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Monday, November 5, 2012

Real Estate Ethics - Lease Option Transaction

10:33 AM
Buyer Beware!

I just had a client back out of a lease purchase transaction, because the seller - a real estate investor - had failed to pull any permits on the remodel of the house. My client is a builder and general contractor. He spoke with the City to find out about the permits. Without permits, any buyer would not be protected by insurance for a house fire or other problems covered by non-permitted work.

When I shared this information with the listing broker - who happens to be a Managing Broker/Owner (meaning he has the authority to hire and supervise other real estate brokers) - he actually had the audacity to inform me that any buyer who wants to know details (eg. get an inspection) of a house they are optioning to buy is not a good candidate for a lease-option!!! He typically works with buyers who have no professional representation.

I agreed that knowing whether permits have been pulled on a house one is renting or buying is a material fact that might influence a tenant/buyer's decision to rent or buy.

I told him that this spoke VOLUMES about his business model, and that, thank you very much, this is NOT the way I do business.

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