Yesterday (Saturday afternoon) I got stopped in the parking lot of my office by a gentleman was wondering when my office would be open. When I asked what he needed he said wanted to get a blank purchase agreement form. I will stop here on what happened, because that is not relevant for this discussion.
His request really made me think. He was obviously planning to buy or sell a piece of property on his own. The fact that he only needed a purchase agreement tells me he is over his head. Our purchase agreement forms are 12 pages long. Most purchase contracts I draw up average 20+ pages. There are addendums in almost every sale. Depending on the age of the home you have to deal with lead based paint. If there is a 1031, a VA loan or one of a ½ dozen things that may come into place you have addendums.
If he didn't know that, how qualified is he to deal with the timelines, disclosures and contingencies? Buying or selling real estate is not amateur night. You need a licensed professional. If you have the buyer and seller and have agreed on the price you still need a licensed professional. If not a REALTOR®, get a good real estate attorney. Someone needs to be responsible for drawing up the documents correctly and seeing that your rights are protected throughout the process. Someone needs to be sure that the transaction requirements are met on time. In the end, without a license and insurance, you may be in the cold if something is done wrong.
Here are a few of the groups of folks I run into who try to do it on their own:
- For sale by owner
- The We Buy Home / Subject to Mortgage buyers. Not having a licensed professional in the transaction makes it easier for them to take advantage of the sellers.
- Friendly sale between family members or friends.
I can give many examples of horror stories where they tried to be amateur experts and things went south.
My advice to everyone who tells me they are going it on their own, get a professional. If not a REALTOR® than get a good real estate attorney to be sure it is done correctly and your rights are protected.
Randy at least he tried to get one from you instead of going to the local office supply store and buy one of the off the shelf Purchase Agreement forms.
Some people just don't realize that saving a few dollars buy not using a Realtor could end up costing them a whole lot more in the end, not to mention that aggravation and sleepless night along with it.
Great Post Randy!! You hit the nail !! I agree with you. I deal with a lot of FSBO's and getting them to see this is a pretty tedious chore!! Most of the time I do get them to realize the benefits of using a REALTOR® Thanks for the post!!
Darlene
Randy - as you know a true professional Realtor is worth his or her weight in gold... the value we bring to the table far outweighs the commission. If anything some of us are underpaid for the benefits we provide... not to mention the risks we accept in today's litigious society.
Stacy - I agree completely.
Don - You make a good point. The bar is too low in many cases.
George- Many times when they realize it, it is too late.
Marc - That is the big problem. Even a small error can be quite expensive.
Darlene - I am sure they are glad that they used your services.
Jesse & Kathy - You are so right. I do not think most people realize the liability involved.
One of my favorite parts of working with customers whther they are buyers or sellers is the explaination of the agreements they enter into. Most people are amazed how once translated, they have a better understanding of the document. This comes from years of experience I tell them. Most often they breathe a sigh of relief! Well done Randy!
Good luck and sell well!
Allison - The contracts are long and confusing to consumers. I am amazed that someone once they look at them, would try it on their own.
Neal - I would never give a contract with my name on the bottom either.
Randy,
To the average home buyer or seller on the surface a real estate transaction, including the mortgage process, seems rather simple, but when you go below that surface things will get much more complicated. Most people do need a professional to work with to avoid potentially costly consequences later on.
Elaine - Excellent point! I am licensed statewide, but would never try to represent people in other counties or sell types of properties that I am not qualified to do professionally.
Esko - If one of the principles thinks they are qualified, what about the person on the other side?
Lori - I remember comments from a a talk radio show guy when speaking to someone who boughtr property without being represented and then had all kinds of problems.
"So this $500,000 home, that was a minor purchase for you right?" Of Course you know the answer. "Don't you think you should have had your interests protected? Why didn't you have someone with a license and insurance review the documents before you signed them? You know it took teams of attorneys to create those forms and I am willing to bet you diod not understand everything you signed."
Randy,
That is the all time question of the decade? Did you give them a form or not? I think we should do a survey on who gives them a form and what happens and who does not give out a form, what they say and their results. Sometimes, I think that by being the nice guy you win..I would love to see the odds.
It is sad because we see the dangers they are exposing themselves to but do they?
Gary - The big problem for many doing it themselves is they just do not know what they do not know. They will miss many critical steps or details and will find out later when they are drug into court or worse.
Cait - Especially a problem if that contract had the agent or company's name on it.
Latonia - One bad lesson will cost them big bucks, but it will be too late when they find out.
Kevin - Good points from the public's point of view, very few will be professional. I am sure they are not as concerned about the profitable part. I am of course.
Mary - I am sure a better way to address that is to pose the question to an attorney. I am sure they will give you a list of red flags, especially if the form have your name or company pre-printed oin the forms.
Marvin - I have not heard back from him. He may have spoken to another agent in my office.
Margaret - I bet it takes a bit of time to go over them with your clients. It usually takes at least an hour for ours.
I am sitting here right now with the TV on and being inundated with commercials from a buy owner company. They make it sound so simple that why would anyone need a professional? Just buy the "do it yourself kit" and SAVE ALL THAT MONEY!
We have to do a better job of letting the public know what we do and that our service and professionalism is worth our fee.
I could lose my license for giving someone forms as far as I know, so I would never do that.
There are some people who are perfectly capable of buying and selling on their own. I truly believe that.
It's like this....I've been doing my own taxes since I was 16 years old. I don't need a CPA to do them for me but I know plenty of people who do need help and would mess up if they did them themselves.
We are here for the ?% of the population that shouldn't/couldn't/wouldn't buy and sell on their own.