I had the home I like inspected now what?

 I get this question a lot as a Denver real estate professional, buyers will get a house under contract, get the home inspected and then they proceed to freak out. Inspectors will inevitably tell the Buyers that the home is going to catch fire, flood and implode. I usually have to calm them down and tell them to sleep on it. Somehow the next day the house is still standing and we proceed with the next phase of negotiations.  New first-time buyers in don’t realize that negotiations actually begin once you have the home inspection not necessarily when you just get it under contract.

Inspectors go over to the subject property with the full intention to find a bunch of problems.  Then the buyer’s agent creates a Buyers Inspection Objection.  It’s called an inspection objection because that’s what we are going to do.  We are going to object to some items found on the inspection report.  I try and address the safety issues immediately and then let some of the cosmetic issues slide, that way we do not appear completely unreasonable.  You also have to take into account the market you are in.  If you are in a sellers market they don’t fix anything. If you are in a tight buyers market you can ask them to fix everything, and they often will.

The buyer’s agent will create the documents next, the buyers sign and then the buyer’s agent presents it to the seller’s agent who then presents your argument to the seller. When I say present the inspection objection. I mean that a good buyer’s agent will formally present the inspection objection with the inspection report attached and defend the position of the Buyer.  The goal being to try and get some of the items funded or repaired. The inspection report gives the buyer agent sufficient evidence and support from a qualified third party view, on what is wrong with the property. This will support their stance and encourages the seller to fix some of the issues. On occasion, the buyers don’t want to give the inspection report to the sellers. The inspection report is their property therefore the buyer’s agent has to ask permission to release the report. It’s in their best interest to provide the report, because once the seller is aware of the issues they must disclose the issues in the future.  Interestingly HUD has a policy in place to never accept inspection reports. HUD’s are sold “as is” and I believe it is so that they can claim that they are unaware of any issues.

A few days later the Seller’s agent will create an Inspection Objection Resolution. Usually there’s like 5 to 10 issues to take care of, they often agree to repair the smaller issues or they’ll have paperwork to prove that it’s not a problem (such as a roof certification) and then sometimes they apply a credit to the buyer so that they can get the issues fixed at a later date. I often encourage Buyers to take money over getting the repairs done.  If the buyers handle the repairs themselves they often get a better job because if the sellers get it done they just want a cheap quick job and to move down the road.  Frankly, it’s almost always combination of both money and a few items get fixed. If you have a great inspector and they come up with a bunch of things don’t freak out! Usually there’s some compromise and we move forward with the deal. The last one I had, the seller come down $5,000 and agreed to fix any of the safety issues before closing, and that my friends is how you handle a contract after your get the home of your dreams inspected.

New Real Estate Cyber Scam Warning

The Colorado Division of Real Estate at DORA (the department of regulatory agencies) is reporting about computer hacking fraud. Dora is warning real estate consumers to be aware of a national cyber scam currently taking place. Apparently, cyber criminals are hacking into email accounts of real estate brokers, title companies and consumers who are in the process of buying or selling a home.  In other instances the hackers create alternate email accounts with just minor changes to the name of the email account which typically goes unnoticed by the recipient of the email.
Unfortunately, the cost of this scam can be in the tens to hundreds of thousands of dollars with just one successful scam. Pay very close attention, everything may look like the email signature address and website but by the time the homebuyers realizes something is wrong the money is already gone and in an untraceable bank account leaving them at the table with no money and eliminating their ability to purchase the home. This last February a Denver Colorado real estate seller lost over $80,000 from the sale of the property to one of these scams.

How do the scams work you may ask? Often the computer hackers monitor email exchanges between the parties of a real estate transaction and gain specific information such as the buyer and seller names, subject property address and phone numbers and as the closing date approaches and arrangements are made to wire the money to the closing company or wire the proceeds from the sale of the house to the sellers the scammer will send a last-minute email from a hijacked account or similar-looking email address updating the wiring instructions to request the money be transferred into a fraudulent bank account. The email looks legitimate and often contains the transaction specific information to hackers obtained in the body of the email or as an attachment. One way to avoid this would be to simply go into the bank yourself in person and deal with it that way. I would also recommend getting a check directly from the title company at closing and skirt the wiring of seller funds altogether.

The increasing technical sophistication of computer hackers require us to take the following action:

  • Verbally contact your Broker prior to wiring any money. You should always verbally contact a real estate broker to confirm that the wiring information is accurate. Do not rely on telephone numbers or website addresses provided within an unverified email.
  • Do not email financial information emails and texts.  They are not secure methods to transmit financial information. Keep a record of websites that hold your financial information and before providing that information confirm that the websites in which you input financial information are secure look for the URL to start https stands for secure.
  • Don’t click on links. Don’t use links to get to websites. Instead search and find the company and directly go to their website from your search. As a tech savvy real estate agent I can’t stress this one enough.
  • Lastly update your computer keep your operating system browser and security software update.

Finally, don’t be embarrassed, you should report any fraudulent activity to the Federal Bureau of Investigation through its internet crime complaint center immediately you could save other consumers from a lot of hardship.