Jim Valentine on Real Estate
Real estate relies heavily on communication. Negotiations are all about language and the ensuing contracts are all about the verbiage contained therein. It is important to say what you mean and mean what you say and… that it be true.
If you compromise on the latter, you might find yourself compromised in later interaction. A good example is our recent experience of an agent representing that the seller needed $5,000 more than what was offered because the numbers were too tight for her to do what she needed to do.
We believed that and the $5,000 adjustment was made. We rolled into escrow and had inspections completed. Many items were found to be deficient, but the most impactive was the roof having but 2-3 years of remaining life.
The normal protocol in such a situation is to alert the seller/seller agent and see what they want to do. Most of the time we work a negotiation where both parties pay a portion of the replacement cost.
The seller because they didn’t do it before and the buyer because they will have years of benefit from the new roof. Whatever agreement we might have reached in this case, assuming seller paying 50% or more, it was more than their self-designated threshold of $5,000. As such, we signed cancellation instructions.
The listing agent responded with a declaration that she always works to resolve matters than cancel. We, too, do that as a practice, but when you tell me of your budget constraints and the resolution is greater than that amount it is difficult to give much credence into the likelihood that a compromise will be reached.
Further, if one was reached, what changed in her finances? The agent’s position at the beginning of the negotiations led to the ultimate cancellation of the transaction. Did the seller have more financial room? We’ll never know.
Another time an agent advised us strongly that his buyer was maxed, had no more room to negotiate. We were a few thousand apart and our seller capitulated verbally. Before things were signed a full price offer arrived which the seller accepted.
The “capped out” buyers then went down the street and paid $50,000 more for another home the following week! Truth in negotiations at its finest. Granted, it may have been the buyer that was guarding her hand not the agent, but either way, a false gambit entered the process.
If you take a hard line in negotiation and something changes, let the other party know. The change may work to their benefit such that you can use it for your mutual benefit with a little cooperation.
It might be moving day, hours available for inspection, keeping the tractor but your uncle suddenly doesn’t need it, etc. There are a lot of variables in a real estate transaction, kind of like a three-dimensional puzzle. Many have a direct impact on others when they change.
Keep your eyes on the whole picture at all times through the fluid process known as escrow. Communicate with your agent at all times to understand what has happened, what is happening and what will happen, and the consequences of each happening.
We still like to trust people, but you must always test the threshold of their honesty when you can. Are they gaming you or are they serious when asking you to help them by your concession(s). Confidence and trust go a long way in a real estate transaction.
Everyone has their position in a real estate transaction, but all are focused on the same goal, the close of escrow. Unless you are in the predatory real estate investment business, work to satisfy everyone as best you can and have a healthy escrow process.
You will be happier in the long run than playing “gotcha” real estate. When you play the “gotcha” game the advantage can flip suddenly, and you will be the victim of your prior moves.
Trust is to be guarded and treasured. Tell an attorney to trust and watch their reaction. The breaking of trust is what fuels many of their practices. A famous man once said, “Trust but verify.” Wise words.
When it comes to choosing professionals to assist you with your Real Estate needs… Experience is Priceless! Jim Valentine, License BS.03481, RE/MAX Gold Carson Valley, 775-781-3704. dpwtigers@hotmail.com.