Banker & Tradesman: Rain Dampens Spirits of Realtors, Sellers

[Guest guest]

Rains Dampen Spirits of Realtors, Sellers

May 22, 2006

By Aglaia Pikounis

The recent torrent of rain that saturated much of eastern Massachusetts and

other parts of New England forced real estate brokers to cancel a slew of open

houses, reschedule showing appointments and field a flurry of calls from

nervous homebuyers and sellers.

Real estate agents in communities that experienced flooding – including

Haverhill, Methuen, Peabody and Lynnfield – were scrambling to rearrange their

schedules to accommodate clients.

“It’s disrupted our business,†said Bob Meehan, who manages the Century 21

North Shore offices in Peabody and Danvers. “No one is in the mood to show

their home when you must access it by boat.â€

The heavy rainfall also created concerns for homeowners who are selling homes

that suddenly saw water seeping into their basements for the first time ever

and for buyers who have made offers on properties where flooding occurred.

“It does create a little more stress for the sellers and the buyers,†said

Jim Armstrong, a Salem broker who decided not to have an open house for a

single-family home in Hamilton after hearing the dismal weather forecast last

week.

During a final walk-through at a single-family home Armstrong had listed for

sale, he and the buyer went to the partially finished basement only to see a

“stream†flowing through it. The sellers, who had lived in the house since

it was built in the 1960s, said they had never had a water problem.

The buyer sent an e-mail to Armstrong early last week requesting that the

homeowner install a sump pump. Armstrong said he contacted the home seller and

will recommend that the pump be installed. The closing was scheduled for last

Wednesday.

“[The flooding is] probably not going to happen again,†said Armstrong,

broker-owner of Armstrong Field Real Estate and treasurer of the North Shore

Association of Realtors. “But I think [installing the pump is] a small thing

to

do to make this [transaction] happen.â€

J. Moriarty Jr., president of the Real Estate Bar Association and an

attorney in Boston – which received plenty of rain but was spared the major

flooding seen on the North Shore – said since most purchase-and-sale

agreements

include language that a property must be delivered in the same condition

with the exception of reasonable wear and tear, buyers may be able to back out

of a transaction if significant water damage occurred.

Even if a seller makes repairs, a buyer could argue that there’s the

possibility of a mold problem or that the property is not in the same condition

as

when he or she agreed to buy it, according to Moriarty.

“I think that someone can make a legitimate argument if there was substantial

water damage to a property that it was not in the same condition and perhaps

make an argument that it can’t be restored,†he said.

Homeowners who purchased a home recently and were told by the sellers that

the basement was dry and there was never a water issue but were confronted with

puddles in the basement during this past storm are not likely to have

recourse unless they can prove that the seller was lying, Moriarty explained.

“Unless the seller lied and deliberately withheld information the house is

yours, water and all,†said Moriarty, a partner at Marsh, Moriarty, Ontell &

Golder.

An Ideal Opportunity

Many Realtors are advising home sellers to disclose water seepage and other

issues related to the condition of the property in statements that are given

to prospective homebuyers.

Armstrong, for example, represents two homeowners who were going to put their

properties on the market last week but called to say they had 2 inches of

water in their basements. The sellers said they had never experienced water

problems in the cellars, but Armstrong said the water issue must be disclosed

to

potential buyers.

“It will go on the seller statement that they did get water during the storm,

†said Armstrong, who delayed putting both homes on the market. But because

the heavy rainfall was unusual and because the basements aren’t finished,

Armstrong said he won’t recommend that the owners take any other types of

measures – such as installing a sump pump.

Economo, who manages the Lynnfield office of Coldwell Banker

Residential Brokerage, said at least four open houses were canceled in the

Peabody

area.

With much of Peabody’s downtown underwater and many streets blocked off to

traffic, it was nearly impossible for agents to get to showing appointments in

that city and surrounding communities.

A significant stretch of U.S. Route 1 and other major roads were closed so

agents canceled showings last Monday and Tuesday, according to Economo.

Many agents couldn’t make it into the office last Monday because they were

busy pumping out flooded basements, added Economo.

Economo, who canceled a weekly sales meeting so agents wouldn’t have to waste

time sitting in traffic trying to get to the office, said he advised agents

to check vacant homes that are listed for sale for any damage during and

after the storms. By doing that, Economo said, he hopes to get any necessary

repairs under way quickly to minimize damage.

“We’re not really in the property management business, but we certainly want

to look out for our clients as much as we can,†he said. “There are a

number of houses that got water that never got water before, or haven’t

gotten

water in 20 or 30 years.â€

A home seller that Economo’s office represents went to his vacant Lynnfield

property to make sure that the sump pump was functioning properly and was

shocked to discover that the pump had been stolen.

Jefferson , a Realtor in the Haverhill office of Coldwell Banker

Residential Brokerage, said there is now an ideal opportunity for serious buyers

–

particularly buyers who are just days away from closing on a home – to see how

homes have held up in such destructive weather.

“Those buyers want to go out and see how the house handles weather like this,

†said .

, a lifelong Haverhill resident who said he has never seen a storm wreak

as much havoc on the city as this past deluge of rain, said he was surprised

at how busy he was over the weekend.

“The serious buyers are out there,†he said.

An open house for Nichols Village, a senior living community in Groveland,

went on as planned on Saturday, May 13 – a day when much of the region was

being drenched by steady rain – and at least 15 people showed up, according

to

.

On that day, also showed four of the 10 homes he has listed for sale in

the Haverhill area. Out of the four, three homes had puddles in the

basements, he said.

A soggy basement didn’t seem to put off at least one buyer that showed

a home to that day. was scheduled to meet with the buyer last Monday

afternoon to write an offer for the home, located in the Bradford section of

Haverhill.

“Most buyers … want to see what the seller statement says. I don’t think

[water in the basement] turns them off. It’s more about what they have to

expect

from that home,†he said. “We tell sellers to be honest and upfront [about

the property condition].â€

In Peabody, Meehan, the manager of Century 21 North Shore, said that nearly

all of the property showings that were scheduled were cancelled by either the

homeowners or the prospective buyers.

Meehan said it was up to the agents to decide whether to have weekend open

houses, but because of Mother’s Day fewer were scheduled anyway.

Some worried homebuyers were busy calling their agents last week to get a

closer look at properties they intend to purchase. A number of homebuyers who

are close to finalizing the purchase of a property have requested to do a

walk-through a little earlier than usual to “gauge the water situation,â€

noted

Meehan.

Most agents who represent buyers will recommend that they revisit a property

to see how the heavy rains affected it, he said.

“It’s a chance to see the home in the worst-case scenario,†he said.

Last Wednesday, Gov. Mitt Romney asked President Bush to declare a “major

disaster†in Massachusetts for the purpose of speeding assistance to Bay State

residents and businesses. On the same day, he said that aid request differs

from one he planned to file for public assistance to reimburse the state for

its costs.

©2006 The Warren Group Inc., 280 Summer Street, Boston, MA 02210. All

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