Expert Realtor Guides Difficult Real Estate Transaction to Closing

At Gary Lanham Group at Coldwell Banker Fort Lauderdale Beach Office, we’re proud of our reputation for handling South Florida’s most complex and difficult real estate transactions. Whether existing or new home construction, we know the challenges real estate transactions can present. Usually those have to do with details related to negotiations, life transitions or changes in familial ownership, and other challenging deals. So we’re always seeking to deliver client satisfaction with complex transactions.

Sometimes the most complex transactions, however, have nothing to do with the deal itself and everything to do with the property. That’s when the real estate agents’ knowledge of construction, engineering, and the effects of South Florida’s environment on physical property can play an important role in arriving at a successful closing.

No tale better exemplifies this than when a seller’s home was found to have cracks in the walls that are indicative of settlement of the foundation upon which the home was built. To many buyers and other Realtors, this could have irreparably harmed – even scuttled – the sale. Yet, with the guidance of our real estate team and our network of trade professionals, we were able to identify and remedy the problem, and see the transaction through to closing.

‘Ideal’ Home With Tell-Tale Cracks

Here’s what happened… Our client had listed his Wilton Manors, Florida, home for sale. It was a beautiful residence: 2,700 square feet under air and a prime location on the water with access to the Intracoastal Waterway. It had a new roof and solid bones. For the right buyer, this was the ideal South Florida residence.

Yet, long before ever listing the home, the owner had noticed minor “stair-stepping” cracks in the concrete block walls. Those are the tell-tale signs of a foundation that’s undergoing – or has already undergone – some settlement.

This is not that unusual. Most South Florida homes are built on soft ground, often in former swamps or marshy areas that were filled with sand dredged from rock pits that later became suburban lakes in order to create developable land.

Though this sand is packed hard for road, home, commercial, and other construction, some settlement later occurs. It’s an accepted fact of developing in South Florida.

The home’s owner noticed the original wall cracks in 2006. He hired one of South Florida’s premier engineering companies to survey the home and determine the cause. The firm discovered the foundation was, in fact, settling. The owner hired a contractor and pulled the necessary permitting to resolve the issue.

Cracks Reemerge, Threatening Deals

Fast forward more than a decade. The home’s owner had died and a certified public account was overseeing the estate sale. Again, settlement cracks appeared. This is not uncommon; while settlement rarely causes significant home damage, it’s unsightly – and unnerving to home owners and prospective buyers.

The CPA could have re-plastered over the cracks and painted the walls. However, as a licensed professional and trusted counsel to clients, the CPA knew “full disclosure” was the right path, even if he wasn’t legally obligated to make such a disclosure.

Foundational settlement was only one issue facing this home’s sale. The deceased owner was a heavy smoker; discoloration and the odor of stale cigarettes permeated the residence and its contents. The interior of the home was in shambles.

Add in the uncertainty of whether those stair-step wall cracks meant the home was actively settling or sinking, and it’s little wonder the home had been under contract four times. And four times the contract fell through.

As part of the estate sale process, the CPA had the home appraised as of the date of the owner’s passing. He also ordered a full appraisal of its contents as part of the estate’s overall liquidation. Though the state of the home’s interior was unsightly and off-putting, its waterfront location returned an appraisal of around $500,000.

Our team, the owner, and any smart buyer knew with a little clean-up and attention to the settlement issues, the home would sell for much higher – and become a prize South Florida residence.

Yet, there were those cracks…  When the eventual buyers came in for the first showing, they saw the cracks and grew nervous. The new prospects were experienced real estate investors hoping to clean up and “flip” the home for a rapid appreciation and increase on their investment – without doing much more than cosmetic work. This is not uncommon in South Florida’s valuable real estate market. From commercial properties to luxury homes to waterfront condominiums, “flippers” are frequent buyers. Moreover, many of those who buy these homes are pleased to get homes in ideal, “move-in” condition. It’s a win-win transaction.

But, the flippers couldn’t get past those cracks.

Unwavering Professional Standards

At Gary Lanham Group, like the CPA, we’re professionals who adhere to standards that often exceed those demanded in our state licenses. The previous contracts had fallen through, in part, because we and the seller had disclosed the cracks. So when the flippers learned of the cracks, the CPA asked our team, “What do we do next?”

I suggested we hire another engineering firm to inspect and evaluate the residence; if the engineer found the cracks to be old and the home had no active settlement, he would certify that the structure had no significant issues with foundation.

We hired a new engineer who, in fact, evaluated the property and certified that the settlement was normal and did not indicated any problems with the foundation.

Satisfied with the engineering firm’s certification, the investor buyers closed on the home and the CPA was able to complete the estate sale for the owner’s heirs.

Lessons Learned from Full Disclosure

Several points were essential to the success of this transaction.

First was the realization that South Florida homes settle. Whether former swamp or marsh lands, or other un-level grounds, raw land here needs to be filled to be developed. Homes sink, but newcomers might not realize that.

Second was our commitment to honesty and full disclosure. It was important to represent the reality of this situation. We could only do this by encouraging the seller to hire an engineer to perform another assessment. When the engineer discovered there was, in fact, settlement, but it was not a “problem” per se, seller and buyer were able to work together to negotiate a solution.

Finally, as with any real estate transaction, it’s always caveat emptor, or “let the buyer beware.” Real estate contracts have language written to protect buyers and sellers alike. Buyers are supposed to disclose known issues or existing code violations. But unanticipated situations can cause problems. Most – but not all – buyers might ask what the schools are like, where there are new developments, roadway widenings, “eminent domain” issues, or even lawsuits against the homeowner’s association, for example, that could affect the street, the neighborhood, ingress / egress, or the new owner’s liability as a homeowner or member of an association.

Caveat emptor is the principle or concept that the buyer alone in any transaction – retail, a car, a home or other real property – is responsible for checking the quality, condition, or suitability of any goods or products before a purchase is made. With the Internet, such research is generally easy. Even when researching a home you’re interest in, the Internet can reveal the school boundaries, individual schools’ performance, zoning issues or changes, even plans for road widenings or changes that could affect travel to, from, or around your community.

Any professional knows the reality of a concept like caveat emptor. But a reputable professional works hand in hand with their client to navigate blind spots or possible issues. By working with a seasoned and trusted real estate team, we outline the issues and the situation becomes “buyer beware with full disclosure.” This way, each party understands their responsibility and expectations under the real estate transaction, and no one can say, “We were blindsided.”

Working with a ‘Team of Professionals’ Approach

It also helped in this particular transaction that the seller – the state-licensed CPA – also felt an ethical responsibility toward full disclosure. He was not legally obligated to disclose the settlement cracks, or hire an engineering firm, or even disclosed that a firm had certified the home’s condition more than a decade ago. But he did. That’s the type of client a firm like Gary Lanham Group seeks out and prefers to work with.

For reasons of the foundation settlement and other issues, this sale was not an easy transaction. We were constantly providing updated information to potential buyers to make sure we – as the selling agent – were upholding a fully transparent transaction. Our goal: to ensure no one felt they were getting a bad deal.

Throughout Broward County, from Pompano Beach to Coral Ridge,  Imperial Point to Las Olas, Oakland Park to Wilton Manors and north to Boca Falls and south to Miami, South Florida real estate can be wrought with complex transactions. That what the team at Gary Lanham Group at Coldwell Banker Fort Lauderdale Beach Office seeks to deliver with every transaction: A focus on a successful outcome.

If you want the help of an ethical real estate professional for your next complex real estate transaction, give us a call.

Gary Lanham Group at Coldwell Banker Fort Lauderdale Beach Office is a boutique real estate organization offering sales, leasing, and brokerage services to the Greater Fort Lauderdale area. A listings agent matches home sellers with buyers and tenants with landlords. While Broward County is our universe, we focus on Coral Ridge Country Club, Oakland Park, Wilton Manors, Pompano Beach, and the surrounding areas. Call us today at (954) 695-6518 or visit www.GaryLanhamGroup.com.