16 18 ny1 hr min max

P R E S E N T S

Minimize Your Risk Minimize 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

2016 NAR Profile of Buyers & Sellers

Characteristics of Home Buyers

First-time buyers made up 35 percent of all home buyers, an increase over last year’s near all-time low of 32 percent The typical buyer was 44 years old for the 3rd straight yearThe median household income rose to $88,500 an increase of $2,500 66% of recent buyers were married couples17% were single females 7% were single males 8% were unmarried couples

2016 Profile of Buyers & Sellers

83% bought single family homesThe typical home purchased was 1,900 square

feet, three bedrooms, two bathrooms, built in 1991

84% found heating and cooling costs were important environmental features

Buyers typically searched for 10 weeks and looked at a median of 10 homes

88% of buyers purchased their home through a real estate agent or broker

2016 Profile of Buyers & Sellers

Home Sellers and Their Selling Experience

The typical home seller was 54 years old, with a median household income of $100,700

For all sellers, the most commonly cited reason for selling their home was that it was too small (18 percent), followed by the desire to move closer to friends and family (15 percent), and a job relocation (14 percent)

Sellers typically lived in their home for 10 years before selling, an increase from nine years in last year’s report

Eighty-nine percent of home sellers worked with a real estate agent to sell their home The final sales price was a median 98 percent of the final listing

price Recently sold homes were on the market for a median of four

weeks

FACT:FACT:80% of claims against brokers E&O insurance

are due to property related conditions

What is theNAR 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

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

2015 Legal Issues by Major Topic

____________________________________________________________

Topic Cases Agency 74

Property Related Conditions 49

RESPA 40 Fair Housing 32

Property Condition Issues

Caveat EmptorThe 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!”

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

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

Top 10 Property Conditions

Water intrusion/Mold

Structural Defects – flooring/walls

Insects/verminSeptic/sewerBoundary issues

HVACPlumbingRoofEnvironmental

IssuesElectrical

Mold/Water Intrusion#1

Mold & Water Intrusion

What’s the problem?

Mold & Water Intrusion

Is this a problem?

It’s Just A Small Window Leak…

How Bad Could It Be?

Warning Signs of Water IntrusionPoor gradingInadequate ventilation

in crawlspace or atticCracks in foundationEfflorescenceRoof stains in atticMissing roof shingles

Stains on ceilingsNewly painted

foundation/floorsWater stains

baseboard/furniture legs

MoldSump pump Downspout not

extendedWindow rot

Structural Defects/Walls & Floors #2

Walls/Floors

Deck Framing & Support Systems

Structural Defects

Some defects are obvious….

Structural Defects

….and some are not!

Structural Defects

A closer look

Warning Signs of Structural IssuesSloping or sagging

floorsOverly snug fit to floors

and windowsCracked tile floorExcessive concrete

cracking and separation

Alterations without permits

Sagging beamsFunky

supports/columnsStair riser/tread sizeCrushed sills/joistsSuspicious homeowner

repairs

Insects/Vermin#3

Bats & Birds Nesting in Attic

Powder Post Beetle Damage

Termite Mud Tubes & Damage in Wood

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

Septic/Sewer#4

Sewer & Septic

Where does the water go?

Where does this water go?

Warning Signs of Septic/Sewer Issues

Slow sink drainsSlow drainage when flushing toiletsOdor in yard – septic breakoutInternal odorsWashing machine (grey water) drained to outside

Plumbing

Plumbing

The latest in designer plumbing!

Some Things Are Readily Apparent

Some Not So Obvious

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

Roof

Roof transition Exposed Flashing

Roof Flashing

Defective Asphalt Shingles

ICE DAMS!!!!

Warning Signs of Roof Issues

Age of RoofRusted FlashingMissing, cupped or curled shinglesStained ceilingsCracked or missing tilesBuckets in the attic

Environmental Issues

Radon (in air and water)AsbestosLeadUnderground Storage Tanks

Warning Signs of Environmental Issues

Radon –mitigation system not functioningAsbestos – wrapped pipes, loose insulation,

vermiculite, aged floor, 6 x 6 ceiling tileLead – 1978 or beforeUST – cut off fuel lines, new gas, evidence of prior

oil tank, propane

HVAC

Warning Signs of HVAC Issues

Aged units

No maintenance tags

Odors in house or near unit

Ineffective function – not hot enough, not cold enough

Electrical

Panel, Condition & Location Problems

Warning Signs – Electrical Issues

Outdated Service sizePanel issuesExposed romexOpen junction boxesExtensive use of electrical cordsAluminum wiring (primarily used from 1965 – 1974)

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 expertisePoint out potential trouble spots and recommend a

Home InspectionDocument everything in writing

Minimize Your Risk

Make sure the Inspection Companies that you recommend have:

Errors & Omissions InsuranceFully licensed in CT and NYStrictly adhere to the Standard of PracticeStand behind their inspectionsOffer comprehensive inspection agreements

Thank you!We look forward to working with you!

Questions???