Everything in Real Estate is Negotiable

Everything in Real Estate is Negotiable!

Everything in real estate is negotiable. I have heard this saying all my life, even before working in real estate. It is true – I suppose. If you want to include personal property like your Van Gogh painting with the house, it can be negotiated.

As it turns out each area of the country has its own quirks on what is normal or customary in contracts and negotiations. In southern California sellers usually buy a title insurance policy for the buyer to insure that the buyer has free and clear title (the buyer purchases a secondary policy for the lender), but in the east that is not the case. I flew back to Boston a few years ago to help my daughter purchase a condo. I was flabbergasted to find that the normal for Boston did not include a seller's title policy unless the buyer wanted to buy her own. At my daughter's closing there were two attorneys present but no agents. The attorneys were gabbing and overlooked mistakes in the buyer's settlement statement. In California the attorneys write the generic DRE contract but Realtors are allowed to fill in the contracts and no attorneys are involved unless the principles request them. In Colorado we had table funding and closings but in CA we use escrow companies and only receive a phone call at recording.

When I sold real estate in Colorado, water rights, wells and septic systems were super important. Not so much in the OC. In Colorado the time frames associated with due diligence ended at midnight on the date specified in the contract. Presently in California, the time frames continue to extend beyond the original date until the buyer proactively removes them with a “contingency removal form”. In some states the closing date actually means the closing date and a buyer can lose the deal if they don't close on time. In CA the closings seem sometimes to be on “beach time”, all depending on how many refinances the lender is currently processing. In some countries all real estate deals are CASH. By the way right now in the OC 30% of all deals are cash buyers.

In central California the same DRE contract is used but different “norms” apply. Even in the OC some things swing back in forth with the type of market we are experiencing. When it is a buyer's market the buyers will ask sellers to pay for HOA docs and transfer fees. When the market swings back to a seller's market these fees seem to go to 50/50 or buyer paid. When buyers are exposed to lots of short sales the buyers get used to the fact that banks rarely honor any repair requests.

I am in favor of following the norm most of the time because Realtors and principles are comfortable with the norm and things go more smoothly. That being said creativity can get you a deal or keep a deal in play.

Ron Buck, Keller Williams Realty

dre 01364665

949-364-0400