This article was Posted on Sat, 12/03/2005
Buyers need to find honest, hard-working agent

By Ron Rossi
Special to the Mercury News

In the 10 years I've been writing this column, the residential real estate market in Silicon Valley has ebbed and flowed a number of times. Currently, some pundits are predicting that the home market may decline. Some say it will fall hard. Others say it will fall soft. Still others say it may not fall at all but keep accelerating.

No matter what happens, a lot of buyers still won't know how to protect themselves when buying a house.

Since a house is usually the single most important investment a family can make, I've been amazed over my 34 years of practice as an attorney to see how many buyers are clueless and how some real estate agents remain in the dark when it comes to the complexities of home buying.

In our practice, we see example after example of home buyers making serious mistakes, often thanks to being guided by agents who don't understand the legal complexities or the standard of care well enough to protect their buyers from minor problems and outright catastrophes.

I've learned to operate on the assumption that many sellers have partial or total amnesia regarding certain property defects and therefore fail to disclose, either intentionally or inadvertently, issues that would affect a buyer's decision to purchase.

How can buyers protect themselves?

The first step is both the most obvious and the least understood or followed. It's this: Find an agent who knows what the heck he or she is doing. Many buyers, however, prefer to find someone who's willing to cut his or her commission as part of a loan package or to hire one of their friends who just got a real estate license to help with the transaction. These choices can lead to disaster.

Let me give you an example of what a good agent can do.

I recently bought a rental house. My agent is straightforward and knowledgeable, with many years' experience. The market was hot, and I was busy, with little time to look at properties. When my agent showed me the property I ultimately purchased, before I got out of the car to look at it, I knew the following:

• There was a high-tension power pole about two blocks away.

• There was a grammar school on the next street over.

• The cement on the driveway was cracked, and the roof likely had major problems.

Before I even opened the front door, my agent filled me in on these and half a dozen other issues. I was given a stack of disclosure reports and was told to read them -- a standard practice that I've always advised agents to follow.

This agent knows me pretty well, however, so she knew that I would probably just skim them. One day, she walked into our building, marched into my office, opened the file, pointed to the various reports, and said, ``Did you see this? Did you know the house needs to be tented? Did you know the roof needs this much work?''

She pointed out all the risks. She knew that I had some understanding of the marketplace but was also aware that I wasn't focusing on the disclosures, as I was busy practicing law and wasn't paying much attention to my own affairs.

She handled the transaction by forcing me to read what I needed to read. She also advised me not to purchase some other properties whose defects would cost me more than what the property was worth. This is the kind of agent people should look for, not someone who rushes through the reports and pushes them to buy every property.

Once a buyer finds an honest, hard-working agent who knows what's going on, other problems involving the property's physical condition will usually come up. For those buyers who think they can do it on their own and can save money by not hiring a high-quality agent, I wish you the best of luck.

Unfortunately, many real estate attorneys have a full caseload representing people who get in way over their heads in a purchase transaction.