Choosing Sides

One of the not-so-great things about working in the particular market that I do, is that because a lot of the homes out here in the 'burbs were constructed within the last 15 years or so, we see a lot of the faulty construction issues that were common during that period. The major one being LP siding.

Today I had the interesting experience of touring 2 homes in succession that had failing LP, and in both cases neither the sellers nor their agents were aware of it. One agent claimed that it couldn't be LP, because the house was built in 1988, and LP was only sold in 1994 - 1995. In fact, the product was sold and put on more than 800,000 houses nationwide between the period of 1985 - 1995. The earlier product, that is, pre-1992, was the most prone to failure, so in fact, this agent's house is a sitting duck, and he just doesn't know it yet! But, since the failure of the siding is plainly visible to the untrained eye (i.e., mine), I'm sure he will soon find out...

As a Realtor, it only takes one listing with LP siding for you to become something of an expert on the subject because it can be the cause of so much heartache for your sellers. Heaven help the naive seller and agent who go merrily traipsing along, assuming that because the LP "looks okay" to them, that all will be well. There are a lot of different stages of failure, and some are not immediately apparent. The process of breakdown begins with tiny cracks, and without vigilant maintenance of the LP, you may have these cracks which allow water to seep into the siding, and not even know it.

I think it usually pays to know what you may be looking at up front, so a pre-inspection of the property can be beneficial, and having been through it once, I would now recommend any seller with LP siding have this done. In some cases, I can visually determine if damage exists, but I can't as easily determine the extent of the damage...or "how bad is it really?"

That's a big distinction, depending on whether the moisture has penetrated behind the siding and into the actual structure. Is it a matter of replacing all siding on the house, or is it possible to paint, seal and caulk the siding to keep minor damage from progressing? A pre-inspection can help answer these questions, and will allow you to formulate a plan to deal with the problem. The way I look at it, you'll either end up paying for it up front, or in the form of a price reduction or failed sale when the problem is uncovered.

In Washington state, sellers are required to disclose if there is LP (or and fiber-board type siding) on their home, and if the siding has begun to fail, most lenders will not lend on the home. (Clearly, the agent mentioned above either didn't read his seller's disclosure, or maybe the sellers don't know either! ) This can make it extremely difficult to sell, even if the siding only has minor damage, simply because most buyers do not want to put themselves in the position of buying a home knowing that there is a $10K-$15K repair job that will have to be done...and with LP and a lot of similar siding products, it is not a question of IF it will need to be replaced, but when. So, if a homeowner has this siding, they will most likely end up having to make some sort of arrangements to deal with this problem.

I guess the long and short of it is, if you are a real estate agent or a homeowner whose home contains these products, it pays to educate yourself about the products, know your options and have a plan for dealing with any problems that may arise.

The Golden Rule in Real Estate

I was just thinking about a situation that came up recently, and wanted to write a little bit about how I think the golden rule applies in real estate. And no, I'm not talking about that golden rule that says, "he who has the gold makes the rules," but rather, the one that says you should do unto others as you would have others do unto you.

Every real estate agent out there, no matter what company they work for, has the ability to pretty much decide how they are going to do business. Obviously, we all have to obey the law, but within the law, there is a lot of grey area. There are things you can do that are legal, but may not be ethical or proper.

For instance, is it ethical to undertake an action that serves your own client well, but basically "screws" the person on the other side of the table?

For instance, say you are working with an out-of-town investor client who wants to buy a property. Maybe this investor doesn't even come to town to see the properties before making offers. Maybe their agent simply selects three of the best, then the buyer makes offers that are subject to inspection on all three, and no disclosure is made that this is the case. After inspection, the buyer rescinds two of the three offers, selecting only the house that is in need of the least repairs.

Smart, right? But what about working in good faith?

When this is a buyer's strategy, the seller usually doesn't know about it, and then when the inspection is disapproved and the transaction terminated, they now have a house that is less marketable because other agents all know that this is a house where something went haywire during inspection. It's a pretty crappy thing to do to a seller who is working in good faith and would have been willing to make the repairs. It could end up costing them thousands of dollars.

As the buyer's agent, maybe your thinking is that the only person that matters here is your own client. But remember that under the Washington Law of Agency we are required as agents to act in good faith towards all parties. This isn't to say that an agent can't still be a tough negotiator, and get a great deal for their client...neither of those things is precluded by acting n good faith.

I guess the way I look at these things is, if I wouldn't want to have someone do something to me, I'm not going to say it's okay to do it just because it's good for business.