Remember the term “Enemy Combatant?” This is a description of someone who is fighting against a country without a uniform. This became an issue when there were people trying to kill Americans around the world not in accordance with the Geneva Convention, the rules for armed conflict, if you will.
What does the Geneva Convention have to do with real estate sales? Not much. However, there is this idea that in real estate, you are always dealing with people who are fair and follow real estate rules. Oftentimes, the other side isn’t playing by those same rules, and it could be to your detriment if you aren’t aware of this BEFORE you decide to work with a real estate agent. For new real estate agents, you must also understand that there are definitely rules to follow, but the interpretation of them is different in every office, and with every individual agent. Here are some of the things you should be aware of if you aren’t already.
- If you are representing the buyer, the sellers and their agent may be seeing everything you email. A while back I was representing the sellers in a transaction. The real estate agent representing the buyer would just copy the email the buyer sent to them straight to me. There are two reasons why this happened. One, the real estate agent representing the buyer was not a full time agent, and really didn’t care all that much as long as they got paid. Two, the real estate agent representing the buyer didn’t like them. She felt that they were crazy and was looking for others to confirm her diagnosis.
- There may or may not be other offers. With our brokerage, Deerwood Realty, we will ask other agents in other real estate brokerages if they have contracts on a home. If they do, the answer should be some version of yes. However, things change. For example, if I call a real estate agent at 5 p.m. and ask if there is an offer, and they say they don’t have any, if they receive an offer at 7 p.m. from another real estate agent, they aren’t lying to me and they aren’t required to tell me that they have it.
- There may be a backup offer on a property currently under contract. When an agent says that they have a backup offer, they may well have an offer. The agent isn’t required and most likely, won’t tell you if that offer is worse or better than the offer they have agreed to. They will constantly remind you of that backup contract every time you go to negotiate concessions. There are no rules that prevent this.
- Disclosing motivation to sell property can be against the rules, but as a buyer’s agent, I usually know why you are selling. If you are moving to another state, I probably know that. If you have died, I usually know that. I’m not sure why seller’s agents tell me this information, but I usually know. Seller’s agents may even telegraph their need for an offer by saying, “just send me an offer, I need one.” What that says is that they don’t have any interest in the property and the seller is getting impatient. This does not mean they won’t get offended by a low ball offer. (I learned this the hard way…definitely not in the Geneva Convention for real estate sales)
- Showing reports may not be true. As a real estate agent, have you ever walked into a house and the sign in sheet has 100 or more names on it? Ever had the opposite, no names at all? What does this tell you? Well, if there are more signatures than spaces on the paper it usually means that absolutely no one is interested in the house. If there aren’t any signatures, is it possible that the agent pulled the sheet before you got there? This is a word of advice for real estate agents who may be reading this: Don’t make assumptions or condition offers based on the sign in sheet at a property! By the way, with supras, why are we even using sign in sheets? Is it for the instance where multiple agents are in the property at once, or is it to show the sellers that people are walking through the property? Is it a combination of both?
- A private inspector can flag things as being inoperable that are just their own incompetence. In the past two months, I’ve had an inspector not be able to open a door because he couldn’t understand the lock, an inspector that said the furnace didn’t work because he didn’t turn it on, and another inspector that said a faucet didn’t work because he didn’t know it was a touch free faucet. These things happen! Home inspectors are humans and imperfect. As a seller, VERIFY what the inspector writes is actually true. Also, realize this, if the inspector writes that there are 5 things wrong with a property, a seller is likely to agree to 1 or 2 things. If an inspector writes 30 things wrong, a seller is likely to agree to 10 or more things. This has no relevance to the condition of the property, and there are no rules about how many things an inspector can find.
The things I’ve mentioned aren’t always obvious. I think we all have a need to believe that every real estate agent is a professional. There isn’t anything wrong with that, but it is an aspiration, or a perception, which may be completely wrong. When you understand that there is no uniform set of combat rules that have been adopted by the nations of real estate, you will be much better off, both as a real estate agent and a home buyer or home seller.