I’ve got my mind on my money and my money on my mind…
Protection is something that’s rarely discussed in our industry but it’s so important. Many agents love to blog about the market, how many lovely homes they’ve sold, how to look past a dated kitchen or a lack of curb appeal. Don’t get me wrong, I love all that fluffy stuff, too. What’s not openly talked about is one of the key factors you should be hiring an agent for. With the birth of the internet and sites like Redfin, Trulia, and Zillow, you as a buyer or seller have access to the listings and the ability to do market research yourself. You can identify your perfect home on your own, so why even hire an agent? You hire an agent because whether you realize it or not, this is going to be one of the biggest investments in your life and you want to make sure your hard earned money is protected.
You may also want to protect your heart. Sound silly? Maybe it’s not. You’ve walked into this home and you’re already picturing your son’s first steps in the living room, your daughter walking down that staircase in her prom dress, or late nights snuggled on the porch with a glass of wine. This home is going to become an extended member of your family, you’re emotionally invested. Then you’ve spent the time trying to decipher the reports which are written in another language (“serviceable” means what?) and you’ve decided that you can live with or fix the flaws because every home has flaws but not every home has what makes this one feel right. You’ve also sacrificed, choosing to forgo fancy meals or vacations to build up that down payment. But now comes the stressful part. Will the sellers like my offer? Will they like me? Did I choose the right amount to offer? Should I have gone a thousand dollars higher? What if the others offers are all cash? What if the other buyers have more money in the bank? What if we don’t get it? Will I ever find another home I love this much?
Let’s face it, you sign on the dotted line and you’re all in. It’s a legally binding document.
Now let’s take a step back… You just signed a legally binding document with someone licensed by the state to write legally binding documents. In California, agents are the only other entity beyond lawyers who can write such binding contracts and your savings (and heart) are on the line. Did your agent explain this contract to you? Are you aware of all the terms you’ve just agreed to?
How did you choose your agent? Was it because they were nice and made you feel comfortable? Are they a family member who maybe took a few online classes and thought, “Hey, I can sell houses now?” Or did you pick the professional who successfully does this for a living, who studies the market and the paperwork as though it were a craft that can be honed but due to consistent changes in the law can never be mastered?
A few days ago, we were invited to be part of a small, exclusive forum made up of the top agents from our brokerage to discuss the two contracts commonly used in our area. We challenged each other and used our real world experiences to pick apart each contract to point out the positives and negatives of each one because neither one is perfect for all situations. Most buyers have no idea that there are two standard contracts in our area and even worse, most agents are only comfortable working with one. However, it’s important to know that each purchase contract protects the buyer and seller in different ways. While the contracts can be modified a bit through the buyer’s choice of terms and terms can be negotiated later, the main fact is the contracts are very very different and the contract your agent chooses for your offer may be the difference between opening the door to negotiations and a hard no. For example, one contract obligates the seller to make repairs while the other one doesn’t… which contract do you think the seller is more likely to accept if he/she’s got one of each sitting in front of him/her?
This all comes back to working with a real professional. You can find the house but we are the ones who help you leap off that cliff and (hopefully) dive into homeownership. The quality of the contract your agent writes, the importance of knowing which contract the seller or their agent would prefer, the knowledge base your agent brings to the table in knowing how to give the seller what they want while still protecting your rights as a buyer – these are all the factors that can stand between you and the realization of a dream. Your agent can make or break it; they truly can be the difference between you writing an offer and buying a home. As a seller, an agent who understands all the purchase contracts coming in will protect your rights, too.
(Sara’s Notes: This advice may not apply to you as many states in the US require a lawyer to write up the contracts. If you do live in a state where the contract is not written by the agent, I’d still advise you to pick an agent who fully understands the process and can ensure the entity writing the contract executes it with your terms and conditions in tact. Contract writing is often the first step in the negotiation process so it is key to make sure that you have a strong negotiator with your best interests at heart. Once it’s in writing, it’s very hard to redefine your needs.)
Skokan Team with RE/MAX Star Properties 