Greater Hartford Real Estate Blog

I had an agent, “Pat,” contact me this week about one of my listings. Pat’s clients were interested in the house and considering putting in an offer. Pat proceed to ask me how “creative” my clients were. Being left-handed, I’m always open to creativity, so I asked for an explanation of what they had in mind.

Pat gave me some details about how the contract would be structured and then mentioned that the buyers would be looking for my client to cut them a check outside of closing in order to cover repairs on the house. The buyers were short on cash. I told Pat that they were welcome to submit an offer and we would review it. But something just didn’t seem right about Pat’s “creative” deal. Shouldn’t everything should be handled by the closing attorneys and documented on the HUD sheet?

When I got off the phone with Pat, I called a trusted mortgage broker that I use. After explaining the situation, he confirmed that what the agent was suggesting was indeed mortgage fraud. Any payments, credits, etc. need to be called out on the HUD so that the mortgage company knows about them. Anything done outside of closing is illegal because it implies that the house is not really worth the value that the mortgage company is loaning against.

The mortgage broker suggested that Pat might not know that the deal would be illegal. I pointed out the fact that the agent had been in real estate for 15 years, so I was fairly certain that Pat did know that their suggestion was questionable, at best.

The sad part about this situation is that there is likely a way to structure a mortgage so that Pat’s clients can afford the house, legally. If we do actually receive this offer I will be going back to my trusted mortgage person to determine how the deal can be funded so that they can buy the house, and no one is committing fraud.

It’s frustrating to see that this knucklehead is willing to risk their real estate license by playing these games. And how is it ever in your client’s best interests to suggest something illegal to them?

Looks like Max’s Oyster Bar was able to escape a huge rent increase and will be sticking around West Hartford Center after all. Facing a 50% increase in their rental expense after missing a rental agreement deadline, M-O-B averted eviction when a court ruling went in their favor last Friday. So, grab a bowl of New England Clam chowder and some mussels on the half shell and celebrate…

As an aside, this story highlights the importance of reading the details in all contracts you sign and making note of dates that require you to take an action. The consequences could otherwise be very costly.

This week I went to preview a house for some clients. They indicated interest, so rather than waste their time, I went to check it out to see if the floor plan would meet their needs.

The house is in a very desireable neighborhood in West Hartford. I walked around the first floor and the layout seemed to meet their needs. So far, so good. Then I checked out the upstairs. Good sized bedrooms and a master bath. Perfect, just what they’re looking for. I’m heading for the front door and then realize I should also look in the basement to see if the mechanicals have been recently updated. I turn on the light and a nice surprise, the basement looks finished. Ah, extra square footage, always a good thing. I walk down the steps and as I land on the carpet I hear “squish.” Huh, what was that? I take another step. “Squish.” “Squish, squish, squish.” The basement carpet is soaked.

Swell. Is a pipe broken? What is going on here? The listing office told me that the homeowner is gone for several days, so no one knows about the issue but me. Time to investigate to see if I can figure out what caused it and determine if it’s still actively flooding. Squish, squish, squish. Nope, the pipes seem fine. There are what appear to be older water stains on the carpet and the soaking area is below a basement window. Must be the gutters overflowed during the massive rainstorm we recently endured, directly into the basement window. I trek outside to see if my theory is right. Yep, there is gunk sticking out of the gutters and the mulch around the window well has been completely washed away. At this point I call the listing agent’s cell phone and leave a message for him explaining the issue, as I know the home is vacant for a few days. He never calls me back to acknowledge he received my message or ask me about the situation.

Before I left the house I picked up the Seller’s Disclosures that were provided. They indicate no issues with basement water seepage or dampness. But there was a dehumidifier in the basement, there were older water stains, and I just saw that it was flooded. My disclosure to the other agent has now made this a material fact, which means that, legally, he should disclose this going forward. Will this happen? Most likely not. Did I tell my buyers about this issue? You betcha. If they have any interest in the property I will urge them to get a mold test and ask for monetary concessions to deal with the problem.

This type of situation probably happens all of the time because disclosing an infrequent problem is unlikely to be seen and would only reduce the price a seller can get for the house. This type of deception is illegal, but likely happens on a regular basis because there is a stong financial incentive to do so. I was just fortunate enough to see the problem at its worst, so if my buyers are interested I can adequately protect them. This just illustrates the importance of getting a home inspection in order to further protect your future investment.