From puppies to old dogs: The weird world of home-sale clauses

By Michele Lerner July 31

Maybe some Virginia lawmakers have watched too many episodes of “Breaking Bad.”

Home buyers in Virginia now have one more request they can make of sellers: to disclose whether the property has ever been used to manufacture methamphetamine, and, if so, whether the property has been appropriately cleaned up.

“So far I haven’t come across anyone who has actually used this new meth lab disclosure form, but it [went] into effect July 1, and we’ll have to see if anyone makes an offer contingent on a promise to clean up a drug lab,” said Morgan Knull, an associate broker with Re/Max Gateway in Washington.

Ned Rich, managing broker of McEnearney Associates in Washington, said in the white-hot D.C. market, most buyers are eliminating as many contingencies as possible on their contracts. In some cases, it’s the sellers who add contingencies to their counteroffers.

“At least in the city, it’s somewhat common to have a contract without even a finance, appraisal or termite contingency,” Rich said. “Some sellers ask for a contract contingency of their own — to live in their home rent-free after settlement for a certain period of time.”

Homeowners often prefer to sell first and then find a home to buy so they don’t have to make an offer contingent on the sale of their home, said Kris Paolini, a real estate agent with Redfin brokerage in Rockville, Md. He recommends that buyers offer a free rent-back of a month or two to make their offer stand out above the competition.

Rich said that some buyers try to avoid competition with other buyers by making an early offer that’s valid for only 24 hours.

“In one case, the sellers said they would review offers on a Tuesday, [but] the buyers made an offer the previous Saturday for $100,000 over the list price with the contingency that it had to be accepted that day,” Rich said. “They got the house, but sometimes if the offer is for full price or a smaller amount over the list price that technique doesn’t work.”

Knull said some buyer’s agents are offering what they call a “signing bonus” of $10,000 or $20,000 to sellers contingent on their accepting an offer within 12 to 24 hours, which psychologically pushes sellers to make a quick decision.

A quirkier contingency involves a version of the movie “Ghostbusters.” In fact, the Maryland Association of Realtors said that written disclosure of the existence or the belief in the existence of a ghost in a property, while not legally required, is “recommended.”

“I’m working with buyers who want to buy a renovated house that was built in 1868, and one of the buyers’ father joked about whether it came with a ghost,” said Kate Hurley Christofides, an agent with Century 21 New Millennium in McLean, Va. “The buyers actually asked me to reach out to the sellers and the listing agent to ask about it, and then the home inspector asked for additional information prior to the inspection about whether there was a ghost in the attic.”

You can also find out if someone died in a house by visiting, where, for a small fee, you can enter an address and find out about deaths that occurred in the property, fire-related incidents and yes, even whether a meth lab was ever found there.

Contract contingencies can be requested by either the buyers or the sellers, but that doesn’t necessarily mean the contingency will be accepted.

“There’s a big difference between proposing an addendum to a contract and accepting it,” said Eldad Moraru, a realty agent with Long & Foster Real Estate in Bethesda, Md. “Sometimes you can’t actually write an addendum to a contract but you can do a­
‘de facto’ contingency. For instance, some buyers with little kids wanted to make sure there were kids of similar age in the neighborhood so they could grow up together. The buyers couldn’t put that concern in the contract, but they knocked on all the doors around the block to meet all the neighbors and decided there were enough kids before they wrote the offer.”

Atieno “Ati” Okelo Williams, owner of DC Home Buzz, a real estate agency in Washington, said she worked with buyers who accepted a counteroffer from the sellers who decided that none of the Japanese maple trees on their property would convey with the property. The sellers uprooted three trees to transplant them to their new home.

One of Williams’s buyers made an offer on a condo in Washington’s Columbia Heights contingent on an evaluation by a feng shui specialist to determine whether the home had the right energy, although the buyer waived the standard home inspection. The sellers agreed, and the feng shui specialist gave the green light to the transaction.

A more common contingency, typically acceptable in a slower housing market or on a home that has lacked offers, is for the buyers to make their contract contingent on the sale of their current home.

“If the sellers and their agent have an idea of whether the buyers’ home will sell quickly or not, that might make them willing to accept a sale-of-home contingency, but I had one case when the buyers made their offer contingent on the sale of their home in Lithuania,” Knull said. “That offer didn’t get accepted because no one knew anything about the Lithuanian housing market and what it would take to get that property sold. Eventually, those buyers just sold their home first to avoid the issue.”

Sometimes, buyers are willing to overlook the quirks of a listing in order to become homeowners. Chris Fries, an agent with ­McEnearney Associates in Arlington, Va., said he recently represented first-time buyers looking at a condo with a listing that read “two storage bins included in the sales price.”

“They were excited that the place had storage for homeowners, but when we asked to see the storage room we were directed to the laundry room, where there were two of those standard-size Rubbermaid bins with lids,” Fries said. “We thought that was pretty creative of the sellers, but the market is so hot that the buyers were happy just to get the condo.”

Storage issues and personal possessions often crop up in the midst of contract negotiations. Vanessa Bailey, an agent with ­Redfin in Maryland’s Anne Arundel County said when she notices that sellers have a lot of belongings they may not want to move or when she knows they are downsizing, she recommends that her buyers offer to ease the situation.

“I tell my buyers to offer to let the sellers leave their unwanted belongings behind and ask the buyers to take care of removing them or possibly keeping anything they want,” Bailey said.

Sometimes, sellers want to remove property such as a chandelier, which, unless it’s written into the contract, will convey to the buyers because all attached items are considered part of the home.

“If the sellers want to keep something, it’s really best to take it down before the house goes on the market,” Moraru said. “I’ve also had buyers who wanted to buy the sellers’ furniture, but it’s important to decouple that from the contract and arrange this with a completely separate bill of sale. Lenders typically won’t let personal property be part of the contract; only real property can be part of the financing arrangements.”

Sometimes, even the family pet becomes part of contract contingencies. Christofides worked with buyers who were looking at a property in Virginia, where the sellers had an elderly dog.

“The sellers wanted the buyers to adopt their dog because they thought it was more important for the dog to stay in the house than with them,” she said. “They wanted the dog to be able to die in its old home. The sellers didn’t actually write this into the listing; they just had their listing agent tell buyers that if they like the house they need to know the dog comes with it.”

Knull said he has seen contracts for condos with a “pet approval” clause written in, with the contract contingent on the buyers’ dog or cat being approved by the condo board. He said it would be better to check on a pet approval before an offer is made if possible.

“I’ve also seen a contract contingent on a job offer,” Knull said. “The buyer had a verbal job offer but not a written one yet. Deciding whether to accept that offer depends on the credibility of the buyers.”

Sometimes, buyers write contracts contingent on someone else’s approval of the property, such as adult kids who are getting money from their parents who need parental approval of the purchase, Knull said. In other cases, the “kids” are buying a place for their parents and need them to see it before finalizing the transaction.

“They’ll often put this in simultaneously with a home inspection, so basically they’re being honest and saying if they want out of the contract, they’ll get out one way or another,” Knull said.

Contract negotiations can get more complicated when there are tenants living in part of the home. Paolini said one of his buyers was interested in a property that had a tenant downstairs and one upstairs as well as the owners’ section of the house. The tenants were on separate leases, and the sellers asked whether the downstairs tenant could stay.

“My buyer met the tenant during the home inspection, and they worked out the details to continue the lease,” Paolini said.

Antonia Ketabchi, an agent with Redfin in Montgomery County, Md., recommended that her buyers allow the sellers’ tenants to stay on for 11 days after the closing to complete their lease.

“Every situation is different, and a contingency can work or it can backfire,” Rich said. “The important thing is to listen to your agent because good agents know the market, know what will work and know what won’t work.”

Michele Lerner is a freelance writer.

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