The following is an excerpt from the new edition of the firsttuesday Career Manual, a best practices guide to help new real estate licensees establish their personal brands and boost income. In this excerpt, we discuss solicitation of offers and the marketing package.

Coordinating events favoring fairness

The contents of a property marketing package is the evidence a seller’s agent needs to demonstrate they have fully informed prospective buyers what it is that you sell.

When you are employed as a seller’s agent, you owe a special fiduciary duty to the seller to use diligence to market their listed property, locate a buyer who enters into a purchase agreement with the seller, and close escrow on a sale.

The sole objective: solicit and locate prospective buyers to acquire the property on the listed terms and property conditions disclosed. Symmetry of property information between the seller and the buyer is the goal. Thus, what the seller knows about the property, the buyer also knows before entering into a purchase agreement.

Understand that negotiations by a prospective buyer start on their inquiry for property information and ends when bargaining results in the buyer and seller signing a purchase agreement.

At the moment a prospective buyer voices an interest by inquiring about the property, you as the seller’s agent owe that buyer and their agent a general duty to voluntarily provide critical information on the listed property, including all conditions which might adversely affect its value as viewed by an informed buyer. This critical information affecting a property’s value is labeled material facts.

The objective of theses upfront disclosures by the seller and their agent of known conditions is to provide the buyer with sufficient information about the property to make them aware – put them on notice – of conditions affecting its value and their use of the property to enable them to set a price before they submit an offer.

To accommodate your delivery of property information to a prospective buyer, organize the information you gather at the listing stage when you conduct your property investigation and include it in the marketing package.

Much different from a promotional flyer

A marketing package, as a collection of accurate information and data on a listed property, reaches well beyond the minimal engaging contents of the “promotional flyer” you use to attract buyers.

For the package to contain critical information about the property, it includes all state mandated property disclosures and third-party investigative reports acquired which set forth the property’s present condition.

The more information you detail in a marketing package, the more confident the buyer becomes about the property. Equally as important, the package demonstrates you have fully disclosed all facts which might adversely affect the market value of the property.

To properly market a listed property, you hand the marketing package to buyers or their agents on their initial inquiry into further property details. The delivery of property information to buyers is part of the listing agent’s duty, owed to your seller, to conduct a due diligence investigation and timely relay knowledge of adverse property conditions to interested buyers.

Upfront property disclosures avoid money claims by the buyer based on seller/agent deceit for failure to disclose material facts about the property before your seller enters into a purchase agreement with the buyer.

Further, the condition of property reports prepared by a licensed or accredited third-party – home inspectors – and included in a marketing package reduce:

  • the seller’s exposure to liability under their duty to disclose their knowledge of property conditions adversely affecting value; and
  • your exposure to liability as the seller’s agent under your legislated duty to personally inspect, competently observe, and fully report your findings to buyers about property conditions which might limit its value for a buyer.

Contents of a marketing package

When you enter into a listing agreement, prepare and review with the seller a checklist of property reports needed from third parties to perfect your marketing package. [See RPI Form 102 §7]

The checklist, called an advance cost sheet, is an estimate you prepare to review with the seller and advise on the costs they will incur for third-party investigative reports you need in the marketing package. The checklist becomes an addendum to the listing agreement as a condition of employment. [See RPI Form 107]

When the seller agrees to incur the marketing expenses itemized in the cost sheet, you have the authority to request the various third-party services and obtain their reports. On receiving a report, the seller will confirm its content and you will include it in your marketing package.

The recommended third-party reports included in the marketing package are:

  • a Natural Hazard Disclosure Statement (NHD), provided by an NHD expert [See RPI Form 314];
  • a structural pest control report (SPC) and any clearance;
  • a home inspection report (HIR) to accompany mandated property disclosures;
  • a well water report, if applicable to the property;
  • an occupancy (transfer) certificate, if locally required on sales; and
  • a septic tank report, if applicable.

Along with the third-party reports, your marketing package needs to include various property disclosures the seller or you will prepare, such as:

  • a Transfer Disclosure Statement (TDS), the disclosure of the physical condition of the property [See RPI Form 304];
  • a Natural Hazard Disclosure Statement (NHD), unless obtained from an NHD advisory service [See RPI Form 314];
  • a Lead-Based Paint Disclosure (LBP), required on all pre-1978 residential construction [See RPI Form 313];
  • Federal Residency Declarations confirming the seller’s legal status for tax purposes when closing escrow regarding buyer withholdings requirements [See RPI Form 301];
  • a Residential Earthquake Hazards Report, disclosing structural weaknesses for properties built prior to 1960 [See RPI Form 315];
  • the multiple listing service (MLS) printout and property profile;
  • a Seller’s Neighborhood Security Disclosure, relating to security conditions in and around the property [See RPI Form 321];
  • common interest development (CID) documents, if applicable;
  • a local ordinance compliance report, disclosing the property’s compliance with city and county ordinances [See RPI Form 307];
  • an Annual Property Operating Data Sheet (APOD), disclosing the costs of operating the property and any rental income [See RPI Form 352, 562 or 318]; and
  • a rental income spreadsheet, regarding the rent roll for tenant-occupied property. [See RPI Form 352-1]

Remember, you are to include all property information — third-party reports and disclosures the seller or you prepare — in the marketing package you hand to prospective buyers the moment they request more information on your seller’s property. This information is not set out in a promotional flyer.

Also, prospective buyers interested in a property need detailed information on the property’s fundamentals to distinguish it from other properties they are considering, and to set the price when they prepare an offer to purchase your seller’s property.

In contrast, when you wait to deliver the marketing package and its contents to the buyer after the seller and buyer enter into a purchase agreement, you have made the disclosures in an untimely manner. For this tardiness, there are consequences such as:

  • the price set and agreed to is subject to a price adjustment before closing, or a refund after closing, on the buyer’s later discovery of undisclosed defects adversely affecting value.

These facts were known or should have been known by the seller or the agent to exist on the date the buyer and seller entered into a purchase agreement.



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