Real Estate Round-Up: Y is for Yes
Last updated 10/15/2021 at 6:38pm
Wouldn’t it be great if “yes” really meant “yes”? Many times, “yes” seems to mean “yes” only if it isn’t inconvenient or doesn’t make things more difficult. But “yes” should mean “yes” and “no” should mean “no.” Simple, no discussion, it’s either “yes” or “no.”
In real estate, the lines are no less blurred on the “yes” meaning “yes” than in any other part of our lives. I can hear you now, saying, well, when I say “yes” it really means “yes.” Let me share some stories of how “yes” becomes more of a “maybe” because “yes” is no longer easy or convenient.
Imagine you’re a seller and you’ve completed all your required disclosures to the best of your knowledge. You receive multiple offers on your property and reach a mutual agreement with one of the buyers, and open escrow. Your Realtor is able to help you negotiate another one of the buyers into “back-up, position #1. Purchase agreements are great tools to keep everyone painting within the lines. The purchase agreement has “boiler plate” timelines that spell out specifically when the buyers and sellers must do certain activities or provide documents or reports. The purchase agreement provides how, when and who can cancel the purchase agreement.
One key “yes” paragraph in the purchase agreement is paragraph #11, Condition of Property. It states “unless otherwise agreed in writing: (i) the property is sold (a) “AS-IS” in its present physical condition as of the date of Acceptance and (b) subject to Buyer’s Investigation rights…” There are multiple “yes” statements in just the first phrase. So, what does the seller believe they are agreeing to? They believe their “yes” is that the property is sold exactly like it is when the offer is accepted. Remember, the seller has completed disclosures to tell the buyer what they know about the property. Hopefully, the seller’s “yes” began with full disclosure on what is or what isn’t working or in need of repair.
The buyer's “yes” statements focus on their investigation rights. When buyers submit their offer, without any additional language added to the purchase agreement, they are agreeing to purchase the property exactly like it is. They also understand and agree that they can inspect the property.
This is where the two “yes” statements can come into conflict. Sellers would like to sell their home in its “AS-IS” condition, and buyers would like to have the investigation rights to protect them from being obligated to purchase a home with problems or deficiencies. Both of those statements are truly “yes” statements, but in real life how does this work?
Let’s go back to the original premise that the seller has told the buyer everything they know about the current condition of the property. End of discussion, right? Not exactly, because of the buyer’s “yes” clause that they can investigate the property to determine its current condition. Sellers like their “yes” position. Buyers like their “yes” position. But they almost never stop with both “yes” conditions. Inevitably, the buyer asks the seller to modify their “yes” position and fix deficiencies the buyer discovered during their “yes” position of investigating.
Whose “yes” stopped being truly a “yes”? I’d say that the buyer’s “yes” became more of a “yes” only until it became inconvenient. What would happen if both “yeses” were mutually respected and honored? Buyers would have to decide if they still want a property, if deficiencies are discovered during their investigative time period. I suppose, if they loved the property enough, that is how it would work.
I’m not advocating for “Yes” statements to be firm and unamendable, but in a world where our “yes” doesn’t seem to really mean “yes,” it makes negotiating much more difficult. The more we allow “yes” to mean, “yes” only if it’s convenient and easy, the harder it is to define what truly “yes or no” mean.
I’ve been away for a few weeks. Traveling to the midwestern U.S. I then returned to my health being challenged by COVID. Both experiences made me pay attention to the importance of our “yes” statements. What do I believe when challenged? Does my yes really mean yes? In real estate, Realtors are the facilitators that help sellers and buyers find the resolution when each of their respective “Yeses” are in conflict. It, however, starts with you. You and your “yes.”
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.