Sometimes I feel like I’m the professional dancer on “Dancing with the Stars” who gets paired with somebody who just can’t dance.  No matter what you do, you’re in a tough spot since you are limited by your partners ability.  It is the same way when working with another realtor as you dance to the closing table together.

I recently had a deal where my buyers made a decent offer on a house.  To sweeten the pot, we decided to check the inspection paragraph that said we had so many days to do a home inspection and would either stay in the contract or give written notice that we wanted out of the contract depending on the inspection results.  We would not ask for any repairs at all.  I like to do this sometimes if the buyer is wanting to get the lowest price possible or if they want to have control of the quality of the repairs and can do them after we close.

I gave the offer to this agent, and told her we had checked what is commonly called “Box 2” for the home inspection.  At that point, the listing agent tells me that the seller will do any major repairs that need done.  (I found that odd……kind of like playing poker and announcing you only have a pair of twos right before the other player places their bet.)

Turns out the house needed a new furnace and the typical laundry list of minor stuff you see on just about any inspection report.  My clients decided not to take the house.  The sellers offered to first pay for half a new furnace, then a whole new one.  My people decided they still didn’t want the house. 

When I called the listing agent to tell her that we wouldn’t be taking the house, she told me she didn’t see how we could get out of the contract.   She said it with a tone like she was a hunter who had just trapped an animal.  Trying to be nice, since you never know when you’ll work with the same agent again, I asked what made her think that?  She told me that since the seller was willing to replace the furnace, we didn’t have a legitimate way to get out of the contract.    I reminded her that we checked “Box 2” for the inspection paragraph on the contract.  She agreed with that.  At this point, I am wondering why we are both using the same part of the contract to justify opposing positions.  Well, that is an easy question to answer.  She has never actually read “Box 2” of the contract.  She told me she thought “Box 2” meant that if the seller agreed to fix anything major, the buyer couldn’t walk away.  I was driving at the time (glad my car has Bluetooth), but I pretty much quoted her what “Box 2” said from memory while merging on the interstate……see, I’ve read the contract.

So, here I was trying to dance with somebody who didn’t even know she had feet.  I totally feel for her clients because how could they have known the terms that they agreed to if their own realtor didn’t??  FYI, that contract is the same one that all 2000+ realtors who are LBAR members use and has been for as long as I can remember, so it isn’t like she has an excuse for never having actually read it.  If you ever have a chance to interview agents, ask if they have read the contract.  If there is ever a problem in a real estate deal, any broker, mediator or judge are going to use the terms everybody agreed to when settling a dispute……so it is pretty important!

You ready?  Here it is:  “Buyer may void contract at anytime prior to 3rd Party acceptance.  All parties agree to sign release to that effect with the earnest money being returned to the buyer.”

There, that wasn’t that hard at all.  Seems pretty simple doesn’t it.  Makes sense too! That right there solves the problem we have all heard so much about short sales.

By adding that clause to any short sale contract, it keeps the buyer in a position where they can keep looking for a house while they wait and wait and wait for an employee of the lender to deal with their offer.  I’ve heard of people who waited like 4 months before they even get a counter offer from the lender.  Some people (including myself) have had the short sale process take so long that the house ends up getting foreclosed before the lender works out the short sale.

The bottom line is that short sales are a miserable experience for the buyer.  Often, they don’t work out at all and the poor buyer has missed out needlessly on other houses they may have wanted. 

I hope I have just started something that will become standard practice to realtors across the country.  It’s the right thing to do for buyer-clients.  Listing agents might not like it much, but since the seller is already in pre-foreclosure and isn’t going to walk away from the sale with a penny, they will agree to it.  The listing agent knows that if they don’t get a contract from somebody, the house will be foreclosed and there won’t be any commission check, so play tough or be on the lender’s schedule.

“But nothing on 5 acres has sold for that!”

“But my listing is 1000 square foot bigger!”

Both of these were replies from other agents when they asked what I thought of their asking prices.  I hate to give feedback to agents.  Very few are appreciative when you tell them the truth.  When I get an agent that is argumentative, I like to save their listing in my cart and see how close I was to its eventual sale price.  I’m almost always pretty spot on. 

I am working with a client who wants at least an acre in a rural setting, but is willing to have more acres.  Like most people who want to live in the country just to have some space, the actual size of the lot doesn’t really matter.  If 1 acre gives the same degree of privacy and function as 5 acres, most of these buyers don’t care.  I mean, hello, it’s not like they are going to farm it.  Yet, an appraiser will add/subtract value for having more or less land when appraising a piece of property like this.   That’s why you often see a realtor brag that the asking price is less than a recent appraisal…..It’s cause the market cares more about the quality than they do the quantity.

I am working with another client who is wanting to buy an affordable house downtown.  We’ve been looking at houses on the north end of downtown, which takes somebody who loves old houses and the downtown vibe more than they hate the crime that will be around them.  Let’s face it, few people with families are willing to live in an area that looks like it could be on that show “COPS”.  I’m not trying to say this is right or wrong, only that the buyer pool for most of the cheaper houses downtown is going to be a single person or a couple.  To those buyers, square footage doesn’t really matter.  They care more about the character of the house and how close it is to the places they want to go.  If they can get all that in 1200 square feet, all the better cause it means less to heat and cool…..which is a big deal in hundred year old houses with no insulation in the walls!  Again, an appraiser is going to add or subtract for square footage differences, but again, the market doesn’t seem to care.

Most realtors approach determining value in a purely mathematical way.  We all have these sheets of paper with values for things like a square foot of space, a bathroom, a fireplace, etc.  We all cut and paste value when comparing similar houses to one we are about to list.  Most agents stop there.  I can’t tell you how many times I have been in a deal where the listing agent says something like “I can’t believe we didn’t get more for this house, all the comps were much higher?”  That always tells me an agent doesn’t know the market……which is really about what buyers like and don’t like.  See, we don’t have anything on that sheet of paper for subtracting value for things like a half bath in an awkward spot, a bad paint job, a steep driveway, being on the main drag through the neighborhood, or having the ugliest granite counter tops known to man.  We also don’t have anything on that sheet saying how much value to add for having awesome closets, a private lot, great landscaping, etc.  Those are all subjective things.  Things you only learn by spending a lot of time with buyers.  That is why I always say the best listing agent is one who also works with a lot of buyers.