Monday, July 28, 2014

Every home has a story

From page HS3 | March 14, 2014 |

Matching up buyers to the right home is a journey of discovery. Every experience in the home-buying process is new and different because every situation is so unique. That’s what makes the process interesting.

The first discovery for an agent is finding out who the next buyer will be. Much of a salesperson’s time is dedicated to finding the next client. Perspective homebuyers are not usually waiting in line at the real estate office to preview and buy homes. They are busy with the priorities of their life and perhaps comfortable with their housing status quo. Being shuffled around the county looking at other people’s homes may not be their definition of fun. Finding buyers who are sufficiently motivated to buy is an agent’s first challenge.

Once a buyer is located, the next step is to discover if they qualify for loan and which loan program most suits their needs. A few years back this was a pretty simple process. Most agents could ask a few basic questions about a buyer’s monthly income, debts and the amount of savings they had available for their down payment and pretty much match the buyer to a loan program. Today the complexity of the loan process is beyond the experience level of most agents and so a mortgage professional must be engaged. This process, once quickly handled by a phone call, can now take weeks.

Once a preliminary loan approval has been obtained, the next discovery that both buyers and their agent will embark upon is finding an acceptable home. That’s likely the most difficult and time-consuming step because often the buyer’s expectations don’t match their budget. It’s not that there aren’t suitable homes available, there are, but the buyer’s selections all seem to be in a higher price range. And so it is an educational process acquainting buyers with market values and helping them adjust their expectations.

One day this search ends. The buyer’s expectations finally match with an acceptable home. After the buyer’s offer has been accepted and escrow has been opened, the buyer normally has 17 days or so to fully investigate the property to be absolutely sure of its condition before moving forward with the purchase. At this point most buyers stop looking at other new listings and focus instead on a series of property inspections, completing the loan qualifications and preparing to physically move from their existing residence into their new home. While termite, roof, well, septic and home inspectors are examining the home’s current condition, this is when an agent should begin making inquiries into the home’s past history because every home has a story.

There is a risk when a buyer’s agent begins an investigation into the history of a home. Whatever the agent discovers should be conveyed to the client. Agency law requires the buyer’s agent to make a visual inspection of the property and disclose issues that may affect its value. The agent normally has no duty to investigate further than what is easily ascertainable. For that reason, most agents don’t going snooping into the background of a home. They should.

Real estate agents may not be experts at examining exceptions listed in title reports or offering their opinion on county building permit compliance but they should have greater knowledge about the subject than clients whom they represent. A buyer’s agent should be an experienced guide through the home-buying process and help the buyer discover more about the home than a leaking faucet.

Required building permits are an example. The seller is required to disclose if they have performed any work on the home without obtaining required building permits from the county. But what if they don’t? Perhaps they simply forgot or the improvements were performed prior to their ownership. Shouldn’t a buyer’s agent check with the county and double check that the room addition was permitted? Most don’t.

Between the initial discovery and escrow closing, buyers typically drive by or visit the home they have selected a total of five times. How much information about the neighborhood can be obtained from a five-minute drive-by or while following a home inspector around the house for two hours? Homebuyers and their agents are naïve if they assume they can depend upon sellers to accurately disclose neighborhood nuisance. Sellers are not necessarily being dishonest with their silence; their definition of a neighborhood nuisance may simply not include the loud garage band next door or the halfway house across the street. Visiting with a few neighbors and asking some questions about the neighborhood can be revealing.

I have found sellers a great source of information about their property. After all who would know more? Most agents representing sellers (listing agents) discourage direct contact with the buyer but I welcome the opportunity. Sellers willingly share their history in the property, information about the neighbors and improvements they have made.

The more information clients have about a home they are buying the more comfortable they feel about the process. Rarely does the discovery of an adverse issue derail the transaction. Buyers understand that every home and neighborhood has issues but they want to know about the crazy lady down the street and the unpermitted barn before, not after they sign the loan documents.

Ken Calhoon is a real estate broker and can be reached for questions at





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