If you’re thinking of buying or selling real estate, there is no shortage of advice on the subject.
When friends, family members or co-workers hear that you are buying or selling, they come to the rescue with plenty of well-meaning, free advice. In addition, there are late night infomercials, home study courses, adult education classes, books, CDs and blogs like this one. With all of that information it seems like it should be easy to become a real estate expert.
In my case, I went so far as to take a two-day real estate investor’s course (complete with a two inch workbook and reference manual). Then I enrolled in a real estate licensing course, took the exam and earned a salesperson’s license. I still owned a condo that I bought from a developer and renovated a few years earlier, so I figured that made me an expert. Boy, was I wrong. While trying to buy my next home, I committed avoidable mistakes twice, risked my deposit once and passed on a great third property and regret it to this day.
Over the years, I’ve learned that, first, to be a true expert one needs knowledge and skill, which only comes from doing something regularly. (i.e. imagine a pilot that hasn’t flown in a storm.) Second, trying to represent yourself is not always the best idea, even for a seasoned expert. (i.e. “an attorney that tries to represent himself has a fool for a client”.) Third, executing a real estate transaction well requires an entire team of experts working together to assure that all of the bases are properly covered. Otherwise, if someone drops the ball somewhere, there may be no one to catch it. (i.e. contingency dates that require proper notice or leave deposits at risk.)
As the real estate industry learns from its experiences, each market cycle brings new challenges resulting in transactions that can easily become complex. While an experienced agent may spot potential problems, it might take a savvy attorney or lender to solve it or structure the deal it so that the client is properly protected if those problems do arise. Even seasoned buyers and sellers benefit by having someone cover their blind spots.
Despite all of the above, buyers and sellers are not careful enough about who they take their advice from. With one of the most important transactions of their lives on the line, some use lenders that don’t deliver the promised rate or that don’t process loans by contingency dates, thereby putting deposits and entire transactions on the line. Some hire friends just starting out in the business. Some hire, friends, relatives or the parents of their kid’s classmates with no further research. Some hire advisors based on their company affiliation, only to find that the person delivering the service lacks critical experience. In an effort to save money or because they do not understand the importance of having each professional by their side during their transaction, some do not hire all of the advisors that they should.
In the weeks that follow, I will follow up today’s blog with specific blogs devoted to more information about the role of each professional, how to find the best advisors and the risks that each advisor should help their clients avoid.
Good trusted advisors can save you more than they charge. The most common advisors in a transaction are agents, inspectors, attorneys and insurance agents. There are others that are not always used that could provide valuable insight.
What other advisors can you think of or have you involved in a real estate transaction and why should someone consider using them?
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