January 27, 2016
by Sean Hess, Owner, Broker, Author
Did I Use a Realtor?, OR, Why You Should Never Represent Yourself in a Transaction
When I bought my house three years ago, Yes, I Did Use A Realtor.
I did not use myself, either.
“What?” you say. “But you literally wrote a book about buying real estate!”
You are correct. I’ve been in real estate since 2001, and I know my way around contracts.
But when my wife and I were sitting there signing our contract for new construction, I was handing every page to another Realtor to review.
Because I was the buyer, and I was thinking about elevations, and floorplans, and colors, and what rooms are going to be for the kids. I didn’t have the mental focus to deal with the finer details of what I was signing.
So I had my Realtor there with me, pointing out things like, “You do know you are paying for the title insurance?” and “You do know that ceiling fans aren’t included even though the house is wired for fans?”
My Realtor didn’t change a word on the contract, but helped as a guide, managing my expectations. As experienced as I am, it made no sense for me to represent myself.
These are pretty big contracts, and I needed a second set of eyes and someone to remind me of things I was missing.
I actually asked the agent to check whether I would get my security deposit back if we backed out for some reason (just like a buyer!), and the Realtor confirmed that if our financing fell through, we would get back our deposit. I was too distracted to be able to focus enough to find that in the boilerplate of the contract.
Another example of something I needed a second set of eyes for? The home elevation.
I bought the same floorplan as the model home. The model home had a three-car garage with a side entry. I bought the version with a two-car garage.
So as I am signing the paperwork, they hand my wife and me a paper with four elevations to choose from.
An elevation is picture of your home as it will look from the front. Each elevation is a little different (the rooflines might be a bit different, the entry might be a different, one of the elevations might have stone or brickwork). Anyway, that is how they can build the same house next to each other without them looking identical. As I am looking at the elevations, I realize there are no side-entry garages (even though the home I am sitting in has a side-entry garage).
It took me a few seconds to figure it out. Only the three-car garage had a side entry. Then I confirmed it with the site agent.
But if I’m a buyer just off the street, and I go in and sign the contract and don’t have anyone sitting next to me, I’m not going to make that connection.
So they are going to start construction—they are going to lay the foundation, and frame the home, and it probably won’t even be until they start putting up the plywood and sheet rock that a buyer would notice there is no side-entry garage like there is on the model.
When things like this happen, people get upset, they blow up, they yell and scream, and they are angry until closing.
If a Realtor would have been there just to point out that detail (“Oh, by the way, did you notice that there won’t be a side-entry garage?”), they provided a clear benefit right there. The Realtor didn’t change the contract in any way; they just alerted the buyer to a small detail so it didn’t become a big problem six months later.
It helps to have that someone with a detached perspective and focused on the abstract details of the contract
Back to the garage. My Realtor reminded me, “You don’t get a garage-door opener with the plan, so you will have to buy that separately as an upgrade, or put one in yourself after the home is built.”
So if nothing else, a Realtor helps you manage your expectations. They can help you put your sale in context with what’s normal in other sales so you don’t feel like you got ripped off.