Jon Boyd Ann Arbor Real Estate Buyer's Agent

In Ann Arbor real estate most of the commercial landlords I've delt with are fairly on-the-ball.

They want to provide space for businesses and businesses want to rent space. Everything works out.

Obviously our office, The Home Buyer's Agent of Ann Arbor, specializes in helping home buyers, but a couple times a year we get a request from one of our past clients or someone who sees our activity on a national basis who contacts us and asks for help in leasing an office.

So, we had a client who was looking for some class A office space in a nice downtown area and we worked with a local company to negotiate a lease and they asked for our compensation to be paid when the tenant moves in. (We are normally paid at signing of the lease, because that is when the tenant leaves the deposit, but in this case we were OK waiting to the point of occupancy.)

So the tenant occupied the building at the end of February and we didn't hear anything from the landlord.

I called about four times to both the leasing agent and the broker, and my attorney also called over the following four weeks. No response.

The poor secretary ended up covering for the deadbeat broker, each time saying he would call back. But he never did.

So we went ahead and engaged an attorney to prepare papers for court.

As I was visiting the attorney's office to sign the papers for a summons and complaint, the attorney asked if I wanted to have him make one last call. I did so he did, and he actually got the leasing agent to answer the phone. She gave all kinds of excuses and eventually offered to pay us half the compensation then and the other half on June 16th.

Well June 16th has come and gone. I made a call to the office and the secretary acted surprised, like she had no idea that they had agreed to pay us.

So, this deadbeat ann arbor landlord burns up my time and energy trying to get paid. Thanks deadbeat!

More to come...

Loan Fraud

The link above is to an article in the Columbus Dispatch today about a guilty plea from a loan officer who worked for a national mortgage lender based in Ann Arbor. She, along with nine others, might be responsible for about 25 million in bad loans.

The funny thing is that at the bottom of the article you see another loan officer who hasn't been to trial yet named Jonathan Boyd. (My name.)

Don't worry. He is from Columbus and I've never worked for ABN Ambro. No relation. Never heard of the guy. (Although I did one time have a nut-case named Tom accused me of doing illegal refinances. I think he got some medical help so he seems to be doing better.)

Anyway, it struck me as kind of funny.

I can not comprehend the current asking prices of a couple of luxury homes in our market.

Here is the background, tell me if it makes any sense to you:

1. Luxury neighborhood in a nice area about 10 minutes West of Ann Arbor.

2. Asking prices for existing homes in the neighborhood are from about $600K to $1.3M.

3. There is a builder that is now offering new construction homes in the subdivision in the $400K range.

4. Ann Arbor home prices in general have dropped about 15% in the last two years with luxury homes hit worse than commodity homes.

5. Right now there is more than three years of inventory of homes like the subject homes.

Here is the issue:

There are two different homes in the neighborhood where the sellers have decided that their homes have gone up in value 20% to 30% from their purchase prices two years ago. Nothing other than maintenance done to othe homes. No comparables that can remotely justify this. The listing agents just say they think the homes are worth it. (I wouldn't expect them to admit a problem with the value to me as a buyer's agent.)

Am I losing my mind here?

Somewhere I know I posted a blog article about a home on Washtenaw in Ann Arbor that we almost helped a client buy.

I say almost because when the buyer's home inspector looked at the home he found EIFS that had been incorrectly installed. He couldn't determine if it was a $5,000 problem or a $30,000 problem so he recommended some actuall testing be done. The builder on this brand new $1.1 million home refused to have the issue looked at. He then accused us of being unreasonable and our buyer walked away. (Interesting note to add to this paragraph - this builder originally balked at providing a one year warranty on the home. It makes you wonder if he actually knew about the issue.)

Also interesting to note that the listing agent on this home told our REAL buyer agent that the home was stucco. Could it be that an agent who sells seven or eight million a year actually doesn't know the difference between synthetic stucco and real stucco?

For background - EIFS is Exterior Insulation Finishing System or synthetic stucco. It works fine if it is installed correctly on masonary walls. You see it every day when you drive by Taco Bells and McDonalds. But if it is installed incorrectly and on wood stud walls, watch out! Tens of millions of dollars in damage to residential homes across the country. Do a Google search on EIFS problems and you will see a sample of articles on the subject.

The problem is significant enough that we've heard some relocation companies will not provide employee buy-outs if the employee's home uses EIFS.

Now here is the new item:

I hear that recently a luxury home in Ann Arbor was sold and the inspection company did not inform the buyer of the EIFS on the walls and did not inform the buyer that EIFS was often a problem. The buyer closed and later sued the inspection company to the tune of about $40,000 for negligence. And fortunately the buyer won!

Again, this whole problem would probably have never happened if the buyer had used our office, because as a buyer agent we discuss these issues and inspectors. I'm sure the buyer used an office that only offered designated buyer agency. And I would also bet that the agent lied about the level of service and called it buyer agency.

I was helping a home buyer evaluate a home this week and I noticed that there was a basement wall that had been built with steel studs.

This is not unusual and certainly many if not most commercial buildings are built with steel studs. What was notable was that the wiring in the wall was just done with Romex and the studs I could see did not have the protective grommets that are required for code. (The steel stud can cut into the plastic sheathing on the romex if it is not protected by grommets.)

It may actually be a building code requirement to use armored cable with steel studs in Washtenaw County were the home is located. (I'll leave the details to a competent home inspector.)

So this type of mistake is not unusual for a homeowner finished basement. But it does present a significant safety problem and one that should be addressed, even if it means opening up the walls to inspect and correct.

The surprising thing is that this home was sold last year as part of the Pfizer relocation effort and it was reportedly inspected for the relocation company by US Inspect.

I asked the listing agent if he noticed the problem when the current owners bought the home last year and he said the buyers last year didn't have their own inspection. They just used the report from US Inspect.

So four important points here:

1. Be careful who you choose to inspect a home to buy.

2. Be especially suspect of any work done by the homeowner.

3. NEVER just use the seller's inspection report.

4. Use a real buyer's agent not a designated buyer's agent when you buy so you leverage the experience of the whole organization. Nobody in our office would have let the buyer use the same inspection. As a buyer's agent our whole office represents our buyers and we discuss each transaction as a group to make sure mistakes like this aren't made.

(Note: Unfortunately many of our local REALTOR members are confused by designated agency and get it confused with buyer agency. They are clearly not the same. The home seller who got stuck with this mistake is one example.)

I'll also bet the homeowner never received informed consent about the differences in level of service provided.