Is an Email a Notice?

Hypothetical Situation:  The terms of the contract include this statement: “Within 24 hours of receipt of the report, Buyer shall deliver a copy of the report and a notice to Seller stating the defects the Buyer objects to, or this contingency shall be considered satisfied.”

At 3:00 PM on October 21st, the buyer receives “the report”.  At 9:00 AM on the 22nd,  the Buyer agent attaches the report to an email and sends to the Listing Agent. The email reads in part:  “The buyer is concerned about the condition of the furnace. They would like ask Seller to have an HVAC contractor service the furnace.”

It is now 4:00  PM on October 22nd.  The Listing Agent informs the Buyer Agent that the Seller considers the contingency satisfied because the 24 hours has lapsed without the Buyer delivering a Notice of Defects per the terms of the Offer.   The Buyer agent believes his email was sufficient to be the notice called for in the Offer.

Is the email a Notice? Maybe. Determining if the buyer delivered notice timely is a question for the courts.  Deciding which forms to use is the responsibility of the licensee. Whether or not an email, text, or phone call is sufficient the licensee could first  determine if an approved form is available. (Wis Stat 452.40(2) and REEB 16 explain our obligation to use approved forms). In this case, a  Notice is available. The term notice is used in the Offer, the agent drafting the Offer is a licensee, and the parties could reasonably expect the licensees to use proper forms. It’s probably reasonable that the listing agent and the seller considered the email a “heads up” that a Notice was coming.  The Notice did not arrive and the agent and Seller concluded the buyer had a change of mind and opted to let the contingency be satisfied.

Could an attorney consider an email from him or her a sufficient notice. Probably. The attorney does not share our obligation to use available forms.

If the reason for sending an email, text, or leaving a voice message has anything to do with saving time, or for convenience, the question of whether or not a Notice is required is probably answered. Yes.

Buyer’s Protected in Wisconsin Sales

“. ..legal developments of the past three or four decades, in Wisconsin, and elsewhere, have substantially increased the protections for the real estate buyer, especially for the buyer of a newly constructed home. ” p. 18-22 Consumer Protection, Wisconsin Real Estate Law 2017 Edition.

Is a single family home seller free and clear of liability by ignoring the Real Estate Condition Report? Not likely.  Of course in each situation parties should consult an attorney. The cautions in the Offer to Purchase give us enough of a hint to conclude that a seller is far from safe by omitting the RECR. The Offer to Purchase form as it reads today includes  language where the seller represents that he or she has no knowledge of conditions which meet the definition of a defect. (Remember that the RECR is a series of affirmative statements, such as “I am aware of defects in the roof.” )

In the Offer the statement is “the seller has no notice or knowledge of conditions affecting the property OR TRANSACTION.  The possible conditions are listed as A through ff. A good number of these match the conditions on the RECR.  An owner who knows of a condition affecting the property or the transaction (such as I am not the sole owner of the property) should not sign the Offer as written.

The RECR is dated as of the date the Seller completed the form. The Seller’s representation of no conditions affecting the property or transaction is as of the date of acceptance of the offer. If the known facts are different than shown on the RECR disclosure is expected. A licensee is prudent to advise a seller to consult an attorney before accepting any offer which inaccurately states the seller’s knowledge of conditions.  A counter offer is the proper form for notifying a buyer and permitting the seller the opportunity to have some protection.

 

Thank you Seth for Sonder

Is it possible for us to see eye to eye, or be of one mind, or be on the same page when we humans are trillions individual universes?  Sonder is the topic of today’s  Seth Godin Blog

The moment we realize that everyone around us has an internal life of wonder and amazement and disappointments and sorrows we have achieved sonder.  No, it’s not probable that we will see an issue the same as the other guy.  I’m afraid, they’re afraid. We are each insecure and confident and safe and at risk at the same time and different times.  Maybe discussions intent on ending with an agreement are a compilation of concessions back and forth between private, human universes.

Why do some negotiations become contentious?  Because multiple views of life, the world, desire, fear, resentment are mingling. My desire for security conflicts with your desire for gain. My fear of losing conflicts with your commitment to winning. You want to win because you desire a pleasure. I don’t want you to win at my expense because I desire happiness.

Maybe I just had my moment of Sonder. Everyone has hopes, plans, desires, fears, feelings of fair treatment, opinions of slights and disrespect.  Now what do I do with sonder?  I think I will watch and listen.

 

 

Being a Part of Life Experiences

A couple who bought their second house with me in about 1990, sold another and bought their last house with me,  hired me to buy an investment property this summer. They referred their youngest daughter to me to buy her first condo. She was maybe 1 or 2 in 1990. Her siblings have each been clients…at least once. A guy I’ve known for many years asked me to sell his mother’s condo. She passed away recently. A few people bought their first homes this year. Others sold their family home and bought condos. Others bought what they say will be their last house. Some moved up. Some moved to other states. A divorced mother of 2 bought a condo she’s worked and saved for. She got what she wanted. She knew it would happen.

Life experiences become precious memories. I’m grateful to be part of so many. Real estate work is not computer science, or brain surgery.  But it’ something special.

Current Assessment X Current Mill Rate is only one of the choices for property tax prorating

The Offer to purchase provides 5 choices for the buyer and seller to select from to agree on how to prorate the property tax bill for the current year. Except for closings at the end of December, the actual amount the city is collecting from the owner will be unknown at the time of closing.

Each choice on under Closing Prorations is a simple word problem. One or more of the choices may provide a fair and simple way for the buyer and seller to split the bill. In certain situations, one or more of the options may provide a windfall to one party, or may leave the new owner significantly under compensated.  To know which options may be acceptable to both parties, we can plug the known numbers into the formulas.

A: Net General Real Estate Taxes for the Preceding year (or the current year if known):  Assume the current year bill is unknown. The previous year tax bill may be close to the current year bill. Tax bills tend to increase each year, but the increase when divided over the year is probably minor enough that no one cares.

B: Current assessment time current mill rate: This is a bad choice when the community is in reassessment or the property being sold is new construction.  A reassessment will result in property values increasing close to market value. In the fall to keep tax bills from going through the roof, the mill rate will be adjusted down. Close when you know the new assessment but not the current year mill rate and the seller will leave a large chunk of money with the buyer. New construction built in one year and closed  in the following late winter or early spring before the new assessment is known will leave the buyer with a very small credit compared to the actual amount owed for the days of the year prior to closing.

C: Sale price, multiplied by the muni area wide percent of FMV multiplied by current mill rate.  This one is unusually complicated when compared to the next choice.

D: __________________ Create your own method. I think this is safe. Based on the facts of each transaction, the parties may estimate a tax bill. If bill was $10,000 last year, assume the next bill will be $10,100 or $10,300 or some amount. You will most likely be close because tax bills rarely go down. If it’s new construction, you could multiply the sales price by the known mill rate or if the closing happens in the same year that (a) the lot was vacant on Jan 1, and (b) the construction began after Jan 1 and was completed and closed prior to December 31 of the same year, the value of the lot times the mill rate will give you a number that’s close.

E: Buyer and seller agree to reproprate after closing.  Sounds like a great way to be exact, provided the new owner can collect from the seller, or the seller can collect from the new owner if money is owed.   I don’t want to suggest this option and I don’t want to be asked to intercede at Christmas when one party fails to pay up.

You can teach a guy to fish, but he’s gotta wanna eat.

I was reminded this morning that teaching a person to fish could feed them for a lifetime, but only if they want to eat. The person who wants to be given a fish is not going to fish even, if they have the ability, until they decide that eating is better for them than starving.

The effort of teaching is exponentially magnified in results by the student who finds inspiration to make the learned technique or tool a habit. Never quit teaching because some people don’t want to eat. Teach to the people who aspire to greater heights.

 

 

Be Accurate. Be Better. Be Careful. Verify your work.

My guess is you are more likely to be accurate when you’re not distracted. Where and when do you do your most careful work?

Be Accurate: Home Depot, Fleet Farm, and your local True Value Hardware Store sell 25 foot steel tape measures by Stanley, Milwaukee, and Dywalt. For less than a dollar a foot, you can own one of these tough and ready tapes. Even if you use it on every listing (and I hope you will) one of these could last your entire career.  The 26 foot Fat Max by Stanley measures in Metric also. That could be handy if metric catches on in the USA.

Be Better: When you list a house which I last sold, how can you be sure the measurements and sizes I stated on the old MLS sheet are accurate? Don’t take my word for it. I could have made an error. Measure rooms. Check public records. Look at surveys. We all think we do our jobs well. And we all make mistakes. Be better than the agent before you. Do your own measuring.

Be Careful:  The best place for me to prepare detailed offers and detailed representations of property is in my office with no distractions. My guess is you are more likely to be accurate when you are not distracted, where you have access to all the tools you might need. Where do you do your most careful work?  When are you most careful?

Once you’ve prepared your marketing material (MLS Data, Flyers, Web posts) check for accuracy. Send the material to your client and ask them to review for accuracy. When an error is identified, make the correction promptly.  If you work with an assistant for data entry,  have a system for verifying accurate information is entered and inaccurate information is corrected.