“Mastery” means a highly developed skill in or knowledge of something. Some big thinkers believe that one cannot master anything until they have successfully performed a required task over 10,000 times. So it comes as no surprise that successful real estate salespeople are those who have “mastered” the art of maneuvering the ever-challenging minefields common in the business of selling real estate. A person who buys or sells an average of three homes in their lifetime is at a distinct disadvantage when engaging with a professional real estate salesperson.
When it comes to buying or selling real estate, here are five common misconceptions that people have when working with successful professional real estate sales representatives:
- They believe the real estate sales process is always “rushed.” Don’t be tempted by agent statements that in many real estate circles have become “cliche.” Some agents will represent that they have a buyer in order to get a listing, and once they secure the listing agreement, the prospect disappears. “My prospect is going out of town” or “is in town for only a day” is meant to compel a showing or rush a signature. Odds are that the prospective purchaser does not have a Learjet waiting for them on the tarmac. Remember, professional real estate agents are commissioned sales people with an agenda that sometimes causes them to “oversell” their own client. Never feel rushed to sign any documents without understanding the terms and consequences of an agreement.
- They confuse the number of real estate listings with the importance of closings. The number of listings an agent has does not necessarily reflect the agent’s experience in getting tough deals closed. Ask a prospective agent how many deals they have closed over the past years. It’s a great indicator of how they and their staff deal with problems that almost invariably arise in real estate. No matter how glitzy the marketing efforts, selling real estate must equate into real estate closings, otherwise, what’s the point?
- They accept agent referrals without further evaluation. The real estate transaction requires a lot of services from third-party providers. Title insurance companies insure the legal title to the property for owners. Mortgage applications can originate in the same office as the real estate company. Federal law requires that any affiliation between a real estate broker and a third-party provider to a transaction be disclosed. However, experienced agents have providers that they frequently use and are not required to disclose, such as an ongoing business relationship. Take, for instance, home inspectors (always have the property inspected) who determine the overall condition of a property for a buyer. They are largely dependent upon referrals from agents. Therefore, buyers should ask the nature of the agent’s relationship with their referral in order to avoid later disappointment should they find an opinion or service was improperly influenced.
- They accept legal advice From agents. Disclaimer: There are highly experienced agents who are as knowledgeable as some attorneys on how the law treats real estate, but they are smart enough to reserve comments on the law with clients. This is because agents that fail to heed the distinction between advising on real estate marketing and dispensing legal advice sooner or later find themselves in hot water for practicing law without a license. Agent opinions regarding the legal consequences of property title, legal relationships, and legal definitions cannot be relied upon. Don’t assume that an agent has any “legal knowledge” just because they handle large amounts of paperwork common in real estate deals. The sure-fire litmus test for when to seek competent legal advice is when an agent or other party to the transaction says “you don’t need to get an attorney”.
- They feel they’re stuck in their agency agreement. Once a seller signs a listing agreement or a buyer hires a buyer’s agent, a legal relationship is created. However, usually the relationship can be terminated long before the agency agreement was written to expire. People often confuse an agreement’s expiration date with the agent’s legal protection period. The protection period is the time where an agent is entitled to their full commission should a seller or buyer close a transaction with someone the agent had found during the existence of the agreement. This prevents people from taking advantage of an agent’s hard work and commonly extends 180 days from the date the relationship between the agent and client terminates.
Numerous variables affect the successful outcome of a real estate deal. Having an experienced professional tops the list. Good agents know how to usher a deal through completion with as little friction as possible. But the most satisfying deals are done when all parties to a transaction are kept well-informed and have reasonable expectations about the outcome as set by their advisers.
About the Author: Since 1990, David Soble has represented lenders, loan servicers, consumers and business owners on residential and commercial real estate, finance and compliance issues. He has been involved in thousands of real estate transactions, being responsible for billions in real estate loan portfolios throughout his career. He has over 24 years of real estate and lending law experience to support his tempered cynicism.
Disclaimer: You should not rely or act upon the contents of this article without seeking advice from your own attorney.