By Gary S. Mueller, Mueller & Associates, LTD
July already! Maybe July will bring sun and warmer weather rather than constant rain! Argh.
There has not been a great deal of new matters to discuss in the real estate industry. From time to time, I like to provide reminders about scams in the industry and other changes in the industry that may affect us locally. The following is my attempt to address some of these situations.
Concerning scams, the official looking letters to buyers offering to provide a copy of the deed to the property that the buyer “needs” to be able to prove ownership in the new residence are back again. Please make the time to remind your buyers that the “special offer” of $74.99 to do this is a scam and is NOT required to prove ownership. I do what I can to remind our clients about this every closing.
Another scam concerns the “contractors” who approach homeowners after a severe weather event offering to handle the repairs to the home provided the homeowners sign off on any rights to any insurance money and dealing with the insurance company---the “contractor” will handle everything for the homeowners. Typically, the “contractor” gets the check from the insurance company and little to no work is performed on the property. As a result, homeowner still has a home in need of repair but no longer has any insurance proceeds to put against the cost of repairs.
Yet another scam concerns mainly senior citizens as targets. Persons will come to the door indicating that they are from the Cable company or the Electric company and need to review the owner’s last invoice to ensure all services being provided to the residence match the amount being billed. When the owner goes to retrieve the last bill, the person or persons enter the home and rob the owner. In short, remind any and all seniors NOT to fall for this. If there are any questions about billing, the cable company or the electric company will typically call first and discuss the situation from there. No one from either company will simply show up to anyone’s home unannounced and without a prior appointment.
Concerning court matters that affect the real estate industry, the Illinois Supreme court, in Sienna Court Condo Ass’n v Champion Aluminum Corp over-ruled Illinois precedent to hold that buyers of new homes cannot sue subcontractors under a theory of breach of an implied warranty of habitability. The buyers may still seek redress from the general contractor with whom the buyer has a direct contractual relationship.
Finally, the issue of earnest money and the sufficiency of earnest money is coming back into vogue. As I have written before, the 7.0 Multi-Board Committee seriously considered doing away with earnest money all together as there are so few scenarios and situations where earnest money is turned over to the seller in exchange for releasing the buyer from a contract. What I would prefer to see is an increase in earnest money (not really a new thought). What if we actually pushed buyers to provide $5000 or more for earnest money? In my view, the increased earnest money would encourage the buyer and the buyer’s attorney to stay focused on the contract and the terms of the deal ---for fear, inter alia, of losing the earnest money. I realize $5000 is a large number, but the increase from $500 or $1000 must start sometime and now seems as good a moment as any.
Hope all else is well for you and that your business plan is bringing your prosperity and success. Keep plugging. Stay relevant. Enjoy the sun, when it finally arrives!