How to Conduct a Smooth Real Estate Transaction
Buying property, especially a home, can be a very emotional experience. As a buyer’s agent, it is your job to be the voice of reason, buffer and sometimes peacemaker. While many transactions are completed with minimal negotiation, others are full of bargains over price, repairs, timelines, etc. You have the power to set expectations and move all conversations back and forth. A few reassuring words can mean the difference between a smooth transaction and a painful transaction. Here are some tips to make the real estate transaction process as smooth as possible for you and your buyer clients.
Making an offer
Creating a real estate offering is an art. It is a careful balance between price, terms, contingencies and time-frame. To reach an acceptable agreement with the most favorable terms, make sure your buyers are aware of the market and the most important factors when MAKING an offer. Factors to consider include:
- comparable properties
- number of days on the market
- closing dates
- Requesting vendors to pay closing costs
- Timeliness and types of inspections
- Financing
- property insurance
- Repair (if any)
To ensure that this initial phase of the real estate transaction goes well, it is important to submit the proposal on time. While each state may or may not have a fixed time limit (such as 24 hours), it is in everyone’s interest to submit proposals as soon as possible.
Competing with other buyers
Competitive offers can create an exciting, stressful and worrying time for the buyer. If your buyers find out about a competitive offer, ask them to think about the value of this property.
They might want to revise their offer to be their highest and best offer. They should keep in mind that price is only one factor in the decision of the seller. Other terms, such as closing dates and concessions, can play a powerful role in the strength of competing offers.
Despite the strengths and weaknesses of competing offers, the seller can only negotiate one offer at a time unless there is a binding contract. There may be situations in a strong seller’s market where more than one offer is received at the same time. In these stressful situations, buyers can take comfort in knowing that they have made their strongest offer.
What if you have two clients interested in the same property?
It is entirely possible that you may have two different buyer customers interested in the same property. This puts you in a difficult position. While both are fiduciary/statutory duties payable to customers, you cannot give preference to one customer over the other.
In this case, you cannot provide price or strategy advice, and you cannot be any customer advocate. The information should be kept confidential, and both buyers should be told that you are representing two buyers interested in the same property. If you don’t feel comfortable in this role, you can ask a buyer if they would like to be referred to another agent.
Negotiating counter offer
Finally under contract. Does that mean you’re done? No. You still need to make sure buyers are on track. Before you can reach the final destination of closing the deal, you should do the following time-sensitive tasks to keep them in order:
- Financing
- Inspection
- Availability of property insurance
- Evaluation
- Title search
- And, finally, closing procedures
Navigating the waters of real estate purchases isn’t easy. There are several important factors to consider, including the time frame and the terms of the negotiation. A good licensee is one who is knowledgeable and competent, an effective communicator and negotiator, and with a thorough understanding of how to conduct a real estate transaction.
Completing the final stages of a real estate transaction
Finally under contract. Does that mean you’re done? No. You still need to make sure buyers are on track. Before you can reach the final destination of closing the deal, you should do the following time-sensitive tasks to keep them in order:
- Financing
- Inspection
- Availability of property insurance
- Evaluation
- Title search
- And, finally, closing procedures
Navigating the waters of real estate purchases isn’t easy. There are several important factors to consider, including the time frame and the terms of the negotiation. A good licensee is one who is knowledgeable and competent, an effective communicator and negotiator, and with a thorough understanding of how to conduct a real estate transaction.