Jim Valentine: Who is helping you?

There are a lot of players in a real estate transaction. All are there to help and/or protect you…  theoretically. Who is really helping you? It is disheartening to know that not all helping hands in a transaction are actually conducting themselves in the best interest of the customer/client.

We experienced one such travesty ourselves in a transaction some time back. One of our investor clients decided to sell one of their rentals. We had the idea to sell it to the tenants. The tenants weren’t sure if they could afford it so we connected them to a good lender and sure enough, they could buy the house. They got a good price; we made concessions ourselves to help things and they were getting the proverbial “screaming deal.”

Then we got a call from their “friend in real estate” that was going to help and protect them. Their “friend” took a higher than customary commission, changed them to a more expensive lender and ended up costing her friend an extra $15,000… so they could get the same house they were living in when it all started.

Then there is the lender. Many inexperienced people approach a lender hoping that they can, in fact, obtain a loan. They listen to the lender and dance to the tune that the lender plays, not considering that the lender’s instruments may be out of tune. Different lenders not only have different levels of service and reliability, but they also have different rates. The lender is key to a transaction involving a loan, especially with little or no down payment borrowers.

Overpriced lenders go to great lengths to hide their higher fees. We just asked one for costs and were met with vague statements about how much the seller, our client, needed to contribute to make it work. No details under the guise of it being personal information of the buyer.

We asked what they would tell us if we just asked for fees on an inquiry and specified the details of the transaction we are working on. The lender wouldn’t say. These are often the same lenders that tell buyers to get their fees paid by the seller acting like they are giving them a money-making tip when in fact they are costing them more money by their high fees and risking them not getting the house they want when the seller doesn’t accept their proposal.

That false hope in a reasonable market also causes them to look for a seller so scarce they may as well be searching in a haystack for… looking for the impossible will cause them to miss opportunities that may come up in their appropriate price range.

In this situation, we also gave another lender the same scenario and have a much lower rate sheet to use in our Counter Counter Counter Offer preparation. One more detail, the original lender told us that we couldn’t be told what the closing costs were as it was “personal information,” yet he told us that the buyers were “in a pinch and need to be in a new home by the end of the month as their rental sold and they’ve been given notice.”

This is personal information of the highest order that can compromise their negotiation position. Most professionals and vendors are doing their duty to help and protect the customer. It is important, however, to pay attention to what they are really doing to make sure that it is in your best interest. After all, it is you they are working for.

It is a shame when transactions do not come together because of personal agendas contrary to that of the customer. If you don’t understand why things aren’t working, ask questions. Get the right answers. Don’t accept vague, “they need 6 percent seller contribution to make it work” as the final answer without details. There is no need to play games when you negotiate a real estate transaction. When you need concessions from the other side to make it work candor and honesty go a lot farther.

When it comes to choosing professionals to assist you with your Real Estate needs… Experience is Priceless! Jim Valentine, RE/MAX Realty Affiliates, 775-781-3704. dpwtigers@hotmail.com.