Hollywood isn’t always known for portraying the knitty gritty of those real life endeavors such as buying real estate. Even slogans like point, click, and mortgage from one of the nation’s highest volume loan producers is really just an attempt to make something nuanced seem like a caveman could do it. Oversimplifying is often a useful tool in 2021, but most sellers want to feel empowered and understanding the process is crucial to harnessing that power. One of the ways to do that is understanding who will be involved in the process and what their role will be. A real estate agent is pretty widely accepted as the right place to start but where do the other position players fill in?
The Agent
Real estate agents are often referred to as the quarterback of the transaction. This is because we are usually facilitating showings, signatures, and email chains to keep everyone involved cognizant of the tasks at hand. We also tend to be the first stop when hunting for real estate assistance which gives us the first crack to pass along a referral. Agents interact with so many types of vendors from painters, to plumbers, to mortgage brokers and everyone in between, it is just a natural fit for us in this role to lend a helping hand by referring our clients to one.
One thing to keep in mind is to pick the right agent in the first place. If you fail to pick the right agent, you may also be failing to pick the right vendors you’ll need later on. Successful people tend to surround themselves with other successful people so don’t skimp on finding the right agent just because your second cousin said their high school best friend is the best agent on the planet.
The Attorney
Buyers will often either trust an agent referral and or look to the attorney they used when they bought the property. Attorneys in Massachusetts are trusted with drawing up and negotiating purchase and sales agreements, doing title work, reviewing condo documents, and completing other vital processes to help close the transaction. A seller’s attorney will draw up the purchase and sale but is often responding to volleys from the buyer’s agent as they perform their due diligence. Seller’s attorney’s do not hold closings but can hold escrow, the deposits that accompany the offer, and/or the purchase and sale agreement.
A common flaw that sellers, along with buyers, will make is getting a friend who is in environmental law to do their closing for cheap. Attorneys typically cost under $1000 per transaction, a cost most sellers will find palatable to do the job right.
The Appraiser
While this person will show up on the buyer blog, and the buyer’s ledger at closing, they are impactful and will involve your listing agent. Appraisals are ordered by lenders, paid for by buyers, and attended by listing agents. They are tasked as an independent third party to verify the value of a property. This person is contracted to help protect the bank’s investment in a buyer(s). Where appraisers impact a seller is both in time lag on knowing an appraisal and the subsequent possibility of a short appraisal.
Since banks often won’t order appraisals until purchase and sale is complete, usually 10 or so days after the offer, it is not uncommon to see an appraisal come in on the back stretch of a deal. The issue for sellers, particularly in an accelerated market, is if the appraisal comes in below the offered price, a buyer may have an exit/negotiation strategy come to light. While no one may want to blow up the deal, a seller may be even less inclined. Perhaps they are already under contract elsewhere for a house or they don’t want the negative stigma of a deal falling apart if they must re-enter the market. This is where you need a Realtor who knows the market and can drill in on the criteria that will yield the best terms but also lead to the highest success to transact.
Seller’s will often get enamored with the highest priced offer. Don’t be fooled, the offer price only matters if the transaction closes. Lean on your expert agent selection to walk you through the ins and outs of an appraisal before you list.
Conclusion
There are slightly fewer chefs in the kitchen than being a buyer. You and or your representation will have to deal with these folks along with buyers, buyer’s agents, inspectors, and more, so it isn’t as black and white as it may appear. What is crucial to know is to build your team with a rock solid anchor point and work with that rainmaker to pick the right accompaniment to ensure a smooth process.
Beyond the agent, your attorney selection will be the next most crucial decision you make. Appraisers will tug at your emotions and sometimes ruin a good night’s sleep but don’t worry, if you choose right from the start and surround yourself with a team that knows how to execute the X’s and O’s, not just draw them on the whiteboard, you will be good to go.
