Last week, we had a business trip that took us to Minneapolis, along with a subsequent side trip to visit our parents in Wisconsin. Thinking that hurricane season was pretty much over, we didn’t give much thought to buttoning up our waterfront home in West River. But then, Hurricane Joaquin popped up in the Atlantic.
By the time our business meetings were over, Joaquin had spun up to become a serious Cat 4 storm, and our house was pretty much in the bullseye of its predicted path. Six tracking models had the storm coming up the Chesapeake, and only one had it heading harmlessly out to sea. So, we went with the majority of weather wisdom and coughed up $400 to change our airline tickets, fly back early and protect our piece of paradise on the West River.
Well, within hours of changing those tickets, the weather wizards all suddenly agreed that Joaquin would indeed head out to sea, and the Chesapeake Bay region would once again dodge the bullet of a major storm.
It just goes to show that no matter how carefully you plan and no matter how thoroughly you do your due diligence, life has a way of turning out differently from what you expected. If we had stayed in Wisconsin, Joaquin might have blown right up the bay. But it didn’t. All you can do is make the best decision you can with the information you have at the time. Sometimes it will all unfold as predicted, and sometimes it won’t. The same is true with a real estate transaction. In most cases, the process from contract to settlement is fairly smooth. However, since there are human beings involved, there can be some snags along the way. The key is knowing how to handle unexpected obstacles and not let them derail the ultimate objective, which is to get the deal done. Here are some tips on how to survive a difficult real estate transaction.
– Follow the Contract: At some point along the way to settlement, buyers and sellers frequently find themselves in some sort of disagreement; it’s usually over a home inspection issue. The buyer feels that the seller should make some sort of repair, and the seller thinks that the buyer is making a mountain out of a mole hill. Or, it could be any one of 100 other things that can come up in the complexity of a real estate transaction. Regardless of what it is, step one is to go back and see exactly what it says in the contract. Home sale contracts are excruciatingly long and detailed. But, they’re made that way to help address disputes that might arise between the buyer and seller. Plus, these contracts have been lawyered to death. So, don’t try to outsmart them for the convenience of reaching a self-serving conclusion. In a residential contract of sale, the very first sentence is, “This is a Legally Binding Contract; If Not Understood, Seek Competent Legal Advice”. That sentence is there to remind people that contracts are not a set of guidelines or suggestions. Once you sign them, you are legally bound to perform and execute the contract as written. As a result, make sure you (and your agent) fully understand what the contract obligates you to do, because if a problem comes up, what it says in the contract is what will most likely direct the outcome.
– Listen to the Experts: These days, and with the aid of the Internet, people tend to think that just about anything can be turned into a do-it-yourself kind of project. Unfortunately, most folks don’t know what they don’t know, and what looks simple on the surface can be loaded with about a thousand ways to get yourself into big trouble. Especially when it comes a home sale, where hundreds of thousands of dollars are on the line, it’s advisable to heed the advice of someone who actually knows what they’re doing.
– The current contract of sale can easily run 50 or 60 pages. It gets a little bit longer every year, and even for real estate professionals understanding exactly what it says and how it is to be executed can be difficult. Consequently, if a real estate agent or a lawyer gives you some advice about how to proceed in a transaction, it’s important to first, fully understand that advice and second try not to ignore it without good cause. Ayn Rand, the author and philosopher once said, “You can ignore reality, but you can’t ignore the consequences of ignoring reality.” It’s a quote that we occasionally see played out in a real estate transaction. And sadly, the consequences associated with letting things go south on a home sale can be significant. So, when it comes to buying or selling a house, listen to the experts. They’ll know the best way to navigate the unexpected surprises that come up on the way to settlement. Most of the time, agents have experienced the problem many times before, so they’ll be well versed on the best way to fix it and get everything back on track. As we have written in previous columns, the settlement and mortgage disclosure process is currently undergoing a substantial change. The Consumer Financial Protection Bureau (CFPB) has just implemented the Tila-Respa Integrated Disclosure (TRID). Many real estate consumers might not notice the implementation of this new and far-reaching regulation, but it’s going to upset the apple cart for a while in how lenders and title companies go about doing their business. This makes it especially important to follow the advice of the experts when buying or selling. Furthermore, make sure your lender, title company and agent are fully up to speed on TRID. If they aren’t, you’d be well served to find someone who is.
– Keep your sense of humor: Whenever we get through a difficult dispute between buyers and sellers, Donna can usually be heard to say, “Well, no one died.” She doesn’t mean to minimize the issue, but rather Donna is pointing out that life’s problems usually aren’t as devastating as we often make them out to be. Keeping things in perspective, along with a generous dose of good humor can go a long way toward helping resolve the bumps in the road that invariably come along. So, no matter what happens, or how much someone ticks you off, keep smiling and keep your eye on the prize. It might not seem all that funny at the time, but we guarantee that you’ll look back and grin at some of the stupid stuff that went on the last time you bought or sold a house. Just chalk it up to how interesting humans are. If both sides of a transaction (as well as the agents) keep a sense of humor, and make every effort to help move the ball forward, it’ll all work out and you’ll survive even the most difficult settlement.