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Realities of Real Estate: Smiling all the way to settlement

The process of buying or selling a house has become much more challenging.

The banks have clamped down on lending qualifications, making it more difficult for buyers to obtain a loan and equally problematic for sellers hoping to get an appraisal that will allow the deal to go through. As a result, all parties involved (agents, buyers and sellers) feel the pressure of what sometimes seems like an arduous journey.

There can be a lot of finger-pointing as everyone struggles to find the finish line. Real estate, like buying or selling anything, is somewhat of a naturally adversarial activity. Buyers want to buy low; sellers want to sell high and real estate agents need to make a living, so they don’t want to spend years getting the job done.

But, with a sense of fairness, good humor and cooperation in a common goal, the process doesn’t need to be painful. Here are 10 ways to help make sure everyone walks away with a smile.

-Communicate: Undoubtedly, most of the problems with a real estate transaction stem from a lack of communication.

Real estate agents are probably most to blame for this issue. As the conduit of information exchange between buyers and sellers, they bear the greatest responsibility for the flow of information necessary to keep everyone in the loop.

Nevertheless, agents can’t be held accountable for something they don’t know. So, if you’re a buyer or seller, be frank with your agent about concerns or questions. Don’t let it fester until a point of resentment.

Agents have many clients, and until you speak up, they might not realize something is wrong. Put a bug in their ear, and the best of them will quickly respond to get everything back on track.

-Be patient: We live in a world where communication is instantaneous. With a cell phone in every pocket, there is an expectation that all issues should be responded to, or resolved, with the same speed that they were realized.

However, thoughtful and reasoned decisions aren’t instantaneously made by a computer; human beings are part of the mix. Buying or selling a house is a big decision. Folks like to “mull it over.” So, give people some breathing room. If you clamp down on them, the usual answer is “no.”

-See the other side: The key to any successful negotiation is in understanding the other side’s point of view.

In real estate, we frequently find a myopic desire to “vanquish your opponent,” and it almost always gets in the way of accommodating reasonable resolution.

Frequently, there can be confusion about what’s really important. A buyer might think the seller’s holding out for top dollar, when in fact, the seller’s primary goal could be a quick settlement. Although each side will hold their cards close to the vest, use your agent to probe for a deal that will produce benefits for everyone involved.

-Allow for mistakes: There isn’t a one of us who haven’t blown it from time to time.

With a real estate transaction, there are a million places where someone can fail to tie it all up in a nice, perfect bow. It could be the seller, buyer or one of the agents. So long as it’s not a nefarious attempt to deceive, chalk it up to system failure.

If the problem gets fixed, and the aggrieving party recognizes responsibility, that’s just part of an imperfect world. Don’t make legitimate human mistakes a deal killer.

-Don’t imagine things: When you’re buying or selling a house, it’s important to deal with the facts, and not let your imagination get the best of you.

We realize that this is the largest financial exchange most people will ever undertake, and most of us only buy or sell a home a few times in our lives. As a result, it’s easy to be concerned about issues that might not be legitimate concerns.

You should never be afraid to ask questions. Agents can get a bit too comfortable with a process they do all the time. Sometimes they forget how their clients are in the midst of a big dollar change of life, uncertain and unclear as to how it will unfold. Put your mind at ease and ask about anything that’s troubling you. In most cases, it will be much to do about nothing.

-Follow the contract: With every home sale, there is a contract of sale.

Many years ago, it was little more than a single page that says what’s being sold, and for how much. Millions of lawyers later, the residential contract is now 50 or 60 pages.

Not to disparage lawyers, their goal is to make sure precious little is left to individual interpretation. Consequently, this helps minimize potential disputes.

So, when you don’t know what to do, first check back with the contract. In most cases, it will be crystal clear. And, when you sign a contract, also be crystal clear about what it says. All those lawyers will hold you to it.

-Don’t get greedy: We all want to make a great buy, but in the context of a 30-year mortgage, a few thousand dollars one way or the other, won’t make a discernible difference in most people’s lives. With today’s low interest rates, another $10,000, on a $400,000 house, amounts to an additional $50 per month in mortgage payments. Is the home of your dreams worth what you might spend each year at Starbucks for a double espresso?

The same restraint holds true for home inspections. Many buyers look at home inspections as a second bite at the apple on the purchase price. The home inspection addendum specifically limits what is fair game for repairs. In that part of the negotiation, we’ve always found that if buyers are reasonable, and ask for less, they usually get more.

-Keep your eye on the ball: After a bit of time, and perhaps with some discouragement, both buyers and sellers might start to question why they even began the process. It can all quickly become too much trouble, or too much work.

Well, nothing of great gain was ever achieved without great effort. A new house and a new life will almost always ultimately supersede the momentary discomfort associated with making a move. Don’t let your final destination be uprooted by a few rocks in the road.

-Have some fun: Of all the things we do in life, finding a place to live is one of our most exciting endeavors. What will the house be like; where will it be; who will be my new friends; how will I make this place my own? These are all things that you will remember forever.

It doesn’t matter if this is your first house, or your last. Enjoy the exhilaration of a change. For most of us, it only comes a few times in our lives; make it a great time!

-Remember you’re buying a “home:” Unless you’re an investor, the house you have your eye on is what you’ll ultimately call home. It isn’t a 401(k), a stock certificate or a box of gold, squirreled away under the bed. It’s where you’ll plant some flowers, maybe a tree, and call the family over for Thanksgiving.

During the housing boom, too many lost sight of what a home really means. It became some sort of financial instrument, and not the place where you take a picture of your daughter in front of the fireplace, just before she jets off to the prom. Thankfully, we’re getting back to the idea of a house as a home, rather than a piggy bank for things we might not otherwise afford.

So, no matter if you’re buying or selling, we’re all moving on to a more hopeful place. It could be a bigger house, or a smaller one. Regardless, with the proper attitude and these few simple steps, it can be a change that you’ll always cherish.

Bob and Donna McWilliams are practicing real estate agents in Maryland with more than 25 years of combined experience. Their email address is McWilliams@BobDonna.com.

 

3 comments

  1. Great article. Thanks a lot. I especially liked it when you said Buyers want to buy low; sellers want to sell high and real estate agents need to make a living, so they don’t want to spend years getting the job done. I could not agree more.

  2. S Simenowitz, Esq.

    Spot on – as a 30 year RE attorney, you have said it all – the parties have to appreciate the difference between the process being arms length and adversarial – settlement should be fun – a bottle of wine in the fridge with a note saying something like \I hope you’ll be as happy here as we were\ – makes a world of difference!

  3. It is good to remind people in the Baltimore market that the massive foreclosure fraud brought with it an equally massive titling debacle. With MERS here in Maryland, the size and scope of the titling fraud directed against subprime loan homeowners has left behind a virtual toxic chemical cleanup in house titling issues. We know that with MERS passing these titles through multiple hands with no clear record of who owned the homes and when they owned them, we will see many cases of homeowners having their title challenged in the future. These legal fees are easy for the developer who buys large tracks of these foreclosures, but for the average family these lawsuits will be a burden.

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