to disclose it to every future buyer. That isn't ethical either.

I had this exact situation happen to us. I had to pay a bunch of people to prove the information as incorrect and then had to disclose the buyer's inspection along with all the backup proving it wrong.
combat wombat™
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AG
I would say that your situation is far less common than a seller not disclosing problems and not disclosing previous inspection reports. I have history with a particular realtor who not only did not disclose previous inspection reports they claimed no previous inspections had been done. When called on it, they claimed they simply forgot and maintain they did not get a copy of the report. A buyers agent has access to information regarding listing history and is able to contact a previous prospective buyers agent to find out if an inspection was done and why a previous prospective buyer might have walked away from a property. You can get a lot of information that way.

The same realtor will also not mark a property as being "under contract - option pending". It goes straight from "available" to "under contract - pending". Because if they don't put it "under contract - option pending" and multiple buyers walk away there's no record of it for future prospective buyers to ask. No red flags.


The new listing allows them wiggle room to allow for price concessions for repairs on future offers.


P.H. Dexippus
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AG
That sucks, I had never thought of that scenario. My inspector was meticulous but did not invent problems. Some stuff was nitpicky but missing gfci protection on outdoor kitchen or diseased trees too close to the house aren't make or break issues. Broken pool heater, chiller, lights, pump and failing plaster are real and expensive concerns. Elevated moisture and/or failing substrate at 16 of 40 stucco sample locations are real and potentially expensive problems.

And we got multiple bids from potential stucco contractors, and they were in agreement on scope and reasonable on price I thought.
CS78
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You chose to sever your interest in the property. Move along.
Absolute
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AG
Struggled with this general dilemma as an inspector on ****show houses over the years. End of the day, I saved my clients from buying it. I know the sellers and listing agents would not change their behavior or disclose. But really, what can I reasonably do?

There are a lot of house back on the market "because the buyer financing fell through" that have nothing to do with that.

But there really isn't a reasonable way to police this.


I even had one that the seller hired another inspector ( crappy inspector) to try and contest all my findings. Sent the report to my client. She sent it to me. It was hilarious.

End of the day, be glad you had a good inspector and avoided the money pit.
agsalaska
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AG
I wouldn't worry about the agent not wanting the inspection report. That's pretty common and IMHO defendable.

THe rest.... Sound to me like they are just hardnosed. If you want the house buy it. If not walk away.
Absolute
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AG
It is also possible that all the issues ARE worked into the price. I have never seen anything that makes me have much faith in disclosure.

Sounds like you got "lucky" by doing your due diligence and avoided a problem house.
P.H. Dexippus
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AG
Absolute said:


There are a lot of house back on the market "because the buyer financing fell through" that have nothing to do with that.



Same thing happened with this property before we got our contract in place. For all we know, the previous buyers' inspection came back negative and wasn't shared with us.
CS78
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Did the inspection really tell you anything you didn't expect. The stucco issues are very typical. Your realtor should have told you that and is the reason they said to get it inspected.

A lot of people have become very soured on the inspection process. Buyers use it to play games and turn the screws to sellers. Some sellers are refusing to participate in that game.

Everyone would be a lot better off if they started viewing the option period as just that. Rather than a chance to squeeze the seller out of as much juice as possible.
combat wombat™
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AG
OR it's a time for a buyer to have the property inspected by a reliable, qualified, reputable inspector to determine whether the repairs needed are significant enough either warrant 1) walking away or 2) further negotiations for a price concession because of needed repairs.

Sellers asking top dollar for a property that is in need of repairs need to be realistic and understand that unless their property is in practically perfect condition, someone might ask for a price concession .
Mas89
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AG
In the 3 years you have been house hunting, you could have built a new custom home exactly like you want.
With no stucco. Do it. All new everything. No repairs or what ifs needed.
Milwaukees Best Light
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AG
Repeat your original offer and attach the old inspection report.
CS78
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The problem is, it's rarely about price and always about "getting my clients a good deal". Sellers could have listed the place 20% less and theyd still have the same shenanigans to deal with after inspections. Buyers and their agents use the system to to apply as much pressure as possible.
dallasiteinsa02
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I think the problem is that option fees are too low traditionally. If it was a larger amount, buyers would see the initial negotiations as the most important. If a home goes under contract and then comes back from option, that would give a ton of information about defects to future buyers.

I have seen out of state buyers go to contract on three or four homes. Come to town and then decide which one they want to move forward with at that point.
CS78
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Great point.

Sellers agents actively seeking to sign backup offers would do a lot to keep buyers honest as well.
P.H. Dexippus
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AG
CS78 said:

Did the inspection really tell you anything you didn't expect. The stucco issues are very typical. Your realtor should have told you that and is the reason they said to get it inspected.


Are you kidding? Yes, stucco can be a problem. No doubt. But there's no way to just visually look at the house (especially one just painted) and determine the extent of substrate issues, if any. You can't accurately determine the extent before you start repairs. We asked the sellers agent about stucco/moisture issues and were told there were none. Clearly this was not the case.

Stucco aside, there were $75k+ in repairs that were not readily apparent from me walking the property. And again, the sellers lied on their disclosures, then claimed all of the undisclosed issues were already priced in. You can't have it both ways.
P.H. Dexippus
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AG
Mas89 said:

In the 3 years you have been house hunting, you could have built a new custom home exactly like you want.
With no stucco. Do it. All knew everything. No repairs or what ifs needed.

True. That's the benefit of hindsight.
Agilaw
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AG
Never rely on the Seller's Disclosure-it's mere information in the purchase process. Have a reputable inspector perform the inspection. Focus more on the major items: foundation, roof, electrical, hvac, etc. Make your decision based on your report. Lots of Sellers don't want to make repairs and simply adjust price. If they don't adjust to your liking, move on. Don't become too invested in a property until it's yours.

The don't provide me the inspection is somewhat common these days since Buyers may be trying to hammer the price down. I don't have a big problem when the Seller agent asks not to provide inspection. Just as often they just want to know where you want to be on price after the inspection.

If the deal sounds fishy, walk away. Shady realtors are usually found out sooner or later.
springagg
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Bonfire97
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AG
Had a similar situation. Looked at a house and had a structural engineer inspect it. Major foundation issue requiring 16 piers. I backed out. Seller relisted and it went pending in a week and closed for full listing price. I am sure they didn't disclose anything. Buyer beware and shame on people for buying junk at top market and not even getting proper inspections done. They create trouble for the rest of us.
eeinoilandgas
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I sold a house 4 years ago where the buyers inspection listed dozens of items as code violations. I happen to deal with these same codes in my job and know they were not code requirements when the house was constructed. I maked as such on the inspection report and sent it back to them.

If I'm so factually incorrect about stating code violations that require repairs in my job, I'd be sued in short order, but for some reason inspectors get to do it every day with impunity. IMO, this is a big problem in the market today just as the poster mentioned above. People claiming code violations that are not code violations causing financial burdens on the accused should be accountable for the harm they cause.
FILO505
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AG
But that still falls on the agents to do the right thing. I got denied a showing because the new buyers were "about to turn in the EM"

Also, I stress the importance of OM and how that shows seriousness. I'm not decades of being long in the tooth in this job, but it's pretty easy to do the right thing
harrierdoc
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AG
So, after 3 years of searching, what made this place THE place worthy of your first offer? Price had nothing to do with it?
AggieStan
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3 years search? Maybe the issue is….
combat wombat™
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AG
It took us two full years to find our current home. We had a list of things we wanted in a home that was difficult to find in the area(s) we wanted. I could buy a three year search if they were being particular.
SteveBott
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AG
As said if you are that particular then you should build and get exactly what you want. Most hate building but there are some that like the process.
combat wombat™
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AG
Or you can be patient in your search. If you want to live in a particular area building might not be a reasonable option. There are a ton of reasons why being patient in your church might be more attractive than choosing to build a home, even if it is exactly what you want.
Diggity
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AG
The inspection report will contain boiler plate statements at the beginning highlighting that they inspect properties to current code. It's not required to bring the house up to current code unless major renovations were done on that particular part of the house.

It's just not feasible for an inspector to research exactly was/wasn't code at any particular time.

The agent(s) should have explained this to you all.
AggiePlaya
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AG
Mas89 said:

In the 3 years you have been house hunting, you could have built a new custom home exactly like you want.
With no stucco. Do it. All new everything. No repairs or what ifs needed.
And within 3 years the house would likely have the same stucco issues and other problems similar to the report
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