Real Estate Round-Up: Q is for question(s)
Last updated 7/2/2021 at 12:32pm
Imagine doing something for the first time, every 5 to 20 years? You would feel like you’d never done that activity ever before. That is what home sellers and buyers experience every time they participate in a real estate transaction. Unless you are an active investor, or you are working with an experienced Realtor, the process of buying or selling feels like you are walking through a maze, with mirrors, trap doors, and dead ends.
Even if you have bought or sold within the past two years, so much has changed, the process will feel brand new. We have periodic contact with inexperienced Realtors, who may hold a license, but aren’t much better equipped to help their clients than the client helping themself. Things are constantly changing in the real estate transaction. Two months ago, we had a Home Hardening Advisory, but now we have a Home Fire Hardening Disclosure and Advisory. Two years ago, we had neither. It’s no wonder sellers and buyers have questions.
The key here is, don’t be afraid to ask questions. Not asking is a sure-fire way to end up with confusion or problems down the road. Some clients are great at asking questions. The first question receives its answer which generally prompts many additional questions and answers until the original question and answer is completely flushed out. Other clients don’t ask questions, and then at one point in the transaction, suddenly realize they don’t know what they’ve signed and don’t know how they ended up where they are.
DocuSign is a great convenience, but it can make the asking questions part not a normal part of the transaction. We always send over all documents first via email, with a thorough explanation, to the client. We always ask them to read over the documents and to contact us with their questions. Later that day or the next day, we DocuSign the same document to them for their acknowledgement. With that DocuSign, we also remind them to review the document and to contact us with questions, prior to signing. I can’t tell you how many times I get the document back almost as quickly as it took me to create it, which means the client did not review it; they didn’t direct any questions to me, and they probably don’t understand what they signed.
If you are a seller, please ask how the listing process works. How will you be contacted for showings? Who will show your home? Will all offers be presented to you? And once an offer is received, how soon will your Realtor present it to
you? What options do you have when you receive an offer or multiple offers, and how do you respond to those offers? What are the Sellers’ disclosures and what should you disclose? What repairs will you need to do to sell your home? When should you start packing? When do you have to vacate your home?
The most common question we get from sellers is asking if they should disclose something they know about their property. The answer to that question is always yes. Sellers often want to know what they must repair. That depends on the request. Sellers want to know when they will get their equity from the sale of their home. The answer is generally the day after the property transfer and recordation has occurred. Sellers should understand not only their options but the why’s of their options.
It grieves me when it seems that a seller has not been fully informed of their choices and is not participating with the process. Realtors are here to guide, educate, and inform, so the seller can make the best decision for themselves.
Recently, we submitted an offer for buyers we represented. The offer was $100,000 above the list price. The buyers didn’t even get a counteroffer. When I pressed the listing Realtor for the sellers to acknowledge that the offer had been presented and that they rejected the offer, the listing agent never got back to me.
When that property closed escrow, it closed for $150,000 less than our buyer’s offer. Do you think that seller ever saw that offer? I don’t. Sellers must ask questions and stay involved in the transaction.
How about some must have questions for buyers. First and most important one is what contingencies (protection clauses) does the buyer have, when do they have to be satisfied (completed) and what happens when the buyer removes that contingency? Buyers should always ask their Realtor if there are details they can write into their offer to get it accepted. Buyers often ask if they will lose their deposit. The simple answer is almost never.
Buyers should ask what the closing process looks like. Buyers don’t generally understand the steps that need to occur before they can sign loan docs. Once they sign, Buyers need to understand what they need to do next and when they own their new home. A particularly important question buyers should ask is about insurance. What companies provide it and how much will it cost?
The bottom line is that asking questions makes you an informed seller or buyer. It makes you a smart person. An experienced Realtor is there to answer your questions, provide you with the possible answers or results of your decisions, and help you feel empowered, so that when you close escrow on that new home, you realize you did it! You walked through the maze, avoided the trap doors, and didn’t walk into the mirrors, or find the dead ends. You walked through the transaction with success.
Kim Murphy can be reached at [email protected] or 760-415-9292 or at 130 N Main Avenue, in Fallbrook. Her broker license is #01229921, and she is on the board of directors for the California Association of Realtors.