Mastermind forSeptember 21. Returning Deposits and Reading Clauses
Yesterday afternoon the page went out; ‘Who wants to be a millionaire? Mastermind can help’. Once again, a great turnout at this morning’s meeting by those who are actually committed to being the best in their field. In case you didn’t make it you missed a discussion on getting clients to take the leap into home ownership, a lesson in reading clauses, dealing with frustrated or angry clients, and returning deposits after deals fall apart. Lets get started.
One agent recently listed a new one bedroom condo downtown. It is priced a little on the high side but the premium over similar suites in the building seems fair given that it has a very large patio with a killer view. Two days of very busy open houses had generated a lot of interest but no offers to date. 4 people, unrepresented by a realtor, saw the property and all expressed interest and despite several follow-up calls, the listing agent just could not get one to take the leap. One person said they were waiting to transfer money for a deposit, one person was waiting to hear back from their mortgage person, and one person asked to be notified if an offer comes in. Seems like there were some stalling tactics out there which is probably normal considering the property was decidedly for first time buyers. After a quick discussion we all thought that timing needed to considered. The condo has only been on the market a week so far, and given the area, it may take several weeks to generate an offer. Stick to your guns.
Talking about taking a leap, our conversation turned to developing talking points with people who are frustrated and angry that they missed buying a house years ago and will now have to either consider a much smaller property or borrow a lot more money. What do you say to someone who says they have been waiting for the market to correct before they buy? We live in a real estate obsessed city. We all talk about how fast properties have appreciated. People say things like ‘I’ve made over $200k in the last year on my house’. The reality is that the house may have appreciated $200K but you haven’t actually made the money until you sell it. Real estate has become more about the investment and less about shelter. Maybe, to those people who have waited, all you need to tell them is that it is never to late to get into the market.
Next topic; Reading pertinent information. I will admit it. There was a time when I would breeze through Agreements of Purchase and Sale. Today, our obligations to protect our buyers and sellers has never been stronger. We cannot afford to leave any stone unturned. So here are today’s words of wisdom; Read every scrap of paper that concerns a property. Study the attached schedule B, the home inspection report, and of course the listing. If you have questions, ask the right people. If floor plans are available, print them off and attach them to the offer as another schedule. Sidetracking for one minute I recently heard people talking about another agent’s 5 page long Schedule B. In it, the agent (from another company) literally waived any responsibility for anything they did, from the measurements to the names of the sellers. It seemed clear that this agent had more than one run in with disgruntled buyers so the lengthy schedule B was there to protect them. Remember, when you list a home, you are contractually accepting responsibility for the accuracy of the listing. You cannot opt out of that with a clause. You would be surprised how many offers come across my desk with a clause that asks the buyer to verify the information in the listing. It begs the question; what responsibility do companies that simply post listings to MLS have? The answer is clear. They must take responsibility for the information. But do they? Probably not. That is an issue you may want to take up with the Competition Board. Of course that’s just my opinion and not necessarily the opinion of Bosley Real Estate.
Finally, someone asked what happens to the deposit if a deal falls apart? The simplest answer is usually the best answer. The real estate company holding the deposit cheque can be given back to the buyer by mutual release only. Failing that, it is released it by court direction.
Have a great week.