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You Need a Professional to Buy or Sell Real Estate

REALTOR(R) Yesterday (Saturday afternoon) I got stopped in the parking lot of my office by a gentleman was wondering when my office would be open. When I asked what he needed he said wanted to get a blank purchase agreement form. I will stop here on what happened, because that is not relevant for this discussion.

His request really made me think. He was obviously planning to buy or sell a piece of property on his own. The fact that he only needed a purchase agreement tells me he is over his head. Our purchase agreement forms are 12 pages long. Most purchase contracts I draw up average 20+ pages. There are addendums in almost every sale. Depending on the age of the home you have to deal with lead based paint. If there is a 1031, a VA loan or one of a ½ dozen things that may come into place you have addendums.

If he didn't know that, how qualified is he to deal with the timelines, disclosures and contingencies? Buying or selling real estate is not amateur night. You need a licensed professional. If you have the buyer and seller and have agreed on the price you still need a licensed professional. If not a REALTOR®, get a good real estate attorney. Someone needs to be responsible for drawing up the documents correctly and seeing that your rights are protected throughout the process. Someone needs to be sure that the transaction requirements are met on time. In the end, without a license and insurance, you may be in the cold if something is done wrong.

Here are a few of the groups of folks I run into who try to do it on their own:

For sale by owner
The We Buy Home / Subject to Mortgage buyers. Not having a licensed professional in the transaction makes it easier for them to take advantage of the sellers.
Friendly sale between family members or friends.

I can give many examples of horror stories where they tried to be amateur experts and things went south.

My advice to everyone who tells me they are going it on their own, get a professional. If not a REALTOR® than get a good real estate attorney to be sure it is done correctly and your rights are protected.

Posted by Randy L. Prothero - Hawaii REALTOR® on 01/27/2008 05:04 PM

Comments (42)

real estate professional, realtor, fsbo, for sale by owner

Originally posted at: Hawaii Randy's Real Estate Opinions: You Need a Professional to Buy or Sell Real Estate

This post has been included in Hawaii Information Honolulu County, HI Information Mililani, HI Information
Post is included in group: Realtors®

42 Comments on You Need a Professional to Buy or Sell Real Estate

JAN

2008

I think these days everyone thinks they can be a Realtor and that we make sooo much money and do nothing. I hold my clients hand through every step and make sure they are protected. Why do people chance a lawsuit? I loved the story! Thanks!

I agree with you, Randy, as self serving at that may be. Stacy, the problem as I see it is that the bar is set so low by most states and boards that nearly everyone can be a Realtor... just not a good one.

Randy at least he tried to get one from you instead of going to the local office supply store and buy one of the off the shelf Purchase Agreement forms.

Some people just don't realize that saving a few dollars buy not using a Realtor could end up costing them a whole lot more in the end, not to mention that aggravation and sleepless night along with it.

Randy, So true! The problem is that the average person thinks that what we do is so easy and for many of us it is. That's only because it is almost a second nature to us. Realtors are generally worth their weight in gold and it just takes one small error that'll cost someone trying to do it without proper representation a great deal of money to realize this.

Great Post Randy!! You hit the nail !! I agree with you. I deal with a lot of FSBO's and getting them to see this is a pretty tedious chore!! Most of the time I do get them to realize the benefits of using a REALTOR® Thanks for the post!!

Darlene

Randy - as you know a true professional Realtor is worth his or her weight in gold... the value we bring to the table far outweighs the commission. If anything some of us are underpaid for the benefits we provide... not to mention the risks we accept in today's litigious society.

So Randy - my guess is there will be a follow up to this - or at least I hope so, I want to know how you educated this wonderful gentleman

JAN

2008

Stacy - I agree completely.

Don - You make a good point. The bar is too low in many cases.

George- Many times when they realize it, it is too late.

Marc - That is the big problem. Even a small error can be quite expensive.

Darlene - I am sure they are glad that they used your services.

Jesse & Kathy - You are so right. I do not think most people realize the liability involved.

Thesa - Let's see what happens.

One of my favorite parts of working with customers whther they are buyers or sellers is the explaination of the agreements they enter into. Most people are amazed how once translated, they have a better understanding of the document. This comes from years of experience I tell them. Most often they breathe a sigh of relief! Well done Randy!

Good luck and sell well!

I would never give a blank contract out and if they plan on doing a transaction themselves then let them get a contract written by an attorney. Then we have no liability...I believe if a FSBO uses our contract and there is a problem then there could be liability to us especially if our name id on the bottom.

Allison - The contracts are long and confusing to consumers. I am amazed that someone once they look at them, would try it on their own.

Neal - I would never give a contract with my name on the bottom either.

Randy, our purchase offers are like yours, long and involved with various addendums. Our disclosures are pages and pages. I can't even imagine closing a sale without them, especially in this litigious society. And to take your thought one step further, get a Realtor who is LOCAL! My town is incredibly complicated compared to the rest of L.A. and I spend a great deal of time making sure to educate and explain what the buyer or seller needs to know.

Randy,

To the average home buyer or seller on the surface a real estate transaction, including the mortgage process, seems rather simple, but when you go below that surface things will get much more complicated. Most people do need a professional to work with to avoid potentially costly consequences later on.

Randy -- I've had this happen before as well. It's gutsy for someone to walk in off the street and ask for a purchase contract. I suggested he consult his real estate attorney. . .seems he didn't have one and didn't plan on using one. Scary!

Elaine - Excellent point! I am licensed statewide, but would never try to represent people in other counties or sell types of properties that I am not qualified to do professionally.

Esko - If one of the principles thinks they are qualified, what about the person on the other side?

Lori - I remember comments from a a talk radio show guy when speaking to someone who boughtr property without being represented and then had all kinds of problems.

"So this $500,000 home, that was a minor purchase for you right?" Of Course you know the answer. "Don't you think you should have had your interests protected? Why didn't you have someone with a license and insurance review the documents before you signed them? You know it took teams of attorneys to create those forms and I am willing to bet you diod not understand everything you signed."

How about all the signs on the side of the road.... We Buy Homes....and a cell number.

JAN

2008

Sally - Most of them are scams and a lot of desperate sellers have been hurt by them.

Real estate transactions are complex - for us who do it for a living. The novice reads a few books and has it all!

Randy, We are not allowed to give out contracts to anyone. A man came into our office yesterday,told the manager that one of the agents in the office had given him a sales contract...and now he wanted a Sellers Disclosure.He was very rude, didn't want any assistance ,he just wanted what he wanted. Needless to say he didn't get one , and if my Broker figures out who gave him the contract they will be given a "talking to." .

You are so right. Things that appear like money-saving techniques will COST you in the long run. I just hate it has to be a hard lesson to learn.

Anyone can be a Real Estate Salesperson. But, not everyone can be a good one or a profitable one.

Randy,

That is the all time question of the decade? Did you give them a form or not? I think we should do a survey on who gives them a form and what happens and who does not give out a form, what they say and their results. Sometimes, I think that by being the nice guy you win..I would love to see the odds.

It is sad because we see the dangers they are exposing themselves to but do they?

JAN

2008

Gary - The big problem for many doing it themselves is they just do not know what they do not know. They will miss many critical steps or details and will find out later when they are drug into court or worse.

Cait - Especially a problem if that contract had the agent or company's name on it.

Latonia - One bad lesson will cost them big bucks, but it will be too late when they find out.

Kevin - Good points from the public's point of view, very few will be professional. I am sure they are not as concerned about the profitable part. I am of course.

Mary - I am sure a better way to address that is to pose the question to an attorney. I am sure they will give you a list of red flags, especially if the form have your name or company pre-printed oin the forms.

I like the post. Were you able to help him? Did it pay to be at the right place at the right time?

12 pages long? Our average contracts are now about 50 pages!

JAN

2008

Marvin - I have not heard back from him. He may have spoken to another agent in my office.

Margaret - I bet it takes a bit of time to go over them with your clients. It usually takes at least an hour for ours.

Very true-Some people get so involved and wrapped up they forget that this is what we do every day. When you consider how much time & stress they have invested, it might not be worth the hassle.

Michael - Good point

...and I thank you Randy

Great Post.. Luckily here in North Carolina they finally raised the bar on RE professionals. Prior to 2006 you could go to class get a lic and open a company. There were really some disasters out there. Now they make it a littler harder to open your own brokerage. Its amazing that some people think they know enough to purchase or sell real property on their own, and many find out too late that the really needed a professional in their corner. That is especially true here in NC at the new home subdivisions. They attract many buyers without a realtor and once they register they cannot come back and purchase with a realtor (they can use one but the co. will not pay the commission). Many end up with a home that has over 50% of the purchase price in upgrades rather than more quality.The best thing in the world for Realtors is a fully educated buyer. My comapny gives a seminar every month educating buyers and sellers on the requirements for a smooth sale or purchase. Once they see that a GOOD Realtor is constantly on top of deadlines, inspections, addendums, change orders, commitment dates, repair & request agreements, marketing,a correct HUD-1, earnest money protected,pre-drywall, walk-thrus,closing dates and attys, and the list goes on and on. Once the seminar is over finding a GOOD realtor becomes number one priority.

Raymond - Education is always valuable for clients and the agents.

I am sitting here right now with the TV on and being inundated with commercials from a buy owner company. They make it sound so simple that why would anyone need a professional? Just buy the "do it yourself kit" and SAVE ALL THAT MONEY!

We have to do a better job of letting the public know what we do and that our service and professionalism is worth our fee.

FEB

2008

I could lose my license for giving someone forms as far as I know, so I would never do that.

There are some people who are perfectly capable of buying and selling on their own. I truly believe that.

It's like this....I've been doing my own taxes since I was 16 years old. I don't need a CPA to do them for me but I know plenty of people who do need help and would mess up if they did them themselves.

We are here for the ?% of the population that shouldn't/couldn't/wouldn't buy and sell on their own.

Pat - We definitely need to improve on getting information out to the public.

Cheri - It is a large percentage who are not qualified to buyy or sell real estate on their own. Close to 100%. Even if they know the process well they need somneone who knows the contracts and the details, not to mention having insurance in case something goes wrong. If they do not need a real estate agent, they definitely should have an attorney review all documents.

Randy, I agree with you. The people I know that buy and sell their OWN real estate......they have had years of experience doing it. So they know what they are doing. It's one of those things where I say......do not try this at home.....because you are right that most people haven't a clue. I have a relative that thought she knew what she was doing and bought a house and now regrets it and blames everyone but the real person at fault....herself!

Cheri - I know many real estate agents who should never try it on their own also. That is why we have brokers tied to them.

I love this blog.. it is so important for people to realize that buying or selling a house is more than filling in blanks. Great blog!!

Anna - Even filling in the blanks is not so easy.

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