Residential real estate is a complex, technical business. The difference
between a happy or unpleasant result for the client is often related to
how an agent handled, or mishandled, the details.
Logically, people choose their Realtor based on experience and knowledge.
This is actually more the exception than the rule. A surprisingly large
number of sellers pick an agent who will “find” them a buyer; buyers want
agents who will “find” them a house. This simplistic view of a Realtor’s
function can result in bitter disappointment.
Real estate is a process of relevant steps leading to a closed sale.
A professional is someone who knows and cares about having this happen
in your best interests. Some of these steps include:
Initial interview(s). The purpose of the first meeting(s) is
for your agent to be clear on what you want to accomplish and to explain
how he will help you do it. Additionally, this is the opportunity for both
you and him to decide if you would like to work together.
Bad outcomes are regularly the result of the Realtor’s failure to ask
enough of the right questions and carefully listen to the answers. Buyer’s
may “want” more than their budgets allow; sellers may “need” a higher selling
price than the market is reflecting. An expert hears these discrepancies
and discusses what will and will not work. The initial interview is the
time to openly talk about these matters.
Getting
to work. For buyers, there is financing pre-approval and the
property search; for sellers, it is pre-sale inspections, preparing the
home and then marketing. The best listing agents provide written reports
about the house’s condition. Their flyers are attractive and accurate.
These salespeople know and can communicate about the property and the neighborhood.
Excellent selling (buyer’s) agents educate their buyers about prices,
location and condition, among other aspects. As they walk around the house
with the buyer, they point out items of concern such as standing water
or foundation cracks. These basics differentiate the top real estate practitioners
from the rest.
Contracts.
Real estate purchase contracts cause glazed eyes for many buyers and sellers.
Whichever side of the transaction you are on, you must make sure your agent
is well-versed in writing contracts and comprehending their implications.
As an illustration, a selling agent may advise his buyer to waive a
financing contingency in order to make the offer stronger in competition.
This can be risky if the buyer does not have cash to close the sale in
the event the loan is not approved.
From the buyer’s perspective, he could be liable to the seller for damages
if the sale does not close as scheduled. This is because the seller, relying
on the buyer’s written promise to close on a specific date without a loan,
might have committed the proceeds to another purchase.
These are not small issues, but are frequently skirted over by agents
on both sides. Selling agents may fail to inform their buyers about the
risks of omitting a loan contingency. Conversely, some listing agents allow
their sellers to falsely assume they have a rock-solid contract without
explaining the possible pitfalls.
Presenting
the offer. Over the years I have observed vast differences in
the quality of contract presentations on my listings. Top agents have clean,
neatly prepared contracts and all the necessary paperwork. They provide
a concise oral overview of the buyer and his bid, including a written summary
of the highlights.
In a market where competing offers can be extremely close, the selling
agent who appears capable, and has a handle on the specifics, gives his
buyer a distinct edge. On the other side of the table, the listing agent’s
job is to help the seller assess the various presentations and, most importantly,
to ask probing questions on behalf of the seller.
Escrow
and closing. The escrow period is the time when unattended details
create nasty surprises that may derail the sale. For example, at the eleventh
hour, when all parties have made their plans and are ready to close, I
have seen situations where a previously unknown lien or judgement, e.g.,
failure to pay child support, suddenly stops the closing.
This can create havoc, major upsets and finger pointing. At that juncture,
it is too late to lament you should have had a real estate pro who followed-up
and was on top of things.
Do not assume most agents operate at the highest levels and have all
the particulars under control. As in every industry, there are some very
proficient people and others who are not. Remember that a salesperson’s
pleasant personality is no substitute for an in-depth understanding of
the business. Learn the importance of competence before it costs you money
and anguish.
How
to Interview Agents, Part 1; Part
2, Part 3, Part
4; and Going the Extra Mile
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