The Twin Cities housing market is hot again, but sellers beware. While homeowners are opening their doors to potential buyers, those strangers could cause unanticipated damage.
Since the start of the 2013 spring selling season, at least two homeowners in the Twin Cities metro area have had to shell out thousands of dollars to fix damage they say was caused when a potential buyer was looking at their home.
Joel Anderson, of Edina, put his family's home on the market this spring. In April, after three agents showed Anderson's home to three different potential buyers, he returned to check on the house and found water all over the second floor.
Anderson said someone turned on the steam shower in the master bathroom and didn't turn it off, transforming the second floor into a steam bath. There was so much moisture, water was dripping everywhere and seeped into the walls and insulation -- damage that required more than $50,000 in repairs.
"The entire upstairs was almost like you were walking into smoke except it was steam," Anderson recalled Anderson. "I was in shock ... words can't even describe the situation I walked into. I immediately turned off the steam shower, opened up all the windows, all the doors and then began the process of restoration."
In the last three years the state Department of Commerce, which regulates the real estate industry, has received an average of 328 complaints each year on real estate agents, brokers or real estate transactions, department spokeswoman Anne O'Connor said.
Some of those complaints are about bad agents, bad brokers and damage caused to sellers' homes.
The Minnesota Association of Realtors is aware of the potential for problems and tracks the issue more informally.
According to the Multiple Listing Service, which tracks most homes on the market and provides information about listings to potential buyers, approximately 15,000 houses were up for sale in the seven-county metro area during the first week of August.
When it comes to selling a house, homeowners don't have much of a choice. They must invite people inside to lure potential buyers.
Anderson said the steam shower in his house likely ran for four days and as only real estate agents and would-be buyers, were there, he is certain it happened during a showing. To repair the damage, workers had to gut the entire second floor, requiring Anderson to take his home off the market from April to July -- prime selling season.
Although much of the cost will be covered by his homeowners' insurance, Anderson said after paying his insurance deductible and accounting for depreciation his out of pocket cost for the remodel is about $13,000.
"It's a lot of money and it's a lot of time," he said of the experience, which became an unplanned remodeling project. "It's a lot frustration and it's a lot of time missed not being on the market."
Anderson hopes his story can be a lesson for other sellers. His family no longer lived in the house when it went on the market, so he wasn't there every day to check on the property.
HOMEOWNERS: BE VIGILANT
Real estate industry experts say checking on the home after every showing is critical.
A homeowner in Plymouth, Minn., was left with a flooded basement after someone took the cover off the sump pump during a final inspection.
That homeowner was able to settle on the cost of damage with both the listing and buying agents.
It's not uncommon for valuable items to be stolen during showings or open houses. Online message boards are full of such tales.
The Minnesota Department of Commerce has revoked the licenses of at least two real estate agents in five years for stealing items from the homes they showed or engaging in improper behavior.
In July, 2008, the department revoked the license of Charles Lindley, of Minnetonka, Minn., after reviewing allegations he fabricated a showing to steal Vicodin from a client's home.
In August, 2012, the department revoked the license of Steven Curtis Skar, of St. Louis Park, Minn., when he gained access to a listed property and "engaged in non-real estate activities for over four hours" without permission. In a subsequent lawsuit, the homeowners accused Skar of using their home for unauthorized "sexual escapades."
"Most real estate agents are good agents, they do a terrific job, give great value to their clients but we do see a fair number of cases here where something has gone bad," Minnesota Commerce Commissioner Michael Rothman said. "When you own a home and you are selling it, you ask your agent to be responsible and that agent is responsible for your property. I'm handing it over to you. You're responsible for that property."
SELLERS CAN PROTECT THEMSELVES
If someone causes damage in a home during a showing or open house, the most difficult task is figuring out who who is responsible.
Hi-tech lock boxes can keep track of who enters the home and when, by creating an electronic signature.
"It's a valuable thing to have to know who's in the property at what time," said Tim Hyde, a realtor who has been selling houses through Coldwell Banker Burnet for more than a decade. "I think it's very important to follow up on showings, to know if the buyer is actually in the home."
Hyde also said agents must watch potential buyers closely, during a showing or while hosting an open house in a home that the seller has entrusted to the agent.
"You just have to treat it like it's your own home," said Hyde.
For homeowners, allowing strangers inside is always a risk.
"The reality is everybody's exposed at all times," said Twin Cities attorney Brad Boyd, a real estate experts. When homeowners allow a visitor inside their house for a showing or open house, that person is essentially a guest and the homeowner, to some extent, has assumed a level of risk by inviting the guest in.
However, when something goes wrong during a visit, potential buyers and agents also have some responsibility, he said.
"You knock over a vase by accident, you tell them about it," Boyd said. "I think being cautious and pro-active can go a long way in these circumstances. I think every time there is a showing, somebody should be following up, whether it's the seller or the listing agent."
Although cases of extreme damage or theft are rare, when they occur homeowners should contact their agent and insurance company, Boyd said. If they can identify the culprit, they may be able to file a lawsuit or settle out of court.
Anyone who suspects theft or vandalism should call police.
"When somebody comes into your home, the presumption is they're going to be responsible," Boyd said. "They're going to look at your home just within the scope they've been granted access."
In Anderson's case, he did not determine who turned on the steam and no one came forward.
Still, he's looking on the bright side. With a complete remodel, his house will be even better for its second round on the market.
"It'll be even better than before," Anderson said of his home. "You're going to have brand-new insulation instead of 1950s insulation, all new walls,"
But he has a warning for other sellers about open houses:
"Treat it as a home full of strangers," he said. "Anything can happen."
This story was produced in collaboration with KARE 11. Watch the story on KARE11.com