Minimize Your Risk, Maximize Your Earning - 1 hour office seminar

1. P R E S E N T S
Minimize Your RiskMinimize Your Risk
Maximize Your EarningsMaximize Your Earnings
Understanding and Recognizing
the Top 10 Property Conditions
that most often lead to disputes in the
Real Estate transaction
*According to the NAR Legal Scan/Legal Pulse

2. FACTS…
According to the 2016
National Association of Realtors
Profile of Buyers and Sellers

3. FACT:
59% of New Buyers rely upon their Agent to point out
unnoticed features/faults with the property
53% of Repeat Buyers rely upon their Agent to point
out unnoticed features/faults with the property
(This ranks as #2 benefit)
#1 benefit is to help buyer understand the process
Source: 2016 NAR Profile of Buyers and Sellers

4. FACT:
92% of homes sold in the
Northeast used an Agent or
Broker (+2% from 2015)
YOU ROCK!!
Source: NAR Profile of Buyers and Sellers

5. Help buyer understand the process 80% 51%
Point out unnoticed features/faults with property 59% 53%
Negotiate better sales contract terms 49% 46%
Provide a better list of service providers (e.g. home
inspector)
39% 38%
Negotiate a better price 39% 35%
Top 5 benefits your buyer
clients want
New Previous
Buyer Buyer

6. FACT:FACT:
80% of claims against brokers
E&O insurance are due to
property related conditions
Effective disclosure helps you earn more
and keep more commissions

7. What is the
NAR Legal Scan and Legal Pulse?
 Legal Scan Published every two years by
National Association of Realtors
 Legal Scan discontinued in 2013
 Replaced with Legal Pulse

8. What is the
NAR Legal Pulse?
 Quarterly newsletter - analyzes current legal trends
in risk management that impact real estate
professionals (nationally)
 Tracks cases and statutes
 Identifies emerging issues and trends
 www.realtor.org

9. 2015 Legal Issues
by Major Topic
____________________________________________________________
Topic Cases
Agency 74
Property Condition Disclosure 49
RESPA 40
Fair Housing 32

10. Property Condition Disclosure Issues

11. Caveat Emptor
The doctrine of “Buyer Beware” is gone….
Replaced by Agent Beware!Replaced by Agent Beware!
Realtors are held to a higher standard
“What do you know about the property” has been
replaced by “What should you know about the
property!”

12. Today’s AgendaToday’s Agenda
• Help you develop an awareness of what to
look for (without turning you into home inspectors)
• Highlight warning signs of possible defects
• Overview of Top 10 Property Conditions that
most often result in disputes
• Common sense rules of disclosure

13. Why is this information important?
Happy, well informed clients, mean more
referrals (and no disputes)
More referrals = more earnings
Minimize your risk by having a greater
awareness and understanding of adverse
conditions

14. Top 10 Property Conditions
Water
intrusion/Mold
Structural Defects
– flooring/walls
Insects/vermin
Septic/sewer
Boundary issues
HVAC
Plumbing
Roof
Environmental
Issues
Electrical

15. Mold/Water Intrusion#1

16. Mold & Water Intrusion
What’s the problem?

17. Mold & Water Intrusion
Is this a problem?

18. It’s Just A Small Window Leak…

19. How Bad Could It Be?

20. Warning Signs of Water Intrusion
Poor grading
Inadequate ventilation
in crawlspace or attic
Cracks in foundation
Efflorescence
Roof stains in attic
Missing roof shingles
Stains on ceilings
Newly painted
foundation/floors
Water stains
baseboard/furniture
legs
Mold
Sump pump
Downspout not
extended
Window rot

21. Structural Defects/Walls & Floors#2

22. Walls/Floors

23. Deck Framing & Support Systems

24. Structural Defects
Some defects are obvious….

25. Structural Defects
….and some are not!

26. Structural Defects
A closer look

27. Warning Signs of Structural Issues
Sloping or sagging
floors
Overly snug fit to floors
and windows
Cracked tile floor
Excessive concrete
cracking and
separation
Alterations without
permits
Sagging beams
Funky
supports/columns
Stair riser/tread size
Crushed sills/joists
Suspicious homeowner
repairs

28. Insects/Vermin#3

29. Bats & Birds Nesting in Attic

30. Powder Post Beetle Damage

31. Termite Mud Tubes & Damage in Wood

32. Warning Signs of Insect Damage
• Termites:
 Mud tubes
 Damaged wood
 Soft spots or blisters
on drywall
Carpenter Ants:
 Frass
 Smooth channels along
wood grain
 Damaged wood
Powder Post Beetles
 Frass
 Small circular/oval holes
 Meandering holes
through wood
Carpenter Bees
 Staining
 Bees hover around
eaves, deck, fence
 Round holes

33. Septic/Sewer#4

34. Sewer & Septic
Where does the water go?
Where does this water go?

35. Warning Signs of Septic/Sewer Issues
Slow sink drains
Toilet flush fills, then drains
Odor in yard – septic breakout
Internal odors
Washing machine (grey water) drained to outside

36. Plumbing

37. Plumbing
The latest in designer plumbing!

38. Some Things Are Readily Apparent

39. Some Not So Obvious

40. Warning Signs of Plumbing Issues
Loose and missing
grout and tiles
Loose toilet
Safety glass at tub or
shower enclosures
Water odors (sulfate)
Aged piping
Leaking drain traps
Reduced water pressure

41. Roof

42. Roof transition Exposed Flashing
Roof Flashing

43. Defective Asphalt Shingles

44. ICE DAMS!!!!

45. Warning Signs of Roof Issues
Age of Roof
Rusted Flashing
Missing, cupped or curled shingles
Stained ceilings
Cracked or missing tiles
Buckets in the attic

46. Environmental Issues
Radon (in air and water)
Asbestos
Lead
Underground Storage Tanks

47. Warning Signs of Environmental Issues
Radon – lack of disclosure, mitigation system not
functioning
Asbestos – wrapped pipes, loose insulation,
vermiculite, aged floor, 6 x 6 ceiling tile
Lead – 1978 or before
UST – cut off fuel lines, new gas, evidence of prior
oil tank, propane

48. HVAC

49. Warning Signs of HVAC Issues
Aged units
No maintenance tags
Odors in house or near unit
Ineffective function – not hot enough, not cold
enough

50. Electrical

51. Panel, Condition & Location Problems

52. Warning Signs – Electrical Issues
Outdated Service size
Panel issues
Exposed romex
Open junction boxes
Extensive use of electrical cords
Aluminum wiring
(primarily used from 1965 – 1974)

53. Best Practices…
Make sure your client understands his/her obligations
under the contract
Explain that he/she has a right to bring in specialists to
investigate the condition of the property
Do not give advice beyond your area of expertise
Point out potential trouble spots and recommend a
Home Inspection
Review Seller’s disclosure and ask for more
information if necessary
Document everything in writing

54. Minimize Your Risk
Make sure the Inspection Companies that
you recommend have:
Errors & Omissions Insurance
Fully licensed in CT/MA/NY
Strictly adhere to the Standard of Practice
Stand behind their inspections
Offer comprehensive inspection agreements

55. Tiger Group Office Seminars
PCD Perils & Pitfalls –
(Water/Septic/Sewer)
203K Financing – Buy it,
Fix it – all in one loan
Mold – Fact vs. Fiction
Law & Order HIU (Home
Inspection Unit)
Mock Inspection
Individual Training
Modules – Got Questions?
We’ve Got Answers!
This Old Connecticut
House
Minimize Your Risk –
Maximize Your Earnings
Top 10 Environmental
Issues
Survivor! Will The Deal Close, Or
Will You Be Voted Out Of The
Transaction?

56. Thank you!
We look forward to working with you!
Questions???