A real estate sales transaction is a web of laws, disclosures, documents, material facts, perceptions, and opinions, and that’s just for starters! However, each sales transaction provides new insights into potential challenges and creates a learning opportunity for sellers, buyers, and agents alike. That being said, there are conversations to be aware of during and before the process of a home sale transaction.
Whether you are a seller or buyer, it’s always best to keep the conversations to material fact finding. If you are a seller, get to know the buyer’s financial details such as the amount of their down payment, whether they have a loan pre approval from a reputable lender, and how flexible they can be during the process. If you are a buyer, get to know specifics about the property, the neighborhood, and any potential concerns. Be Aware! Regardless of your position, do not share more than what is necessary and required.
A seller should not discuss, for example, that they have to sell fast because they bought elsewhere, or they start a new job and would hate to make the long drive, etc. This puts the buyer at an advantage.
For buyers, don’t over-praise the property or spend hours there picturing how you would set it up, don’t tell the sellers you are willing to overlook problems with the home, or that sellers can stay in the house for free after the sale to accommodate their move, etc. My years of practice have shown me that these type of statements come back and bite hard, and often it really hurts.
To keep negotiations fair and equitable, both parties must be completely honest to keep the process legal and ethical, but sharing too much or inappropriate information can cause loss of negotiating leverage. In many instances, legal problems can arise because of he said she said issues. I always inform my clients not to have direct contact with the other side in a transaction, and to always communicate in the presence of your agents.
I had a transaction where the buyer and seller met at the property and discussed a credit for flooring. At the time of closing, seller said he told buyer that he would credit $15 per square yard instead of installing carpets, but the buyer insisted that he understood the credit to be $15 per square foot. A square yard is nine times greater than a square foot, and the difference was $15,000. The buyer got his way at the expense of an agent who was not even present during the conversation.
Los Angeles CA Real Estate & Community Info 