Observations upon the reopening of the real estate industry in Pennsylvania
James L. Goldsmith, Esquire
My contacts with the real estate community more often are with those who practice in the residential market…where the dam seems to have broken. The pent-up frustration has led to a flood of activity in some of our counties and cities. Consumers caught in the pinch are relieved as are licensees are now out and about. Licensees are relieved as well.
What do I see and what are my concerns? First, I note the great disparity between those who have, and those who have not, made a point of studying the new standard forms and the best practice tips that have been made available by your state association. The group that has, knows that not everything one needs to know is intuitive. There are times when study and creating an appropriate protocol are extremely important. This is the group that doesn’t lead with emotion, but rather with intellect and study. These are the folks who know the forms and why they are important.
Take, for example, the seller you have listed who thinks little of the threat of being infected with the coronavirus as a result of someone visiting the house he or she has listed. Some are thrilled to have such a seller and dispense with the necessity of collecting HSA forms and the worry of PPEs. Others understand that it’s not simply a matter of protecting the seller’s health and home. There are the buyers who may refuse to visit a property because of a seller’s refusal to complete an HSA or because the seller is unconcerned with the protocol recommended.
An agent’s personal preferences should not be an issue beyond the agent’s concern for his/her personal wellbeing. While an agent may tailor protocol for given buyers and sellers, understand that a protocol that accommodates the widest swath of consumers may be the best approach. Mask wearing for a matter of moments and carrying a container of sanitizing wipes is not all that difficult. The use of HSAs and the explanation that makes securing them easier is, likewise, not particularly difficult either.
A second observation has to do with the number of showings and the competition for scarce inventory (in much of Pennsylvania). One agent told me she had 40 showings on a property newly listed after the ban was lifted. My thought was isn’t it better to have just one showing that results in that perfect offer? Listing agents need to do a really good job of understanding the market value of the property and the seller’s expectations. It is just as important to help the seller set realistic expectations. I say this because if a seller’s expectations can be satisfied without having hundreds of people troop through a property, isn’t the objective satisfied? For many sellers the objective moves and that is not always a good thing. Encourage your sellers to accept the offer that satisfies their original objectives and not to be wooed by what they perceived to be an escalating market. Of course, if they prefer to have their property on the market for a longer period and have more people troop through and entertain more offers, so be it. Just understand what you are in for.
My next observation revisits old ground. For buyer agents seeking to put their clients in a property in a competitive market, thinking outside of the box is critical. Does your buyer really need to make their offer contingent on financing? You realize, of course, that an agreement can waive financing even though the buyer plans on seeking a mortgage to fund the purchase. One has to be extremely careful, but there are many situations where the buyer will secure a mortgage without difficulty either because of their financial situation or because they are borrowing way less than the 80% loan-to-value ratio which is the norm.
Further, what about considering a substantially larger deposit? Generally there is little risk in a high deposit because most of the time buyers extricate themselves from agreements when they are dissatisfied with inspection results, etc. Again, you have to be at the top of your game to assure that deadlines aren’t missed and that no one errs in the process. Think too of limiting the inspections, though I would never tell a buyer to forego them altogether. A home inspection can generally be done in a short window of time, less than the default period set in the ASR. Consider having the inspection completed within a three-day period so that if your buyer walks away, the seller has barely skipped a beat. That coupled with a substantially high deposit and no mortgage contingency can win the day.
As I stated at the outset, being good in this business is not a matter of intuition. It is intuition, study, consideration, practice, rehearsal, care, precision and intent. Give it a try.
Copyright © James L. Goldsmith, Esquire, 2020
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