I initially obtained my Sales Associate license in NJ in 1996. And like all new agents, I had to become familiar with NAR’s Code of Ethics, which governs all licensed Realtors, nationally. I was, as a new agent, focused on making sure I was treating all people equally and that I was observing agency relationships and disclosures. I always say, it is great to be a NJ licensed Realtor, because NJ also has very stringent guidelines on consumer rights and protections during the course of conducting real estate transactions.
So in about 1997, I was thrilled to list a beautiful, Victorian styled home in Glen Ridge, NJ. At that time, it was a “feather in my cap,” so to speak, because it was a higher priced home than most of my listings and had a fantastic interior and large yard. The home was in the historic district and had been meticulously cared for by the sellers that I was representing. The couple was divorcing, and it was quite amicable. I
dealt with both clients very well.
During my very first public open house, a couple came through, and made an offer that day. It was a full priced offer, with a substantial down payment and they were well approved with a local mortgage lender. The buyers made their first deposit and we entered the home inspection phase of the contract.
I was trained to give 3 names of home inspectors, as a precaution to make sure an inspection is neutral, and unbiased and that the buyers have chosen whom they wish to use for that important transactional task. The buyers selected a home inspection and I was present on that inspection day for the full 3 hours.
On the inspection day, the buyers were also present. The inspection was completed, and a report was issued. One aspect of the report concerned the buyers. The slate roof on the home seemed to be a bit worn. So the buyers requested that I find a person who was qualified to re-inspect the roof for them. Now a few things to mention. The sellers had filled out a sellers property disclosure and nothing unusual
was noted in that report. The other thing to note, is that the transaction timeline was a short one. The buyers wanted to close within a week of that home inspection –so the pressure was on, to resolve this roof issue.
And probably one very important thing to mention –is that I was a disclosed dual agent and I was representing both the buyers and the sellers. This meant I had what you say “more skin in the game,” or more to gain or lose should this transaction either move forward or fall through. From the outside perspective, anyone would know that I would be highly motivated to make sure this sale happened.
So now with this roof concern, and need to have a roof expert inspect it, I was forced to ask the sellers whom they had used over the years to maintain it, and ask them to provide a few names. At the same time, I was researching, by calling other local Realtor professionals and town building offices, who were the slate roof specialists that were professional, licensed and insured to investigate and perhaps repair/replace roofs.
As it turns out, all parties named one man. The man who did all of the small, quaint town of Glen Ridge was a man that was named Ron, and I do forget his last name now. But Ron was known both to the sellers as an expert and to every other person that I called upon for expert advice. The buyers hired Ron, and an inspection was ordered.
On the day of the roof re-inspection, the sellers were not home. The buyers had big jobs in NYC and could not attend during a week day. That was understandable. They asked me to be there and of course I was there as their representative, as well as the sellers’ representative.
I meet Roofer Ron at the home. He says he first has to look at the attic, which thank God, was a walk up attic. While we are standing at the top of the stairs, and he is using a flash light to look around he says the following to me:
“This roof is at the end of it’s life. This slate roof was put on, initially with the wrong nails (either galvanized or ungalvanized I forget at this time), and I can see them rusting through already. I have been telling the sellers’ this for years.”
Ron goes further to tell me that: “to replace the roof with slate would be a $60,000 job and to replace it with asphalt shingle would be $14,000.” Now in the late 1990s, and even today, that is a considerable amount of money. I was shocked at this finding and wondering why the sellers had not mentioned this very important fact on the seller’s disclosure.
So now we leave the inspection and I go back to the real estate office. I am now just 3 days away from the biggest closing in my life. There is only one ethical course of action. I have to notify all parties. I have to notify the principals (both buyers and sellers) and the attorneys or closing agents for all parties.
At that time, faxing was the quickest way to get the written word to clients as fast as possible. I typed up a fax and it read:
“During a re-inspection of the roof located at ____________, that the slate roof is at the end of it’s life. The cost to replace it is $60,000.”
I signed my name to the fax, which disclosed the roof issue, and I sent it out. The sellers’ called me within an hour, screaming at me, and very angry with me. The buyers were silent. I had no idea which way this would work out. But I knew that the ONLY course of action for me to take, as a licensed Realtor, was to fully disclose what was now a known and extremely costly defect in the home.
The next day, the attorney for the buyers contacted me. And the buyers were prepared to move forward and purchase the home. The buyers did not even ask for a credit. I was amazed and very happy. The buyers, who were used to NYC pricing, perceived the value of their new Glen Ridge home as a good one, even with the almost immediate need of a new roof.
I drove in to the closing which was somewhere near to New York city. And at the closing, I am sitting for a while alone with one of the buyers. He turns to me and is smiling. And he says to me, “You never asked where my wife and I work. We work producing the 20/20 news show, and we are in the consumer fraud division.” His smile and words needed no explanation. I knew then and I know now what he was implying to me.
Had I not done the right thing and followed the Golden Rule of Real Estate which is to do “unto others as you would have done to yourself,” I would have been sued, along with the sellers for conspiring to hide a latent defect. Because in all likelihood, any roofer would tell them exactly the condition of the roof, and in the highest likelihood, that roofer would be the man Ron I met with, who was one of the few who even
wanted those historic, slate roofing jobs.
The point I wanted to make in sharing this bad roof disclosure story, is that I tell all Realtors and clients that I work with –to tell the truth. Everyone home will sell. Full disclosure of all known facts, even ones that are not readily observable, has to happen in all transactions. There is no other course of action that would comply with the high ethical standards in our fantastic trade of real estate brokerage.
I have read and re-read the NAR Code of Ethics. One common theme and thread runs through it, and that is to tell the truth in all matters and to “Do Unto Others, As You Would Have Done to You.” The Golden Rule of Life is the foundation and rock of NJ and national real estate brokerage.
The author is Carolyn Mac Evoy, Broker of Mac Evoy Real Estate Co., a 2nd generation real estate firm, started in NJ and continued in Florida. Should you be needing housing or commercial property or farm land in Florida, please contact her at: carolyn@macevoy.org or by calling 772.925.4791.
