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One of the most common and misunderstood documents used in the transfer of real estate is the purchase agreement. This document sets forth the terms in which you agree to buy or sell property. It is 8 pages of fine print, that when accepted legally binds you to what you have agreed as indicated by your signature. There are no mulligans or do overs. The question becomes “What did I agree to?

The Initial Red Flags

When I receive an offer on a property we are selling, the first impression I make is attributed to the quality of the offer I have been presented. You would be surprised at the poorly written, illegible document that another agent will provide to me. When the addendums are added this offer can be up to 20 pages. I have received offers from agents who fax it to their buyers for signatures who in turn fax it back to an agent and then fax it to me. It’s just impossible to read.

Personally, I believe that if you are involved in a transaction of several hundred thousand dollars you deserve better than that. At least my principals do. Many times I have called the other agent to let them know that we will not commit a client to a document we cannot easily read. In turn, we also have to provide the escrow company with a copy. Real estate agents are compensated very well and there is just no excuse to deliver a purchase agreement in its third iteration. A poor copy lets me know that I am dealing with a lazy agent that has no pride in their work, much less the best interests of their clients.

Can Your Agent Explain It?

As with any business, 20% of the agents do 80% of the volume. The question is “Are you working with that 20%”? A real estate transaction when finalized can produce a file 3″ thick. Saying it is very paper intensive is an understatement. We encounter numerous agents who do not understand at all, what they are doing. When interviewing agents ask for a copy of the purchase agreement. Read it and highlight the phrases or terms you do not understand. See if the person you are speaking with can explain it to you. If they can’t, call someone else. Your home should not be an on the job training course. Many salespeople think that they can fall back on the broker for support. Someone to bail them out of hole they may step into. Also, does your real estate agent have a broker or a salesperson license? A broker license is harder to obtain and allows more responsibility. It is also more respected.

Marketing the House, If You Only Knew

I see so many new properties that just come on the market with only a description, and not a single picture. You get one chance to make a good impression. These days so much of the marketing has shifted to online content, allowing a property to be on sale 24 hours a day. With the majority of home buyers beginning thier search on the internet is your agent up to date on the latest sites and technology? Or did they arrive on the Mayflower and have no idea how reach todays tech savvy consumer, much less use a computer. By the way these are also the ones convincing you to spend 6% to get your home sold. Because it costs money to market a house properly? Lastly, try calling your agent and see if they answer the phone or do you have to leave a voice mail. Then think of the person who wants to buy your house. Will they leave a message?

I Hate Surprises

If you are selling a house your agent should be able to provide you with an estimated sellers closing statement. This itemizes the costs that you may be ask to pay as part of the contract. A responsible agent will go over this with you before you agree to sign the contract. Additionally, all of the reports and required inspections should be completed prior to accepting an offer so there will not be any additional costs you have not prepared yourself for. A prepayment penalty is a big one, usually about an additional 6 months worth of interest.

Good Agent – Smooth Transaction

We have been fortunate to work with many good agents in the Pasadena area. We have also had to work with many agents who just get in the way, and cannot find their mouth with a $20 pizza. The best way to prepare is to interview at least three agents, before deciding on one who will be representing you. Otherwise you may be buying lunch.

Tags: buying or selling real estate, Pasadena real estate, pasadena real estate agents