Experience You Can Trust

BE CAREFUL WHAT YOU SAY – BE CAREFUL WHO YOU HIRE.

BE CAREFUL WHAT YOU SAY – BE CAREFUL WHO YOU HIRE.

When do negotiations on your home purchase really begin? Maybe you have never thought of this, but after you spend a couple of hours with your agent, then have lunch, on the way home I know what you do. You stop at open houses. Maybe your agent is ill or gone for the day and you pop by some open houses and chat with the listing agents. Remember that the listing agent represents the seller, not you. Be careful what you say to the agent if you like the house at all. Why? Because if you decide you like the house the agent can relate whatever he learned about you to his seller. Conversely, if the listing agent begins to reveal the motivation of the seller then maybe you can use that to your advantage. If you choose to work with a listing agent directly then know that he is NOT representing you UNTIL you sign a dual agency agreement. Up until that time “anything you say may be used against you.” The state of California, along with most states, has agency rules and disclosures. Dual agency is legal and can work well if the agent follows the rules, but it can also backfire if the agent is unethical. Agency in a normal transaction is spelled out very clearly as to who is representing whom. There is no doubt. Also the rules of agency are clear. All Realtors owe “honesty” to all parties but they are NOT supposed to reveal the motivation of their client, as that may put their client at a disadvantage in negotiations. If the client...

What does it mean to purchase a home in “as is” condition?

The term “as is” has changed somewhat over time. It is also used somewhat differently in REO (Real Estate Owned by the bank) and institutional real estate sales than it is in the normal standard residential property sale. I find that the public is often confused about this issue. You would have to be living under a bridge somewhere to not be aware of the real estate downturn of the last few years and the resulting rise of distressed property sales. Savvy investors and lucky buyers started buying distressed properties before the bottom hit and the pool of real estate buyers increased dramatically. When a buyer purchases a bank owned (REO) property the bank usually has a lengthy addendum which spells out the “as is” terms. The bank means what it says. It typically would make NO REPAIRS. There would be NO TERMITE repairs done. In addition there would be NO SELLER DISCLOSURE of property condition. Buyers do have a short contingency period in which to back out of the contract. REOs and short sales have fallen to only about 3% of the inventory today. Today the California Real Estate Purchase Contract reads (page 4 paragraph 9) this way. “…unless otherwise agreed to, the property is sold in its Present Physical Condition (As Is) as of the date of acceptance.” The sale is also subject to buyer investigation. The seller (on properties of 1-4 units) must fill out certain statutory disclosures and provide them to the buyers. Also anything negative that is discovered by the seller during the time of the contract must be revealed by the seller as...