Seriously Talking About Drinking Water

It took the Flint, Michigan lead contaminated water crisis to dramatically change the conversation from passive to serious in a hurry. The scientific, educational, and public safety communities will provide the research evidence to keep pressure on state and local governments, and utilities to effectively mitigate lead levels in water. The EPA has established action levels for remediation.

Attention is focused on old and deteriorating lead water lines serving communities . Wisconsin identified 5 counties with high risk lead levels and allocated limited funds to those counties replace public and private lead service lines. The other 67 counties are not lead free. They just aren’t in the top 5 as identified so far. In Dane County, the city of Madison has been sharing the cost of replacing lead service to homes since 2001. (By sharing, the City rebates the homeowner $1000.00 of a typical $3,000 bill.) Mount Horeb was in the news this year. A sample of homes in target areas of the Village showed 16% of the homes with higher than safety standard levels of lead in their drinking water.

Estimates for replacing lead lines put the cost at $3,000 to $5,000 per house. Obviously State and Local governments have a significant price to consider as they  write public policy to comply with EPA 15 Parts Per Billion action level directive.

As real estate licensees in the lead-in-the-water discussion, our place is not to be a referee or judge. We will see differing opinions on risk. We will hear debates of the merits of pipe replacement. Expect to hear no-fear opinions from the municipalities and water utilities. Our role is to assist the parties in reaching an agreement THEY are satisfied with, and their satisfaction of the risk of lead poisoning can not include our opinions of the evidence or the science.

Homes built prior to the 1940’s are the ones most likely to have lead pipes coming into the house from the street. It’s not always easy to see the lead pipe, but inspectors may have clues to look for. A water test for lead won’t show the a lead pipe exists, but it might provide some evidence that the water is relatively safe.

As a plan of action, consider a test by a licensed plumber done in compliance with EPA rules. Homeowners may avoid delays, surprises, and difficult negotiating positions by testing for lead in the water before offering the house for sale. Maybe we will see more home buyers requesting water tests for these older homes. Assisting the parties in knowing the rules of proper testing will always be safe and prudent practice.

 

 

 

 

 

The Contingency is the instruction for what to do if this or that happens

When concerns arise in a transaction the licensees have only to look to the contract to see what the Buyer and Seller have already agreed to do to move forward together or by parting ways.

Contingencies are the agreements between the Buyer and Seller of the steps to take as the parties satisfy their obligations under the contract.  Notices and amendments are the methods of communication between the Buyer and Seller when real estate licensees are involved.  Conversations between licensees on behalf of the buyer and seller are NOT acceptable alternative communications to amendments and notices signed by the Buyer and Seller.

The “Title Not Acceptable for Closing” contingency tells licensees exactly what to do on behalf of the buyer and seller.  Let’s walk through the contingency.

TITLE NOT ACCEPTABLE FOR CLOSING: If title is not acceptable for closing, Buyer shall notify Seller in writing of objection to title by the time set for closing. In such event, Seller shall have a reasonable time, but not exceeding 15 days, to remove the objections, and the time for closing shall be extended as necessary for this purpose. In the event that Seller is unable to remove said objections, Buyer shall have 5 days from receipt of notice thereof, to deliver written notice waiving the objections, and the time for closing shall be extended accordingly. If Buyer does not waive the objections, this Offer shall be null and void. Providing title evidence acceptable for closing does not extinguish Seller’s obligations to give merchantable title to Buyer.

Notice how simple the directions are. 1) Buyer sends a written Notice. (2) Seller either removes the problem condition of the title or sends a written Notice to Buyer. (3) When Buyer receives that Notice from Seller, buyer decides to waive the objection and of course does that with a NOTICE to Seller. (4) If Buyer does not waive the objection prior to the closing, the Offer is Null and void. Certainly in these days between Notices, the parties can negotiate by amendments.

Licensees are prudent to draft notices exactly as the contingencies specify.

The Wisconsin Offer to Purchase

I’m not a lawyer but I know lawyers and I know of a Wisconsin Real Estate Lawyer with a blog. James N. Graham is the lawyer, and while I don’t know him I like what he presented on the “As-Is” sales.  Last night I read the  Court of Appeals of Wisconsin Published Opinion James gave a link to. Yup. I read it just before lights out.  If you wonder how a court might interpret failure to disclose provisions of the Offer, you’ll get some insight from Attorney Graham’s work.

The WRA created a fantastic resource for licensees and the public. See the Explanation of  the State of Wisconsin Residential Offer To Purchase.

While I don’t want to discourage you from getting your law degree, staying up on the real estate law can be done by finding legitimate expert lay person’s explanations. These are two worth looking into.

Find The Good In Every Offer

Every Offer we receive is better than the Offer that was not submitted.  I think I am a logical thinker  when my client receives an Offer to purchase from one person who looks at the house and no Offers from five parties who also looked at the house, the one offer in my hand is better than any of the Offers that were not written.  Regardless of the terms, this Offer is a good thing and here’s why:

  1. There is at least one favorable term in every Offer. The Offer is an invitation to talk about terms.
  2. The Offer the seller will not accept has terms only the seller and buyer will know. Any buyer sitting on the fence will be told “An Offer is in.” What’s more likely to inspire a person to move off center better than anything known to man? The fear of loss.
  3. Zero Offers leave you two Offers short of a competition. One Offer is half way to a seller’s market.

I have a chuckle when listing agents refer to Offers as “low-ball”. That comment is driven by unmet expectations, and  likely some fear of the seller’s displeasure. In the hand of a Realtor with an attitude of abundance,  that unacceptable Offer can be the most important piece of the puzzle for a client to go from here to closing in a hurry. Be grateful for any Offer and let the buying side know you appreciate what they’ve given you.

Let’s End “Now is the best time…”

Google lists 200,000,000 entries under Now is the best time to sell a house. Ten seconds later in six-tenths of a second she gave me 63,300,000 results for Now is the best time to buy a house.   Why are there a quarter of a billion persuasive cases made for this being the best time to sell AND to buy? Probably because millions of people think it is the best time for them to manipulate other people into doing something that benefits the manipulator for sure.  “Now is the best time” is an opinion and it’s cliche. The more it’s used (and it’s used a lot in advertising) the less it resonates. But “Now is the best…” is worse than dull, it’s possibly not true.

We can agree the best and worst of times are subjective. What’s good for me may not be good for you. Sure it’s possible a great number of analytical factors favor a buyer or a seller at any time, but those facts may be secondary to anything that matters more to a decision maker. If I want to keep my family together, even though the facts point to a “seller’s market”, today might be the best time available to me to make a commitment on a house.

How about this, instead of going the easy route of manipulation by spreading fear of loss of opportunity, property, time we let go of “Now is the best…”. Instead, can we let the 263,000,000 other folks trip over themselves trying to control people and we be the voice of reason?  Is this a good time to buy or sell real estate? I don’t know. It depends on you. What’s important to you?

 

The Financing Contingency is NOT a contingency to get financing

The Financing Contingency is not what it says it is. From the date of acceptance of the Offer, until the moment the lender approves disbursement of funds (at the end of the hour of closing when all papers are signed) the buyer and seller are proceeding with a leap of faith.  The buyer does not have a protection of their obligation to close being contingent on obtaining the funds to close from a lender. And, satisfaction of the Financing Contingency is  no assurance that the seller will receive any money on the date of closing.   The Wisconsin Offer to Purchase Financing Contingency, unless modified, is only a contingency for the buyer to be able to obtain a Commitment Letter….nothing is said about the offer being contingent on getting the money.

Financing Unavailable. It happens that the loan approval process uncovers a reason that the otherwise ready and able lender is not willing to issue a mortgage commitment letter for the buyer on the terms of the Offer, or on any terms. According to the contingency stated in the contract, the buyer agreed to send written notice to the seller stating the financing is unavailable and provide a copy of the lender’s rejection letter. The next step is for the seller to take up to 10 days to finance the transaction on the same terms…unless the buyer’s agent filled out the Offer as suggested with a name of loan source.  Because it is common practice to write in “Conventional Loan” even though the offer prompts in capital, bold letters (INSERT LOAN PROGRAM OR SOURCE), buyers are sometimes in an unattractive spot waiting up to ten days for sellers to release them from the contract.

 

 

 

 

 

She’s 78 And Selling 262 Homes in WI

Born in 1938, at the height of the Great Depression Fannie Mae has aged well. Like your grandma, Fannie Mae is kind, easy to get along with, and unlike Grandma Lucy, she has about  262 homes in  Wisconsin for sale. Fannie is smart. She didn’t set out to be a titanic real estate owner, she got there the new fashioned way…people she guaranteed would never, actually did, walk out on their home mortgages. (NOTE: No judgment (on the public) here. Public policy, corporate greed, lender malfeasance, illegal real estate practices, forced people into decisions they would never have made.) And just like that Fannie’s phat with homes for everyone. And by phat, I mean she’s EXCELLENT!

Want to be a home home owner or  a hero to someone? State at Homepath.com . Fannie is internet savvy. She built a fast, accurate, easy to use on-line process for finding homes and making offers. It’s so easy, us Realtors® can use it. Full disclosure, my first time through I challenged the system because, well because I do that. And I learned for you…don’t do that. Don’t challenge the system . Roll with it. Fannie isn’t demanding you jump through hoops; more like fill in the boxes. Follow these steps and you’re on the path home:

  1. Fill out your State Offer to Purchase Form
    1. Skip the inspection contingency and financing contingency…Fannie has her own
  2. Fill out the Fannie Mae Addendum…basically this form says we agree everything we  have for conditions in our State Offer to Purchase form attached is over ridden by this Addendum. That’s cool. The Addendum is easier on the Buyer than the WI Offer to Purchase which has a seller advantage slant.
  3. Fill out any other (there may be one other) Fannie Mae form
  4. Have your buyer sign in ink. If Fannie is accepting digital signatures today I’m not aware. Do it old school…sign in ink. Black ink. Use your best penmanship…Fannie want’s Catholic school quality cursive.
  5. Find the home you’ve written the offer for on Homepath.com and click on Make An Offer
  6. You  are now just entering digits and short summaries of contingencies…that’s easy!
  7. Last you upload your documents:  Affidavit of owner occupancy (investors are not permitted for the first 20 days), pre-approval letter, Offer to Purchase, Fannie Addendum)
  8. Submit your Offer and wait mere hours for a response…Fannie doesn’t work on weekends, but she’s efficient.

Go and be bold. Be fearless. Be Humble. Fannie is fair but firm…play by her rules and you’ll be happy. She guarantees it.