No matter how hard the attorneys work to protect everyone in a real estate transaction, with longer & longer contracts, there will always be loopholes and/or room for deference in interpretation. Real Estate transactions are fraught with danger, to anyone who doesn’t have a complete understanding of the process, the contracts and the disclosures involved. For instance, attorneys probably understand the contracts, yet understanding buyer and seller needs, knowing the inventory, and negotiating a successful closing may elude them. Realtors on the other hand, may be better at asking the right questions, knowing the inventory, and proper negotiations; yet, many do not fully understand the contracts they are advising their clients to sign.
Over my 20 year real estate career, I have been asked to teach many classes. The areas I thoroughly enjoying training in the most are those on contracts. I take great pride in having a thorough understanding of their every provision, even though they usually change at least once a year. My hope is that some day every Realtor will have this thorough understanding and make life easier for all our clients and the entire industry as a whole. Perhaps even putting attorneys out of work 🙂
One particular area of the California Residential Purchase Agreement, where most people have a complete lack of understanding, is the section dealing with “Minimum Mandatory Government Retrofits”. I know it’s a mouthful, and yet, not knowing what it means, and inadvertently checking the wrong box, can bind someone to untold costs, with no way out. This section goes way beyond the simple mandates like Smoke Detectors, Water Heater bracing & Carbon Monoxide Detectors. Quite often, it deals with building codes or updates that few people, outside the politicians who enacted them, are even aware of.
Example; about 10-12 years ago there was a city here in Southern California that had a law on their books (for no other reason than to punish people for not paying them permit fees when doing even the smallest upgrades to their home). This law roughly stated that when selling your home, if it was discovered that you had done more than $1,000 in work, to your property, which required a permit, (at any time during your ownership), and no such permit had been issued, then the entire property would now have to be brought up to current code standards. In many cases, having the wrong box checked, could cost sellers (or buyers) tens of thousands of dollars. Another scary example (brought on by our recent drought conditions) is the real possibility that low flow toilets, faucets and showers heads may become mandatory upon the sale of a home (its happened before). Currently our public officials are pushing to have every home built prior to 1994 (which is 80% in the OC) to have such water saving devises in the next few years. There was a front page story in the Orange County Register last weekend, about a woman who contracted to do a $17,000 remodel and was informed that all plumbing fixtures would have to be changed, to the tune of $70,000. Unfortunate side affects to passing laws without considering all ramifications.
The problem is that there is a small check box for buyer & another small box to check for sellers, which, when initiated, makes that party (or parties) liable for ALL known & unknown “Minimum Mandatory Government Retrofits”. How do I avoid potential problems?, you may ask…Don’t check either box! There may not even be any such retrofits for this home and mandating it “your way or the highway” could lose you the home of your dreams for no reason. Likewise, I have always believed and taught my fellow Realtors that, every transaction should be a Win-Win for everyone involved. Don’t ever check a box with the intension of taking advantage of someone who doesn’t know any better, because it will usually come back to bite you when you least expect it. If something is discovered during escrow, all parties can negotiate from a level playing field.
So the bottom line is, use a Realtor for all real estate transactions. Use a Realtor you trust, believe and are comfortable with or who comes highly recommended by others. Never choose someone because they pronounce that they will “get you more money” than anyone else or do it for less pay (commission) than everyone else. There are costs in running every a real estate business and if someone cuts their commission in 1/2, you can bet that you are not getting something that you deserve. Ask yourself this; if an agent’s first act is to give away their money, how likely are they going to fight for your money (you get what you pay for). A good Realtor will negotiate the Best Price & terms for you, make sure you are thoroughly protected, Save you tens of thousands in hidden costs, and get you family moved in the time frame you are looking for.
For more great information like this or to search for homes go to; www.OrangeCountyRealEstates.com