Bank owned homes and their agents: Where does fiduciary responsibility end and human responsibility start?

By
Real Estate Agent with Keller Williams Realty - Lakeside Market Center

Would have loved to have left this sign on the doorOne of my biggest gripes with showing  bank owned homes is this:  The seller (bank, asset manager, Wizard of Oz...) does not have to provide full disclosure on the home.


Heck, they don't even have to provide partial disclosure on anything that has to do with the home.

 



Yes, I get it that they have never lived in the home.

Yes, of course they cannot attest to the every day workings of the mechanical systems.

But...(you knew this was coming didn't you?)

Obvious problems that are noted by a listing agent and forwarded over to the asset manager should be disclosed to potential buyers and their agents before an appointment is set. 

Case in point:   I showed 6 homes yesterday to a buyer client.  3 of them had obvious mold/mildew infiltration.  (I didn't need a test kit to figure that one out for myself.  The signs were obvious, the smell was horrendous as you approached the basement and the staining on surfaces made it impossible to avoid.)  HUD owned homes will have a statement right in the listing remarks if they suspect that a home has mold, or if they have test results that a home has this defect.

If HUD can do it, why aren't the rest of the owners following suit?  

I've talked with several listing agents who handle foreclosures in Macomb County.  Each and every one of them go through the homes prior to listing them, take photos, and forward them to the asset managers of the homes.  In this manner they are able to list the homes at the price they feel will need to be set to sell them.  Since the asset manager of the bank owned properties have photos and detailed descriptions of the homes, why the heck are they allowed to get away with not giving a disclosure?   Why aren't the listing agents making simple disclosure in the remarks section of the listing information sheet available to buyers agents and their clients?  

Is it the fiduciary responsibility of the agent to the sellers to paint a rosy picture of these homes regardless of the possible health effects upon someone viewing the home?

I vote:  Hogwash.

If we walked into a private sellers home to market it for sale and it was obvious that there was an issue with mold or mildew we would tell the seller "You have to disclose this, and it should be put into the remarks".  Put everyone on notice that the mold/mildew is there before they come to view the home. 

I had a young couple with me yesterday, along with 2 children.  (One an inquisitive 2 year old)  I was angry that the children were breathing that air, and worried about the littlest ones breathing after we left. Yesterday was the first time that I wanted to go back to my car, draw up a sign and tape it to the front door.  I didn't, as I don't have the right to do that.  But oh my I was tempted.


© Kris Wales - A Macomb County MI real estate agent



close

Re-Bloggged 2 times:

Re-Blogged By Re-Blogged At
  1. Gabe Sanders 09/01/2008 06:59 PM
  2. Paul Francis 09/02/2008 06:29 AM
Spam prevention

Accessibility option: listen to a question and answer it!

To submit the form,
drag the man to the circle on the side.

Type below the answer to what you hear. Numbers or words, lowercase:

Tags:
bank owned homes
foreclosures
macomb county

Comments 95 New Comment

Anonymous
Post a Comment
Spam prevention

Accessibility option: listen to a question and answer it!

To submit the form,
drag the flag to the circle on the side.

Type below the answer to what you hear. Numbers or words, lowercase:

Anonymous #93
Anonymous
Amy Boxer - Welcome Home Furniture Rental & Staging

What a great post Kris.  You have pointed out yet another fall out from this mortgage crisis disaster that needs to be fixed.  Thank you for taking this issue on.

September 03, 2008 01:33 PM
Anonymous #94
Anonymous
Anonymous

Someone should pass a law requiring landlords, banks, and other entities that have not lived in the home at any time during the previous three months to get a pre-listing inspection by a thorough, extremely competetent home inspector. That's the best form of disclosure there is.

September 04, 2008 02:35 AM
Rainer
339,751
Kris Wales
Real Estate Blog & Homes for Sale search site, Macomb County MI
Keller Williams Realty - Lakeside Market Center

Steve:   I picked up a pack of 20 (filters) from Home Depot this week.  They're on the front seat of my car.  After reading all of the replies to this post there seems to be a general consensus from buyers agents:  Disclose, warn, give a heads up at the very least.  From REO agents:  Sorry, pack a mask. 

This really has been an eye opening discussion.    Thanks for sharing your thoughts Steve.

Jacob:   Having a home inspector come through with me on previews of these homes to check for mold isn't feasible.  We still have to go inside of them, we're still exposed without warning.  Of course I recommend a home inspection to all my home buyers as that is the only way for them to fully judge the "as is" condition.   Also, most of my buyer clients are not cash purchasers.  Active mold is something that will halt a mortgage application in its tracks.  Why have my clients offer to purchase on a home when they don't stand a prayer of getting a mortgage?

Amy Boxer:  You're welcome.  I would suppose staging wouldn't help properties like this unless they were remediated prior to you coming in!

Russel:   Bingo!   But I bet that won't happen until the "foreclosure crisis" is over with.

September 04, 2008 05:44 AM
Anonymous #96
Anonymous
Debra Higgins

And they want to change the law to allow banks to actual act as real estate agents. Sheesh!

Debra Higgins

September 09, 2008 08:34 AM
Rainmaker
238,128
Pat Fenn
Marketing Specialist for CJ Realty Group/Cindy Jones Broker

Came across th is old post and remember the days when it seemed every REO we showed was  a mess.

December 28, 2012 04:36 PM
Anonymous
Post a Comment
Spam prevention

Accessibility option: listen to a question and answer it!

To submit the form,
drag the house to the circle on the side.

Type below the answer to what you hear. Numbers or words, lowercase:

Rainer
339,751

Kris Wales

Real Estate Blog & Homes for Sale search site, Macomb County MI
Ask me a question
*
*
*
Spam prevention

Accessibility option: listen to a question and answer it!

To submit the form,
drag the cloud to the circle on the side.

Type below the answer to what you hear. Numbers or words, lowercase:

Additional Information

A partner for your real estate
needs in Macomb County.


Looking for a full time real
estate professional with over
a decade of experience in
Macomb County MI and it's
surrounding areas?  

Feel free to get to know me and
how I conduct my business by
reading here and visiting
 Chataboutmacomb.com and
Macombhomes.com

I'm a firm believer that the best
real estate relationship is a
partnership. We work together
to achieve your goals - whether
it be in purchasing your first
home or selling your present
home to purchase another or
to relocate.

Please feel free to email me at
any time. I would enjoy chatting
with you and getting to know you.