Selling Property- The Good, The Bad and The Fugly | EP520

Property investment is quite an expensive one, so we want to make sure that when you sign on that dotted line, you are happy with your purchase. Tonight, we are talking everything and anything in selling property. We are talking the good, the bad, and the fugly. Tonight, I'm also sitting with somebody who is no stranger to the Private Property Podcast, Mike Petropoulos, who is from Remax Advantage. Mike, thank you so much for joining us. Hi, Timmy. It's an honor to be back again, especially in your new studio, which is absolutely fantastic. Right? It's like one of those very beautiful, luxurious homes that you sell. For sure. I think I might be selling this next. So, tonight, we're talking about all kinds of property, especially properties that are not really in good condition when they are being sold, you know, and what happens in situations where somebody is selling a property, but it's not really apt. So, jumping straight into the conversation, have you had any issues before with sellers who are selling properties under the guise that it's a great property, but it actually isn't? So, I think I've been quite fortunate to be in the luxury space, where there's often a lot of money on the line here. The owners do take a lot of pride in their spaces, but a lot of these properties are also investment properties, and with that, you have tenants in place and situations like that. And so, I have had a few occasions where properties have just been left in pretty bad states, you know what I mean? Sometimes the owners know it, sometimes they don't. So, yeah, I've had a few occurrences like that before. Sure. And what would a responsibility of an agent be in this case? I mean, you are looking at this property and you thought it was great, and now you're actually discovering all of these things about it. What do you do in that situation? Look, so my job at the end of the day is to sell a property to a willing buyer, and it's very difficult to get buyers willing to purchase properties that are in bad states. So, from the first hand is, from a marketing perspective, I need to make sure the property is in the best condition possible, and that often involves, you know, knowing a lot of contractors and people that can fix any errors. Going in there, making sure that I do a good job of inspecting it, there isn't anything that's standing out, and things like that. But at the same time, I need to look out for buyers. As you said at the intro here, it is obviously a very expensive investment, and so I need to have their best interest at heart as well. So, if there is something that's a little bit dodgy, I need to bring it to their attention, bring it up with the seller as well, and make sure that, you know, everything is sorted. I'm not, there's nothing under, you know, something to be covered. Sure, and let's talk about maybe when you're going through this process of inspection, and you do spot something, and things happen, and also how do you get to a point maybe where you can even classify this property as even distressed, to say this is not really a luxury property. It is a luxury property, maybe because of how much it is, but because of the condition it's in, it has become distressed. Yeah, so I think, once again, it's all about a willing buyer. In order to be a willing buyer, you need to be 100% sure about what you are purchasing. So, this all comes back to the Consumer Protection Act. Essentially, the buyers need to know what they're buying. You're not going to buy a house, well, let's just say that you bought a house, and then all of a sudden you find out once you bought it that the roof is falling apart. It's in horrible condition. The seller should have known about this. There have been signs before. You were not informed of anything. If you had been informed at the time, you probably would not have bought the property. So, in other words, you weren't a willing buyer. The thing is, this has been hidden from you. So, number one is, if there is a problem, make sure that the seller has signed a declaration stating everything that's wrong with it. That way, the buyer does know what they're getting into, but at the end of the day, in order to be an inspector, there are inspectors out there which essentially have an inspection accreditation. So, they properly go into the place, assess it, all of that stuff. Unfortunately, agents don't have that capability to go into all the individual details like that. So, I would also suggest to buyers, and this happens a lot in American markets overseas, is that there's an inspection period where you get a qualified inspector to come through and take a look. Very apt there. And let's talk a little bit about these distressed properties or these properties that seemed to be great. Now, what is the process once you are in this selling process, or you have found a buyer, somebody's willing to buy it, but then they didn't know about all of these things, and they're now second-guessing their decision. What process do you now follow up after that? So, once again, tying it back to the Consumer Protection Act, they need to be aware of what they're purchasing. So, it definitely is very important for you to get a declaration signed by the seller. If it was disclosed, the seller's gone and disclosed, and the purchaser bought it anyway, they bought it. They were a willing buyer for that property, they were aware of it. In cases which they're not aware, you need to check, did the owner know about this? And if you can prove that the owner knew about it and hid it, then there's obviously a course for the purchaser to get out of the contract. But they have to prove that the owner was aware of it. If the owner wasn't aware of it, and there was an inspection done and things like that, I mean, sometimes things fall through the cracks. Unfortunately, you're going to have to just bear the loss. But I think the main thing is make sure that you, as a purchaser, you do your homework, get an inspection, and know to the best of your ability. And with the relationship between the real estate agent, in this situation where we are having something like this, is there anything that a real estate agent like you would need to do in terms of informing the seller or the buyer in terms of what they need to do? Is there anything that you would advise even a real estate agent to say this is something that you need to do to ensure that your consumers are protected? Yes. So essentially, for all sellers, as soon as I get the mandate, I make them sign a declaration. I need to know exactly what's wrong with this property. I don't want to be caught where I'm giving the incorrect information. I'm here trying to get the purchaser to buy it, and I want them to buy it, and I don't want them to be stuck with a property that they don't want. So off the bat, I would say get a declaration from your seller. That's what you have to do. Go through as well. Basically, don't take anyone's word for it either. If a seller says, no, no, no, it's perfect. All the plug points are working. I'm sure about that. Make sure that when the transfer process is happening, that there is an electrical compliance done. Attorneys often in the transfer process ask for this stuff, but make sure that you're also aware and you tell the sellers, listen, before you sell, get a certificate of compliance. Let's make sure everything's working. So those are the steps that you should go through with the transfer process. So number one, get a declaration. Number two, try and get the purchasers to bring an inspector and a qualified inspector to take a look as well. Do your due diligence, and then also make sure that all the certificates are in check as well. Sure. Let's talk consequences for a seller who now is selling this property and they're found to be dishonest about something that you were able to prove that this was there. It is a preexisting issue, and now they have tried to sell this property with this issue. What then happens? So, I mean, the recourse can be that the buyer, because the problem is so bad, they essentially try and get out of the contract. So now if you can prove that whatever was provided with the... So what I often do is I have an offer to purchase in place, and then with that, I write in a suspense of conditions saying that a seller's declaration needs to be signed within a certain period. Now, in the event that the declaration was signed incorrectly and you can prove, and the buyer can prove that the seller did know about an issue, or I can even prove that the seller knew about an issue but didn't disclose it, the recourse can be that they have to fix it, in which case it all goes through the legal process. So the purchaser can either go through a legal recourse to get out of the contract, or can essentially continue with the contract in condition that the seller brings it to a reasonable condition and solves the issue. Sure. As we wrap up our conversation tonight, any word of advice to all these categories of players in terms of buyers, sellers, as well as real estate agents when we are looking at selling or buying a property? So I think it all comes down to do your homework. As an agent, I would say make sure that your seller wants to sell, and for the right reasons. If they're just trying to get rid of the property because it's in horrible condition, make sure that you have gone through, get that seller's declaration, make sure you know everything that's wrong with the place, know the product. As a seller, if you are trying to sell this property, try to get it to the best condition possible. Bring an inspector before you even start the process. Find everything that's wrong, and speak to your agents about getting contractors together. And that's another thing. As an agent, we need to have these connections in the industry. Who's a good painter? Who's a good electrician? You know, that type of stuff. And then as a purchaser, do your due diligence. If you can work it into a contract, try and have a suspense of conditions saying that this is subject to an inspection being done. Do your homework is essentially what I can say there. Well, thank you so much for joining us and really sharing these great, great insights, and we really, really appreciate it. Thank you so much for joining us. Have a good one. Absolutely. Thanks again. So you heard it yourself. If you are a seller, make sure that you get that product right. If you are an agent, make sure that you know your product. And if you are a buyer, make sure that you do your due diligence. And one of those things that you do to ensure that your property knowledge is on par is watching shows like this and being on the podcast and making sure that we give you the right information. Thank you so much for joining us tonight as we talk anything and everything property. Until the next time we see you, have a good one.