The title of the column seems like a rather obvious statement, but you would be surprised at how many times we deal with buyers and sellers who are looking for some guarantee when buying real estate.
The best way to explain this is to give you various examples of what we experience on a day-to-day basis:
Example #1: New homeowners call their agent to complain that the air conditioner just stopped working, only one week after they moved into their home. The new homeowners believe that the previous seller, the inspector, or someone needs to be held responsible for the $3000 bill that they are about to incur to replace it.
Answer: Inspectors are excellent at what they do, but they are not fortune tellers. They can’t tell you what will happen with a furnace or an appliance in the future. All they can do is say that the unit is working on the day they inspected it. They can tell you the age of the unit and the probability of it continuing to work. Past that, they cannot guarantee that the air conditioning unit will work one day past closing. Sellers are usually obligated to fix things that are not working during the course of the contract. But after the house closes and the new homeowner has moved in, it’s no longer their obligation (particularly if the buyer did a due diligence and had the item inspected). Sellers are also not obligated to replace old units. Just because it’s old doesn’t mean it doesn’t work or won’t work in the future. Unfortunately, it’s bad luck for the new homeowners, and they’ll be stuck with the cost to fix it, but that’s the risk you run when you buy a resale home. As we like to say, “It ain’t new!”
Example #2: Sellers call their agent and tells them that they would consider taking the buyer’s offer, but wants a guarantee from the buyer’s lender that the deal will close and close on time.
Answer: It’s not going to happen. Even the very best-qualified people and the top lenders run into a problem with a file. You just don’t know what the underwriters might object to once they get into a file. Or a problem that crops up during the contract period with someone’s credit. It happens all the time; not to mention all the other contingencies (like appraisals) a buyer has to get out of the contract. We tell our clients all the time during the course of a contract that we are cautiously optimistic, but we are not sure until everyone had their checks, and cleared by the bank.
Example# 3: Buyer calls his agent and says that he would be interested in buying the downtown condo but is worried that the owner of the parking lot next door could sell his land to a developer that may build a high rise and block his view. There are also some homes on the other side of his view that he worried about being torn down and a high rise going up there. He would buy the condo if the seller can prove that nothing will ever be built in the two areas that would block his view.
Answer: There are some due diligence items an agent can do for the client here. First, he can call the city planner and discuss what that land is zoned for and what the permitted uses are. Most cities also have a downtown planning committee, and you can call them to find out if anyone is discussing buying that land and building something. While all of this may be a helpful answer for the buyer, it is no way a guarantee. You see, zoned land gets changed and permitted uses are lobbied and changed. Remember that developers have a lot of money, and money talks. People pass away, and land or homes go to heirs and their estates. The plans of the heirs may not be the same as that of the original owner. This is a long way of saying that there are no guarantees. You can do your homework and get the answers that you are looking for, but there is no way to guard against this 100%.
Dan Polimino is a Broker/Owner with the Colorado Dream House Team, Keller Williams Realty DTC. Contact Dan at 303-522-1161, Keller Williams Realty DTC. Follow us on Twitter, Like us on Facebook, Watch us on YouTube, Subscribe to Our Newsletter