All Things Real Estate: Pitfalls before the closing

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Every once in awhile I come across a potential real estate sale, whereby the price has been agreed upon, inspection is completed. Then the paperwork (offering plan, all amendments, and financials if a co-op or condo or HOA) is reviewed by the buyer’s attorney, the contract is sent out by the seller’s attorney, the buyer’s attorney reviews it and has the buyer come in to sign with their 10 percent down payment check.

However, sometimes there is an issue with the language that both attorneys have to discuss and then agree upon. What if the buyer’s attorney changes some language in the contract and doesn’t communicate with the seller’s attorney as to those changes? He then has the buyer sign and sends the contract back with the down payment check with a note that says if you agree to my changes, then deposit my check; but if you don’t agree to my changes, then we will withdraw from the transaction. In one case, the changes to me seemed simple but not really specific, more open-ended as far as the timing of the written mortgage commitment, which stated that if is not received by a specific date, then either party could cancel the contract. The logjam was that the buyer’s attorney was concerned with getting the buyer’s deposit returned in the event of not receiving the commitment letter by the date stipulated in the contract.

In my 38 years, I had never seen language that allowed either party the right to cancel a contract in that fashion. The buyer’s attorney had told me he had been using that language for over 35 years and the other attorneys never had any issues with the way he had worded it, which replaced the normal standard phrase in the Blumberg contract. Is the world coming to an end or going crazy that a few attorneys can’t understand and agree that extensions are requested all the time? Our Covid environment, as well as severe storms and possible hurricanes, may come about, cutting off the power for days or maybe a week or more and our cell communication can be impacted too. So to request additional days or a few weeks is the normal course of action, for glitches do occur in the mortgage process, especially today.

No buyer under a contract in normal circumstances should have a threat of losing their deposit if both attorneys have a properly prepared the contract and engaged in a clear line of communications.  But there are times when some play games, don’t return calls or just play the “ego game” and want their specific language in the contract. Generally, serious sellers want to sell and serious buyers want to buy, but there can be a cog in the wheel. It could be the inspection or an appraisal is short of the agreed selling price, but also could be because of one or both attorneys cannot seem to agree on language and terms.

I am not here to bash attorneys. As in every industry, there are those who handle their businesses in the proper legal and professional manner and those who  don’t. I have been working with several for 10-25 years and have built excellent rapport and long-term relationships with them. But when there is an impasse with one or both attorneys who can’t seem to come to an equitable and fair understanding and agreement, we as brokers and agents lose our deals not because we had done something wrong or are to blame. I hate to say this, but there are times when lawyers are destroyers of real estate transactions.

I can also say we can also be blamed for deals falling by the wayside, too, due to either miscommunication, lack of knowledge, understanding or ignorance of the business or even stupidity or sheer lack of ethics and caring. I have seen the devious things that have happened over the years, although not too often, but they do occur. Multiple Listing Service fines can be a deterrent, but sometimes the commission is so great that the fine becomes a slap on the hand and there are not enough financial or other penalties for the abuse of the rules and regulations that are committed.

Every industry has always had its professionals and experts and then there are those who take shortcuts or engage in out-and-out illegal practices and activities There are those who try to make a quick buck because they just don’t care about taking the time and necessary steps to go through the sometimes arduous process to start and complete a transaction. Some of us, maybe 5-10 percent earn superior incomes and we do whatever it takes to not only successfully guide and hold the hands of our clients, so they know and truly feel that they have been provided the best services possible. But most important and critical to us is our future referrals that come out of all our efforts by the smart and hard work that we put into our deals.

Some of us earn, deserve, and strive for those referrals, which assist in creating future lucrative business. I call it “banking our future income” by past services provided to our client sellers, investors, purchasers and even renters. Most important is staying in touch with past clients which adds tremendous validity to our business acumen. We can be deal makers or deal breakers and that separates the men from the boys and the women from the girls. All of those participating in the process of real estate transactions, from the lawyers, home inspectors, appraisers, lenders, management and anyone else who  becomes part of the team effort must always understand who they are really working for. It’s the sellers, investors, purchasers and even renters and they should expect our best efforts at all times to end in a successful, satisfying and happy result: the closing of the deal!

Philip A. Raices is the owner/Broker of Turn Key Real Estate at 3 Grace Ave Suite 180 in Great Neck. He has earned designations as a Graduate of the Realtor Institute (G.R.I.) and also as a Certified International Property Specialist (C.I.P.S). Just email or snail mail (regular mail) him with your ideas and suggestions on future columns with your name, email, and cell number and he will call or email you back. For a consultation, he can be reached by cell: (516) 647-4289 or by email: Phil@TurnKeyRealEstate.Com to answer any of your questions or concerns.

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