Oakland Real Estate News

Preventing Transaction Horror Stories

May 4th, 2016 2:42 PM by Harold Thomas Jr.

Some Real Estate deals can end up being complete nightmares, with villains and all! That is why you should always be doing your homework and taking notes (not necessarily literally but maybe in some cases). Real estate transactions require the right kind of effort from all parties, and if one party drops the ball, all can suffer. If you are a party to one of these transactions consider some of the following preventative care.

Create a Transaction Model

Outlining/Summarizing the transaction from beginning to end on paper may seem unnecessary but can be helpful for any party wanting to better understand the transaction. By doing this you are able to see each party's involvement and responsibility, time/deadlines for completion, your personal responsibilities and more. With a model in place you are also able to be more thorough in noticing potential problems before they arise. This totally makes sense for the first time home buyer/seller. As a realtor I try to knock out as much paperwork/signing as possible on any given day from the beginning. This let's me complete my file quickly and helps me to easily run through my checklist.

Create a specific digital folder for your transaction

I don't need to tell anyone how much it sucks to have to search your email, desk drawer or other location for pertinent documents or files. Well it can be worse in a real estate transaction. With deadlines in place once an offer has been accepted and you are in contract it makes the most sense to have all emails,scans and other docs in a central location for easy access. Creating one place for your tangible paperwork should already be a norm but another for your digital files is almost a necessity. I have found that utilizing apps such as Dropbox, Office 365 and even Microsoft Outlook etc. to create transaction specific folders has been a huge help that most realtors now take advantage of. With these tools in place you can conduct most of your transaction directly from your smartphone or tablet. In addition to that your files are shared across different devices making it easy to utilize a printer or scanner that is only connected to a specific one for example. There are many advantages to these applications.

Keep People In The Loop

As professionals routine knowledge and information can sometimes seem minimal and/or a "given". But being reluctant to share it can sometimes result in problems in a transaction. It is very important to keep necessary parties in the loop of what is going on with the deal and any new occurrences or situations. The seemingly smallest left out detail can kill a deal or weaken a buyer/seller's position usually costing them money in the long run. Keeping lines of communication open is important. If you have a question don't be afraid to ask it because getting the answer may prevent headaches. Be sure to include all necessary parties in emails by putting their email addresses in the "To:" field as opposed to the "cc" or "bcc" fields. This prevents your recipients from accidentally getting emails in their spam or junk mail. You don't want to take chances. Email and even text messaging is good because it creates a time stamped trail which prevents confusion and disagreements. Buyers and sellers as well as realtors, lenders, appraisers, escrow officers, inspectors etc. all have a responsibility to share information with proper parties. It is best if these parties build lines of the best ways of communication at their introduction to prevent one from having to chase the other down for anything.  

Create a transaction savings

Most people feel as if they are financially prepared for a real estate transaction when they decide to get into one. Many times buyers save just enough (they feel) to be able to close, and follow their lenders orders for how much (the lender said)  to have at least come that desired day. The truth is most times the amount a buyer will need is more than what was quoted initially. Keep in mind that as a buyer you don't normally pay any commissions to your realtor. But when you factor in costs along the yellow brick road to the closing table it can make you scratch your head. In Oakland, to make things worse, a home must have an inspected and cleared Sewer Lateral with clearance certification upon transfer which usually starts at around $4200 to complete. In a Seller's Market such as this one this cost is almost always transferred to the buyer unless negotiated otherwise.  With this, the appraisal, inspections, closing costs and other miscellaneous expenses that can come up it's better to be prepared (and it's never too late to start). Consider putting away some of your disposable income each pay period before and throughout your transaction to help with these costs. It's always better to have been prepared for some of these expenses as opposed to being hit with them right away with a deadline. Even if you are getting down payment assistance it is best to be prepared for out of pocket costs before and at closing. 

Sellers can consider doing this too. The sewer lateral issue needs to be negotiated early and is most times done prior to closing. With that in mind sellers should have its completion as a possible playing card for negotiation, keeping in mind that they don't get paid until closing. It can sweeten the deal a little to put your home on the market with an already completed sewer lateral or getting that sod job by the back porch. Sellers are getting more for their homes when there is less to do for the buyer. Smart sellers start the savings process early and get repairs and possible upgrades over time and then decide to sell after enjoying their updated home some. 

Basically with all of that being said it is best to be very well prepared and organized in your transaction which usually means taking it to the next level and maintaining professionalism whether you are the client or the professional at work. None of us are able to predict what will happen in the future. But we can choose to learn from others mistakes before making them ourselves. Stay aware, prepared and organized. 








Posted by Harold Thomas Jr. on May 4th, 2016 2:42 PM

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