By Mike Bodeen · 27 June 2014
Are Realtor Efficiencies Helping or Hurting Clients?
A large local real estate team brought a buyer to one of my listings recently. The negotiations went well, the parties were very amicable, a deal was struck and escrow opened. The 10 day “Due Diligence” period began. Because the buyer was obtaining a VA loan, and since the property had a private well, the lender (VA) required a water quality test.
No problem, right? Wrong. Big problem! It turns out that the property’s water quality after lab testing had an unacceptably high amount of arsenic, per EPA guidelines.
Now, the good news is that a quality Reverse Osmosis (RO) system will reduce the arsenic levels in the water to more than acceptable limits. So recognizing that the seller had a problem, we needed to determine which company can best provide the solution, affordably, and quickly. The “we” in this case is “me.” The seller had just gone out to the east coast for two weeks to find and close on a house out there.
Now this is where it gets a little frustrating. The Bodeen Team was instructed by the buyer’s agent’s Transaction Manager (TM) to no longer contact the agent who wrote the contract, that we would need to deal directly with the TM. The other oddity is that we were told to change the MLS reporting for which agent actually sold the house. We put the gal who wrote the contract and negotiated the deal. “Wrong!” said the TM, the agent who gets the credit for selling the property is actually So and So, who’s name you may recognize as they use extensive radio and TV advertising getting their name out there.
Okay, no problem there. That is not uncommon for large teams.
Now, back to the story. The logical solution to this arsenic issue is to negotiate who fixes the problem. In this case, it’s pretty clear that my seller is on the hook, though not legally, just practically. And he agrees to correct it, within reason. We begin to research the issue which will be saved for a future blog. The short story is that we will need to install an RO system at the kitchen sink to handle the sink area and refrigerator water line and then re-test the water for the lender. Voila, problem solved, right? Wrong again! The buyer, like most people, does not like the word, “arsenic.” (And can you blame him?) And he’s heard all the bad stuff and more about arsenic, including that you can get skin cancer by coming into physical contact with the arsenic laden water. WRONG! Only ingested arsenic can cause a problem, not bodily contact.
And because of all the bad he’s heard, the buyer wants EVERY water outlet covered, or in other words, a whole house system. Under sink RO units that can take out arsenic can be installed for less than $500 up to almost $2000 for the best product on the market, supposedly. Whole house systems can run in the tens of thousands. We were quoted $30,000 for a top of the line unit.
Now, the buyer still wants to buy and the seller still wants to sell, so we need to determine if there is a reasonable middle ground solution.
Here’s the rub. Come to find out that it is the TM who is now negotiating. Whoa, what about the buyer’s agent who showed them the property and wrote the contract? “No, they are officially out of the loop,” said the TM. So the gal who has never met them and did not write the contract is now negotiating. But no one is talking sense to the buyer, trying to help the buyer see what is reasonable.
Did we get the deal done? As of this writing, not yet! Stay tuned!!
Follow Up Blog…
Arsenic in the well – Did we get the deal done?
You may recall that a recent blog discussed a home we have in escrow in the Desert Hills area of North Phoenix and that the VA (buyer’s lender) wanted a passing water quality test because it’s a private well. Well, (pun intended) we didn’t get the passing grade as this home had elevated arsenic levels. Come to find out that this was not uncommon in the North Phoenix areas serviced by private wells.
We then proceeded to find a company who could install a water purification system (Reverse Osmosis) that would reduce the arsenic to acceptable EPA levels.
The problem was compounded when the buyer wanted to have the whole house treated, which could have cost tens of thousands of dollars, effectively killing the deal.
Further frustration ensued for us because no one from the buyer’s end was helping him to be reasonable. We couldn’t talk to the selling agents as this company’s system only allows for other Realtors (that would be me) to talk to the Transaction Manager, not the Realtors. This was a so called “Realtor Efficiency.”
So what did we do? I suggested that I and the Transaction Manager talk to the buyer directly on a conference call. This we did. I recommended that the buyer speak directly with the water company rep that I had spoken with so that the buyer would have confidence that by having one unit under his kitchen sink would provide him with excellent drinking water protection. He took our advice and contacted the rep and the rep was able to convince him that this was indeed the case. There were several companies that had R.O. systems that could likewise solve the problem, but in the end the buyer’s comfort level was with Kinetico’s brand.
So, did the deal finally get done? Well, the short answer is that the deal is ALMOST done, as we close on the 7th of July, but the arsenic in the well water issue has been solved to the satisfaction of all parties.