I was talking with a reporter yesterday about the idea of disintermediation in real estate. I brought up the question of what is the ideal closing date, just as a quick and dirty illustration of why buyers and sellers need professional advice, even if they think they don’t. This morning’s Ask the Broker question provides more examples.
Here’s another one:
Cathy has a house closing on Friday. She’s the lister (sold in 21 days!) and the buyer came in without a contingency on the sale of another home (yay!). But: They live out of state right now and they have an out-of-state lender (boo!).
The sellers are buying their next nome in Boise, and that transaction is contingent on the sale of their home in Arizona.
Without discussing this with either Cathy or with their buyer’s agent in Boise, the sellers scheduled their closing in Boise for — guess when? — Friday.
They scheduled their movers to deliver their stuff to their new home in Boise on — guess what day? — Friday.
Now god loves the uninitiated in real estate transactions, and he graces them with the unshakable faith that things always work perfectly, as and when planned.
Especially with out of state buyers.
Especially with out of state lenders.
Especially with contingent sales.
Most especially with simultaneous closings — in two different states.
Consider the disclosure chain: The out of state lender to the Arizona buyer’s agent to Cathy to the Boise buyer’s agent to the Boise seller’s agent, with Cathy also keeping the lender on the Boise property (our favorite lender, Logan Hall of SallieMae Home Loans) in the loop, and with each Realtor and each lender keeping their respective clients up to date. Every new development has to traverse this chain. Everyone is on good terms, and they’re all pulling in the same direction against the forces of inertia and Murphy’s Immutable Laws.
So: Who needs a freakin’ Realtor, anyway? The MLS wants to be free! Once that happens, we can push the middlemen (count them in the previous paragraph) off to the side, and real estate will change hands just as easily as securities, airline tickets and cheesy DVDs. Just you wait and see!
The funny thing is, I spend very little time in the MLS. Sometimes I catch a hint of disappointment from my buyers, because we seem to find their perfect home too easily, too quickly. But it isn’t the MLS that does that, it’s selling dozens of homes to buyers who, for all their multi-faceted uniqueness, are often pretty easy to puzzle out. I just take them to the houses I know they want to buy. If I did your job every day, I’d probably get pretty good at that, too.
And my job is not so hard that you couldn’t work it out in due course. The stuff that Cathy’s worried about on this transaction is more a matter of good will and good organization skills than anything else. Knowing the law, knowing the contract, knowing that, if something can go wrong, it will. Knowing where and when to put your finger in the dike. These things can be learned in time. Keeping a steady flow of transactions in the pipeline is harder to learn, and this is why so many Realtors fail.
But the fact of the matter is, a real estate transaction consists of a vast number of intricate details, with innumerable potentially disastrous pitfalls. No two transactions are ever alike, and the only way for a Realtor to get good at managing them is to walk that high-wire again and again. The theory of the job you can learn from other Realtors or from classes or books. But experience cannot be taught, only acquired — one painful lesson at a time.
Who needs Realtors? That’s easy. Anyone who doesn’t do this job every day…
Technorati Tags: disintermediation, real estate marketing
j says:
I don’t see your point. Are you saying that whether or not you use a realtor, you can still end up like this seller? In your story the presence of a realtor had no effect on the unfortunate situation the seller found themselves. As an attorney who has handled contingent deals, as well as simulataneous closings (not recommended), I explain to the client what’s involved–and what’s invoved is mainly scheduling/timing — to avoid this type situation. Any glitch in one closing naturally affects the others. As the dominos fall, the client blames the professional for not properly advising them of the dos and donts.
Ultimately, who’s job is it to avoid this situation?
December 14, 2006 — 10:33 am