If there were ever a more stark contrast in how real estate transactions can come together, I don’t know that I could have made up two more different stories.
As a Buyer’s Agent
This is a tricky market for buyers. Thin inventory levels mean that representing buyers is both a lengthy and tough proposition. When my buyers find a home these days, we are likely battling a few other buyers at the same time. This time, however, we came upon a home that was in good shape, but had been over-priced and, therefore, on the market for well past the 60 days on market average for this home’s market.
Negotiations weren’t incredibly sticky. We had our number, the seller had their number. We found a happy medium. The overall inspection was not a huge problem, except for one rather significant item. It took some massaging, but the buyer and seller came to an agreement on this issue and we moved forward. But…
Isn’t there always a, “But…”?
In setting forth the terms of closing this transaction, the buyers added a couple weeks to the closing date to give the seller some room to find and close on a place themselves. It was a pretty thoughtful gesture, and was well received in the midst of our negotiations. Within three weeks of the closing date, we received an addendum asking for the closing to be kicked from a Friday to a Monday close. A little questioning revealed that the seller would not be able to close on their purchase until Monday, and did not want to institute a double move. In other words, moving the closing date out of convenience to the seller. Well, considering the buyer’s own timeline, this did not fit well.
In negotiating this wicket, we came to the conclusion that we would still close on Friday, but give possession to the seller until Noon on Saturday. When I referenced the need for an occupancy addendum, replete with damage escrow, per diem and hold over amount, I thought the agent was going to stroke out. He felt that he was being blind-sided and that he assumed my buyers would give his seller the use of the property for free, for the one day after close.
Needless to say, that was not a correct assumption.
Once the buyer signed occupancy addendum was sent to the listing agent, my phone exploded with an irate call about the addendum. It seems the agent had not taken the time to read through the addendum, which mirrored exactly what we had spoken about the day prior, before angrily dialing. In the agent’s haste to get signatures, he had quickly looked through the addendum and did not read the specifics. After walking through the addendum line by line, with the agent, I was able to talk him off the ledge and show that what was in writing, was exactly what we had discussed via phone.
As a Listing Agent
Two agents submit their buyers’ highest and best offers on my listing at the same time. The winning agent has all of his buyer’s ducks in a row. Everything is lined up, nice and tidy. We tick through the calendar, marching towards closing. Inspection results are addressed, contingencies are removed, we are smooth sailing to the closing. Communication is timely, effective, and productive.
Then there’s a phone call from the buyer’s agent (who is at an out-of-town conference), giving me a heads-up that there may be a hiccup and that we might need to delay closing by one day. As the listing agent, I am asked if I could get the answers to a couple questions, but purely for contingency planning. That is, if something does get delayed, my answers help figure out how to solve the issue rapidly. As it turns out, there was no need to even contingency plan, because the buyer, agent, and lender all came to a nice and tidy resolution. We still close on time, per the contract.
It is always a breath of fresh air when communication in a transaction is timely, efficient, and pointing out a resolution. Many assumptions are not any of those things. Many assumptions don’t clarify. Rather, they muddy the conversation.
When it comes to items that are specifically negotiated within the confines of a purchase agreement, there is no room for assumptions. Simply because you assume that a day of occupancy would acceptable to the buyers should not also mean that the buyers would be willing to give it rent free.
The converse to assuming a detail won’t matter within a transaction, is thinking two steps ahead in the transaction and attempting to lay the groundwork for a successful resolution for a potential issue. The assumption here is a worst case scenario. We are hoping and working for the best, but planning for the worst. Another good assumption here is that all parties want to resolve any issues presented on the way to closing.
We all make mistakes. The trick is in how we handle those mistakes. Do we immediately go on the defensive and attempt to blame everyone involved? Or do we approach mistakes with humility and attempt to understand where the mistake was made and how to remedy it?