New Smoke & Carbon Monoxide Detector Law
Starting January 1st, 2014, the New CT Law Takes Effect. Below is a summary of the law:
Before transferring title to a one- or two- family dwelling, a seller must submit an affidavit to the buyer certifying that the house is equipped with working smoke and carbon monoxide (CO) detectors if the house has a fuel-burning furnace, fireplace, or attached garage, or was built before October 2005.
The detectors must be working at the time of the buyer’s building inspection. Smoke and CO detector batteries should be replaced every
year and the detectors themselves should be replaced every 10 years.
The detectors must be placed so as to warn the occupants of each bedroom. Smoke and The CO detectors must show the concentration of CO.
If the Seller doesn’t have the detectors in working order at the time of the inspection, the seller will be required to provide a $250 credit to the buyer.
Concealing Defects can be Expensive
Home owners selling their “mint condition”, “like new” home learned the hard way that their efforts to conceal existing serious defects had consequences – expensive ones.
The Story. Before the buyers purchased their home in 2003, they knew from the seller’s residential property condition disclosure report that there was no water seepage, no dampness, and no drainage problems. The property inspector found nothing defective from the physical inspection of the property and noted that the house’s interior had been freshly painted.
The buyers relied on the sellers’ representations of “mint condition” and “like new” in the MLS, the property condition disclosure report and the physical appearance of the property. The sellers later stated that “new” actually meant since 1999 when they bought the property and made some repairs, but the interior paint job was recent and the lower level family room carpeting had been installed six months prior to the sellers selling to the buyers.
When the new buyers moved in, they subsequently found the lower level carpeting soaking wet so they pulled it back, discovering evidence of water seepage and new wood surrounding water-stained rotting wood that apparently had existed before the carpet had been laid. They also found mold in a utility room that neither they nor the inspector had seen because the room was crammed full of storage items and evidence of long standing rot and mold caused by water seepage behind new sheetrock. The buyers took pictures to document the problems.
The buyers filed suit against the sellers and the real estate agents alleging that both the sellers and the real estate agents knew about the water damage/defects and knowingly misrepresented the condition of the property as “mint condition” and “like new” to induce the buyers to buy.
The sellers argued that they saw nothing indicating water seepage, mold or rot (the court did not believe them), that the buyers relied on their own personal inspections of the property and that of their inspector’s (they should have hired a competent inspector), not on the seller’s representations.
The court held that if the sellers had had no knowledge of the defects their argument might have worked, but these sellers could not have been ignorant of the defects (the buyers’ pictures told the story) and were found to have had actual knowledge.
The court dismissed the real estate agents from the case when it determined that they had no knowledge of the defects or the cosmetic cover up.
The sellers were not so lucky. The court found that:
- the sellers had full knowledge of the defects;
- the hidden defects were not reasonably ascertainable by a visual inspection;
- the buyers relied on the written MLS information and their physical inspection;
- the cosmetic treatments to disguise the defects were “designed to mislead these buyers and their inspector who had no way of knowing what existed behind the replacement walls, conveniently ‘freshly painted'”; and
- the buyers would not have bought the property had they known of its condition.
The Court’s Decision. The court found that the sellers hiding known defects was outrageous conduct and awarded the buyers $92,282 for repairs and
$25,000 for emotional distress.
Reminder to Listing Agents. Remind sellers 1) that knowingly misrepresenting their property’s condition can be costly as a court can, as here, award damages to repair known hidden defects, and 2) negligently causing property damage can encompass emotional distress if the distress can be foreseen.
*Camerone v. Phillips, Docket No.: CV03-0483400S, (1/17/07).
WHAT SHOULD BE CONSIDERED IN PRICING A HOME?
Location
Some locations tend to add value, some tend to decrease value. For instance, locations near the water or with level yards or near town, tend to add value, whereas locations near a highway or in the airport’s flight path tend to decrease value. We have no control over location. Our job is to realistically set a price that reflects your location’s value as perceived by the buyers.
Size
The amount of land, the finished living space inside your house and the amount the town will allow it to be expanded, can add or decrease its market value. We have no control over these issues. Our job is to realistically set a price that reflects your home’s size.
House Style
At different times, some house styles are more appealing to buyers than others. We have no control over buyer’s tastes. Our job is to realistically set a price that reflects the current preferences in home buyer’s tastes.
Neighboring houses
The size, style and condition of neighboring houses can influence the price of a home. If a home is the largest one in a neighborhood, its price will tend to be depressed. If it is the smallest home in the neighborhood, its price will tend to be pulled up by its larger neighbors.
Market Conditions
Economic conditions, interest rates and market direction are factors that directly influence what buyers are willing to pay. Our job is to factor in these conditions when we establish price.
Competition
The number of similar properties for sale in Greenwich and in your neighborhood is your competition. It requires a Realtor with experience, knowledge and skill to sort through the possible competitors and determine which are truly competitive – some will be overpriced, some on the market too long and some may be very well priced. The larger the inventory of competitive homes on the market, the more careful we have to be in pricing to compete with them. Homes that are overpriced will help direct buyers to homes which are priced more intelligently.
Homes which have sold
It is fundamental to look at the prices of homes which have recently sold. To properly analyze these homes, a Realtor must have a good knowledge of their condition and the other attributes which influenced their selling price. It is also important to look at the Days these homes were on the Market and the number of price reductions.
Homes which did not sell
Equally important to review competitive houses which did not sell because the were withdrawn by their owner or the listing expired. In most instances, these were significantly overpriced. No Realtor, no matter how good, can sell a house for more than it is worth.
Special Features and Amenities
Sometimes a home’s unique features and amenities add value, sometimes they actually decrease value. For instance, a pond in the back yard may attract some buyers, but others will reject the house because of a perceived danger to their children. In the same way, some buyers may be attracted by a home deep in the woods with great privacy, others may not want such an isolated house. Our job is to evaluate the impact of these features on price and to present them in a positive manner.
Condition and Curb Appeal
The condition, decoration and curb appeal of a home affects its value in the market. Most buyers can only imagine the house as it is. We can help you decide what can be done at little or no cost to maximize your home’s appeal. We can also help you decide which improvements will be worth the investment and which will not. However, some elements of curb appeal may not be changeable. Even though the owners of a house have adjusted to a perceived problem, noise from traffic or trains, unsightly towers, all tend to detract from what buyers will be willing to pay.
WHAT MAKES A HOME SELL QUICKLY AND FOR THE RIGHT PRICE
Value Is Determined by the Educated Buyer
The ultimate selling price is determined by prospective buyers whom we are able to contact. The average buyer in the Northeast looks for 10 weeks, during which time they see an average of 11 homes. We call this buyer the Educated Buyer. Buyers in Connecticut are represented and counseled by their own Realtor. Together they will compare a home with other offerings in the buyer’s price range and make judgements. Buyer Brokers have a strong incentive to council their clients against over priced homes. They know that if a client overpays, they will be embarrassed when their client wants to sell their home. Buyer’s brokers also know that even if their client wanted to overpay for a property, they probably would not be able to get a mortgage. It is critical that a home be competitive in price and appeal with the other options that these prospective buyers will be considering.
Effective Marketing to other Realtors is Essential
It is axiomatic that the larger the market you can reach and the higher the quality of that market, the better the price you will realize. It is important to note that, in spite of the substantial sums of money spent on advertising, this source accounts for only 7% of the actual buyers attracted to a property. The internet accounts for 11%, home books and magazines account for 1%. It is the marketing efforts of the cooperating brokers in the Multiple Listing System which represents almost 80% of the real market of interested buyers who are ready, willing and able. It is to this 80% that most of the marketing effort should be directed.
An appropriate listing price will, immediately and consistently, attract the greatest activity.
When a property is first exposed to the market, both buyers and brokers make instant evaluations of the offering and, if it compares favorably with what they have already seen, it will stimulate offers. Your listing price must be realistic enough to immediately attract the attention. If it does not do so, while competitive properties are attracting attention and generating activity, you have a clear indication that the listing price is not meeting the acid test of the marketplace.
A home that is priced realistically and marketed effectively will sell for the best price.
Homes that languish unsold on the market for months or even years are ignoring the facts of real estate life, often causing unnecessary inconvenience and financial damage to their owners.
By the time an overpriced home is finally reduced to its real market value, it may be too ‘aged’ for buyers to offer full price. Buyers begin to wonder why the property hasn’t sold. “Why did other buyers reject it?” “There must be something wrong with it.” If this happens to a property, Realtors often say the property has become ‘stale’. When this happens to a new issue in the stock market, the company is said to be the “living dead.” Have you ever asked how long a home has been on the market? What conclusion did you draw?
WHY DO HOMEOWNERS OVERPRICE
Why do educated, intelligent business people who understand real estate and pricing principals so frequently overprice their home?
At some percentage over market value, no reasonable amount of time will produce a sale. Even when priced right at the market, it may require a month of exposure to sell. In Greenwich, on average, homes priced within 5 percent of the eventual sale price sell within three months. Homes priced 5-10 percent above the sale price sell in five months. Homes priced 20-30% above the eventual sale price usually take about 14 months to sell. Some properties never sell and are eventually withdrawn.
Over improvement
Some improvements will increase the value of your property. However, many will not. Over improving your property can add enjoyment, but you should not expect a buyer to pay the original cost. See the figure on substitution.
Need
An owner’s need for money does not increase the value of the property.
Buying in a higher priced area
Values are location specific. Even within Greenwich the value of a property is determined by its neighborhood. Moving to a more expensive area, even if the size of the house is the same, does not increase the value of the existing house.
Original purchase price high
If you used a Realtor who represented you (Buyer Agent), chances are you paid market value. If you purchased an Owner Listed Home you may have paid too much. It is also possible that your area has not experienced the same growth as other areas.
Lack factual data
Base your opinion of value on recent documented sales prices. Once you have selected a Realtor, their job is to educate you about the market and about pricing strategy so that you can make the best decision. The opinions of well meaning neighbors and friends about your home’s value have, unfortunately, little impact on what buyers will be willing to pay.
Bargaining Room
Buyers may offer low, but they will do that at ANY price. It is easier to negotiate up to fair market value than to an inflated price. At fair market value, you often receive more than one offer. This kind of buying frenzy often results in offers above the offering price.
Move isn’t Necessary
Even if the move isn’t urgent, it is important to price correctly to preserve your marketing opportunities when the move becomes urgent.
Corporate buyout
Third party companies purchase thousands of homes a year, so the offer you receive is usually market value. Market your home very close to that price.