Most residential real estate transactions are ultimately successful, meaning they actually ‘close.’ Such a ‘happily ever after’ scenario has sellers receiving their money and buyers, their new house. However, given the many steps along the way, many real estate transactions have a few ‘bumps in the road.’ Sometimes it’s a home inspection defect. At other times it’s a lendability issue, like an appraisal. Or a legal or title issue, such as an unexpected lien like a highway or railroad right of way, or a faulty legal description. Successfully helping home buyers and sellers navigate through these kinds of transaction challenges is a Realtor’s job. Many people are wondering…is the thought of a perfect real estate transaction fact…or fairytale? Find out more, in this helpful Oregon Real Estate Podcast episode by clicking here or on the ‘play’ button below.
A Realtor’s job includes helping clients understand what to expect during each phase of the home buying or home selling process. When that process seems confusing, Realtors are a good ‘reality check’ to help in assessing what’s usual and what’s not. So along with normal questions like “Who pays closing costs?” some may ask a more fundamental question like “What are closing costs,” or “Are closing costs even necessary?”
Worst Case Scenario
Perhaps your world just seemingly came crashing down with a serious transaction surprise. It might have been the discovery of a massive mold infestation, or a leaking underground storage tank. Along with providing real estate expertise, the best Realtors provide more. Sometimes this is in the form of emotional support, or acting as a sounding board as clients work through their options during a transaction.
There are enough real estate factors that take unexpected turns that a substantial majority find it best to have expert guidance through the important process of buying or selling a home. Does this mean every home purchase or sale is necessarily fraught with trouble, or can they be ‘win-win’ where everyone is happy? The answer may depend on several key factors you’re about to learn. Find out more…in this edition of the Oregon Real Estate Podcast!
The ‘Baby’ Analogy
Like having a baby, ‘bumps in the road’ are common in real estate, too. Besides the usual purchase negotiations, once a home sale is inked, there are plenty of other possible issues to quickly put holes in the ‘perfect transaction’ myth. This might include (1) a surprising home inspection report, (2) a problematic appraisal or (3) seemingly endless underwriting requirements, including constant requests for things like pay stubs and tax returns. This is why expecting a completely ‘hiccup free’ transaction isn’t realistic and a bit like an expectation of pregnancy without some temporary discomfort. Yet like childbirth, most agree the results of completing your real estate transaction process are well worth the inconvenience.
Most of us like having a good degree of control in our day-to-day lives. This might mean we get to choose where we have lunch, our chosen brand of mattress, or the brand of tea we drink. So losing such freedom can be a jarring when buying or selling a home. Home buyers and sellers are asked to work out differences with those having their own interests in mind. When real estate challenges come, there are several thoughts to help get you through it.
One helpful viewpoint is the realistic expectation that a home purchase or sale resembles a marathon more than a sprint. So don’t expect it to be completed overnight.
Another constructive perspective is to focus on your ultimate goal. When it comes to real estate, focus wins the day. Also expect some surprises that may be beyond your ability to predict. You don’t buy or sell a house every day, so listen to your Realtor. That said, understand that some circumstances are beyond the scope of even real estate agents, such as interest rate changes.
Yet another help is to keep a ‘big picture’ perspective. If you end up selling your $800,000 home, yet need to spend several hundred dollars for repairs discovered in an inspection, or to meet code requirements, most reasonable people would consider that a ‘win.’ With this in mind, lets consider two of the main factors, whether you’re buying or selling a home. These include the human element and the property element.
The Human Element for Buyers
For buyers, whether you’re purchasing a ‘fixer upper’ or a mansion, on the other side of the negotiation table is a human being. It may be an individual, a married couple, a family, bank, or an estate representative. It may even be a judge. But the bottom line is that some PERSON is ultimately going to make a decision on your offer. This means that there is always the human element at play. While humans frequently make great decisions, sometimes they don’t. So understand that when you don’t get the response you expect, there may be a good reason or a bad reason. The reality is that you don’t always have control over every aspect of the process. Sometimes bolstering your offer with helpful information, such as support to justify your offer using comparable properties can help. At other times, especially if there are other, better offers, it may help very little.
The Human Element for Sellers
The same ‘human element’ dynamic is true when selling a home. Buyers may not see the value that you clearly do, or may not care. One common example is a swimming pool. Some buyers love them and are willing to pay more for homes with a swimming pool. Other buyers are fearful of them, sometimes due to potential legal liability since they can be considered an attractive nuisance. Plus, some buyers might simply prefer a tennis court, instead.
Another ‘human element’ example might include a sibling disagreement within an estate being sold. A buyer’s request in a house offer for the chandelier once belonging to Aunt Bessie might hold sentimental sway among one family member, while the others think it’s garish. Working through such details isn’t always tidy and may require compromise, especially if emotions are involved.
The Property Element
Sometimes the major ‘tipping point’ within a real estate transaction is less about the people involved and more about the property. For example, I once sold a property with a very willing seller and a very willing buyer. But once an environmental inspection revealed considerable soil contamination, the deal wouldn’t close without renegotiation on that factor.
The clean up cost was substantial enough to cause the buyers to walk away, unless the seller hired professionals to remedy the issue. In that kind of situation, it doesn’t much matter if buyer and seller are equally motivated, because an intervening condition has changed what everyone had initially presumed. The buyers thought they had a ‘clean’ property and so did the sellers. Such cases underscore how control is sometimes shared in order to make things work. In the case of the contaminated property, each party moved forward. The seller addressed the problem and the buyers agreed to waive a few other, lesser issues. It was a classic ‘win-win,’ as the sellers would have had to either pay for clean up, or disclose the contamination anyway and the buyers were reasonable with their expectations.
So is the perfect transaction a possibility or pipe dream? For most, the perfect transaction is the one that closes, while moving you forward with your goals. Regardless of the property you may hope to buy or sell, keeping a balanced perspective will take you far in making the right decisions. You can’t change those with whom you’re dealing, but in a majority of cases, buyers and sellers tend to eventually understand that it takes two to tango in the realm of real estate.
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