Most consumers appreciate the value that the expertise and market knowledge of a real estate professional can bring to a home purchase. If a property is listed for sale in the MLS – Multiple Listing Service – the buyer’s agent commission is pre-determined and paid by the seller. Therefore, a buyer gets the benefit of a professional agent without paying the fee.
Private sales happen all the time – and under normal circumstances they can be seamless and successful transactions. However, there is a huge potential for financial loss and personal hardship for these buyers and sellers. Consumers buying property without an agent must be aware of the risks involved. Here are a few tricky parts of a home purchase that should not be maneuvered without professional guidance.
NEGOTIATION. There are many negotiating factors, including but not limited to price, financing, terms, date of possession and often the inclusion or exclusion of repairs and furnishings or equipment. Negotiations can become emotional and personal. Without agent representation, sellers and buyers are forced to negotiate directly with one another. Personality styles – aggressive, passive-aggressive, confrontational – all of these come into play without a professional agent who is trained to negotiate ethically and reasonably. I could share stories. If you don’t hear about a lot of people buying without an agent, it is because a lot of these sales fall apart.
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DEFAULT Default can be a scary word. Default describes a scenario in which one party to a contract is not holding up their end of the deal. A buyer or a seller can be in default for many reasons. A seller in default risks losing the deal and being sued for performance. A buyer in default risks losing an earnest money deposit AND being sued for various other expenses including attorney fees. Not to mention the elephant in the room that if a seller defaults a buyer can wind up homeless!!
MORTGAGE LOANS The mortgage industry has become increasingly complex after the home mortgage crisis of 2009. The banking industry is governed by regulations enforced by state and federal government agencies. While loan officers are the point of contact for the consumer, much of the process is handled by processors and underwriters. The process is intricate and can have many hiccups and delays. A real estate agent has experience with the process and can anticipate and monitor issues as well as remain in contact with the lender. While a loan officer has incentive to keep the borrower happy, there is an even greater incentive to keep the agent happy – as the real estate agent can continually refer business their way.
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THE UNEXPECTED It can be hard to predict what scenarios will become part of a particular transaction. What happens if somebody has a serious health issue or a death? What happens if severe weather damages the home during the contract period? What happens if the termite inspector finds termites? What happens if the property floods? What happens if the appraisal comes back low? What happens if the appraisal is late? What happens if I find out a sex offender lives next door? What happens if my landlord has verbally agreed to let me out of my lease but at the last minute changes his mind? What happens if I get military orders to a different city? What happens if there are 2 sellers and they get divorced? What is Chinese Drywall? What is a cloud on the title? What if the seller was leaving to take a new job and the job falls through?
As a professional real estate agent, I always encourage home buyers to have realtor representation. This way all the disclosures are filled out and the seller is held accountable to comply. As with any sale of any product, the contract is only as good as it is written. My motto is ALWAYS be represented by a professional - especially for a large financial and legal transaction like a home sale or purchase.
Catherine Jouet, affiliated with Keller Williams Realty in Old Town Alexandria, is a professional real estate salesperson licensed in VA, MD, and DC.
Please visit MY WEBSITE or contact me today for all of your real estate needs.
