I was recently in a multiple offer situation where I was representing a buyer. The Realtor was from the South Bay, and the way he did business wasn’t doing his seller any favors. He was not being transparent at all about the offer process. Additionally, he was putting his seller potentially in legal jeopardy by not following our local laws.
Taking advantage of the fact that the City of San Rafael has not been coming out to inspect properties upon resale, the sellers did extensive remodeling to the home but didn’t get any permits for any of the work. That’s a red flag to a lot of buyers, who don’t want to get permits for the work someone else did and don’t know if everything has been done up to the current codes. If a buyer goes to resell the home in the next 25 years, they may need to get permits for all the work, with the possibility that they might have to pay fines. Currently, fines are three times the permit cost. Permits aren’t prohibitively expensive in the City in question until you tack on the fines. The process of obtaining a permit is relatively quick and painless too. The sellers worked on the house for months and had time to get the permits, so there’s really no excuse.
The sellers also didn’t follow the protocol for inspecting the sewer. They did get a video of the sewer, but it was not made available to any of the buyers. What was available was a report from the plumber, which was written out on a City of Mill Valley worksheet. The sale was not in Mill Valley, which raised questions of professional competence. What really annoyed me on this one is that I informed the seller’s agent of the proper process for getting approval from the Sanitary District. He was aware of what needed to be done, then either dismissed or conveniently forgot about our conversation. If there is a problem with the sewer line that would have been exposed by going through the district review process, then there is potential liability to the seller.
The day before they were scheduled to look at offers, they had a pest inspector return to the property. He previously couldn’t look under the house previously because it was too muddy. Apparently, whomever was working on the pipes left one unattached and it flooded under the house. Professional incompetence struck again. They waited to make a follow up appointment until 2 months after the initial inspection to go back under the house, assuming the ground would be dry by then. They found termites and the sellers’ agent didn’t have the supplemental inspection available prior to the offer submission deadline. The only information he made available was that the house would need to be tented which I estimated from experience could cost approximately $5,000 - $10,000. My buyers and I had no idea if there was termite damage under the house, and if so how much. Termite damage can be quite extensive and expensive if they been eating away at the wood for years, or it can be inconsequential. One would hope that the contractor who did the remodel took the time while he was under the house to repair any damaged wood but there was no mention of such repairs in the disclosures. It wouldn’t be the first time I’ve seen contractors ignore wood damage under a house.
Perhaps the most grating part of this experience was the fact that the seller’s agent was not forthcoming about how many offers he received. One way a buyer gauges what to write is by knowing how many disclosure packets have been sent out. This can be very misleading because these days buyers will request disclosure packets and sometimes not even go out to the house. It’s best to know how many offers an agent has in hand and/or is expecting. The night before writing the offer the agent told me, “4-5 agents had shown interest,” which was marginally helpful. On offer day he told me after the submission deadline that he had no idea how many offers he had received. He said he didn’t check that stuff and told me he had 9 listings so he didn’t have time. I thought that was a pretty weak way to represent a seller.
Advising my buyers, if I know there is only 1 other offer on the table my guess on what the highest number is different than if there are 5 offers. It will be even more different if there are 10 offers. Ever since I became a Realtor my advice to buyers in multiple offer situations has been the same: put down a number that you will be satisfied with if you get the property, and if you don’t get it you won’t feel like you should have offered more. That number is different for every buyer. In this particular situation, the agent could have ended up with only 1 offer, or his inbox could have exploded with offers. Each and every offer needs to be forwarded to the sellers so he had to have known the actual number received.
Was he really too lazy or careless to bother to count the offers? I really don’t mind when people from out of town sell homes in Marin. But I do mind when they don’t follow our local rules and are being less than transparent on offer day. Maybe the way he did business is standard in South Bay, but I doubt it. Incompetence is incompetence wherever you go.