Avoiding Real Estate Turbulence
When buying or selling a home almost every real estate transaction encounters bumps. Sometimes its lenders or escrow or title. Sometimes buyer’s start having second thoughts. Sometimes seller’s change their mind after going to contract or they get better offers in the middle of good faith negotiations. Sometimes its nice just to have an attorney on your team who can answer the inevitable questions that come up during the transaction. We are dealing with 100s of thousands of dollars or millions, why not have a second pair of experience eyes.
One Real Estate coach I know developed this list of 88 types of Turbulence in an real estate transaction. This list is designed to show buyers and sellers why they should consider working with a an experienced real estate agent. I see as proof you should have a lawyer on your team when selling or buying real estate, especially if you can put the lawyer on your team at no extra cost to you. If you contact me before you contact the Realtor, I can either refer your purchase or sale to the Realtor of your choice or I can help interview Realtors and help you choose the best one for your needs. In my experience over 99% of Realtors don’t mind paying reasonable referral fees.
As a consultant.
Having an experienced Attorney/Broker on your team can help you in myraid ways. Not only can a attorney help you through the turbulence that many transactions experience, but hiring an attorney as a consultant can help you put in place a great game plan.
- Before you sell your home or yourself or contact a Realtor to list your property for sale, you should go over the disclosures you are required to make by California real estate disclosure laws. Almost every seller has disclosure questions. Many of the question homeowners should only be answered by a person licensed to give their opinion about disclosure laws. In my experience most homeowners make a take a binary approach to answering the disclosure questions. (probably due to Realtor advice). We see far too much information being given (causing potential undue concern in buyers) or far too little (creating doubt in buyers and potential for liability for years after the sale).
- As a consultant I like to go over a homeowners goals and then help they design a set of question for each Realtor they will interview.
- As a consultant I can help you pick the best Realtor for you and I can help ensure your Realtor reaches your goal whether it be top dollar, the least hassle, the shortest amount of time or other more personal goals.
One Real Estate coach developed this list of 88 types of Turbulence in an real estate transaction. This list was a list designed to show buyers and sellers why they should consider working with a real estate agent. This list in part shows the many reasons why you should consider having an attorney on your team. Especially if you can do it at no cost to you. If you contact me before you contact the Realtor of your choice, I can refer your purchase or sale to them for a referral fee. 99% of Realtors or more don’t mind paying referral fees.
- You have orally agreed to a counter offer and both sides are waiting for final signatures when you receive an offer for $22,000 dollars more. After you inform the buyer agent the agent says that you had a deal and threatens to bring legal action. What do you do as you can’t sell the same house twice and you really don’t want legal action holding up your move.
- Multiple offers. You receive multiple offers yet your agent some how never gets the deals closed. You think your agent may not communicate properly. When you exercise your right to cancel the offer at any time… your agent’s broker states that your agreement had to be in writing.
- You have gone to contract on a new home. You are to receive the proceeds for the sale on your home on Friday and close on your new home on Tuesday. Yet, a few days before the close of your home the buyer’s lender starts sending over odd closing conditions… sort of designed to make it look like you are blowing up the deal. When it time to close the buyer’s lender says that it will need more time. Buyer asks to move on Friday anyway and says they will pay rent. What do you do. If you let them move in, the pressure will be off their lender and they might not fund for days or weeks or ever. If you don’t close on time you might be out a deposit but worse… you might not have anywhere to live. People are getting very emotional.
Sellers Before your Sign a listing Agreement.
- Have a good idea about price and trends.
- Avoid leaving a lot of money on the table.
- Ask you listing agent if proper pricing is so important why don’t I just use your price and then pay an attorney to do the rest?
- If you desire to sell for a price above the current market value, know how to market to the motivated buyer pool and know how to hold the buyers in the transaction.
- Speak with multiple Realtors and review the price and marketing plan. Ask if they how many times they have negotiated multiple offers and hear their strategy.
- Before you sign the California Residential Listing Agreement (RLA) ask for 24 hours to review it. Don’t sign it immediately, ever.
- Make sure the Realtor or you write in that Seller may cancel at anytime.
- Know the different types of listing Arrangements a head of time. One day, One person, different types of agency.
- Local Marketing
- Social Media
- Traditional Marketing
- Your listing Syndication (with or without the MLS)
- Realtor Marketing (with or without the MLS)
Negotiating with buyers.
- Many experienced buyers are shell shocked by the prices and the competition. One make sure your Realtor communicates clearly with the buyers Realtors about how long you will be reviewing the offer.
- Counter offers are a bit of an art. Make sure your Realtor is very experienced. Its not just about the numbers its about your representation.
- Multiple offers are very tricky for most agents. Most agents handle them in a sub optimal manner. See our Selling in a Sellers Market videos.
- Integrity and Information can hold buyers in deals as you make counter offers.
During the Transaction
- Disclosures – I get so many question about disclosures. IMO sellers should consult with an attorney on these questions far more often.
- Contingencies. The Califrornia Real Esate Purchase Agreement (RPA) is designed to provide many outs for buyers. Realtors are not allowed to make changes to these agreements. In Sellers markets, sellers should speak to an attorney about make written changes to the standard forms. Also in my opinion, many Realtors close these contingencies improperly.
- Inspections, repair requests, walkthroughs. In my experience the higher in the range you price your property the more trouble you should expect from buyers here. However, I have set up a marketing strategy that gets around this issue when you are selling for top dollar.
Less than half the time but quite frequently issues come up with title or escrow. I can’t tell you how many times I have had to ask title or escrow to speak with their attorney. I have found that speaking attorney to attorney can do amazing things. Now, if you use a title company I have worked with, I don’t usually have problems with them at all. We know each others routines. But, when my clients allow the other side to pick title or escrow… sometimes issues arise. See the video above…