ADVOCATES
NETWORK
Pro Se Real EstateSM
Program
The 12 secrets of Real Estate from the Buyers Perspective.
In many presentations, Advocates Network member attorneys tell prospective
sellers about the 12 secrets of real estate. These ësecretsí
often help sellers decide if saving thousands of dollars through the
Pro Se Real EstateSM
Program is right
for them.
But there can be no sale without a buyer and the simple, straightforward
wisdom behind the Pro Se Real Estate
SM Program
can help buyers as well. These are the 12 secrets of real
estate from the buyerís perspective
The sale of real estate is a legal and public,
not private, event.
When it comes to real estate, the owner is whoever the government says
it is. Unlike buying a ëthingí, like an appliance
or whatever, buying a piece of the face of the earth ñ even a small
piece ñ affects everyone in society. This means that society
ñ through law ñ sets the ground rules for real estate ownership
and transactions. These rules must be followed.
Another point is that solely private ëdealsí regarding real
estate may be agreed by the parties but will not be enforced by law nor respected
by others.
Read, understand and agree with every word
before you sign anything.
The law is clear, when it comes to real estate, if it isnít in writing
and signed by the parties it doesnít count. In
almost every case, saying later that what you signed isnít want you
meant will mean nothing and the words you signed, not your understanding
at the time you signed them are what will prevail.
Another point is that once you sign something, you canít unilaterally
ëunsigní it.
There are two important concepts in marketing real estate Ö
Information and
Efficiency.
This is true regardless
of whether you are selling or buying.
The decision to buy a home is basically a balancing test between what they
buyer wants and can afford and the property being considered.
More information received sooner, rather than later, is always better for
the buyer. For the seller, efficiency is important because they want
as many buyers as possible to consider the essential information needed for
a decision as soon as possible. For example, the situation where
a broker wants a buyer to make an offer on the property and then have the
property inspected is very inefficient. The property is what
it is and the sooner all the information is on the table, the more efficiently
the matching of the right buyer with the right seller can occur.
Brokers trade in information they donít own.
This is neither illegal nor immoral and is what the listing contract calls
on them to do. However, both buyers and sellers need to understand
that as information traders, brokers are not the only source.
Sellers are looking for buyers and buyers are looking for sellers and both
have information the other needs and wants. New technology, such as
the Internet, is allowing substantial improvements in the efficiency in which
information is made available to those who need and will benefit from it.
Brokers create neither buyers nor sellers.
The Telephone Company creates neither the person wanting to make a call
or the person waiting to receive it. Just as the phone company charges
fees based on its control of the medium of exchange when it comes to phone
calls, the brokerage industry charge fees for presenting itself as the medium
of exchange when it comes to information relating to the sale or purchase
of real estate. By analogy, both industries can be seen to actually
reduce the number of calls and sales respectively. People use
the phone because they want to talk to someone but sometimes the cost of
the call is of greater value than what they expect to get from the call.
Likewise, some people might want to sell their house but the 6% commission
to ëconnectí to a buyer might cause them to change their mind.
Both buyers and sellers benefit from less expensive ways to find each other.
The seller wins if the buyer buys his or her home;
the broker wins if the buyer buys any home.
To sellers, this secret has immediate meaning; the importance of selling
only one property. To buyers, the meaning is still important.
While it varies from market to market, there is usually a financial difference
to the broker depending on which home he or she sells. Where another
broker has the listing, the commission must be shared. Brokers will
tend to encourage buyers to consider the homes on which they make the highest
commission first. A home, which might better suit the buyerís,
wants and needs but which pays an individual broker a smaller commission
is not likely to be emphasized. This economic reality of the
middleman tends to restrict information and the efficiency of its exchange.
They donít teach marketing in real estate school.
Right now, in Wisconsin, the definitive work on real estate brokerage is
Wisconsin Real Estate Law by Scott C. Minter and Richard J.
Staff. In its 619 pages, marketing techniques arenít covered
at all. Marketing isnít even mentioned in the index.
For all the technical paperwork and rules, the thing most valuable to the
buyer and the seller ñ the efficient exchange of information ñ
is learned by on the job training.
Easy homes pay for hard homes.
In the world of real estate brokerage, for a variety of reasons largely
outside of the control of the brokers and the parties, some homes are easier
to sell than others. Many factors influence whether it is easy
or hard to get a buyer and seller together. One of the factors
is always price ñ the number that is right for both the buyer and the
seller. If youíre the buyer, that number is easier to
come to if 6% of it isnít going to someone other than the seller.
Every market favors someone.
Sometimes there are more buyers than there are houses to buy; sometimes
itís the other way around. But whatever the situation,
efficiency of communication between buyers and sellers benefits both buyers
and sellers alike.
Serious buyers like serious sellers.
The converse is true as well; serious sellers like serious buyers.
A serious seller is one who expects to fully disclose everything about the
property to qualified buyers, right away and who expects that the sale price
will reasonable and fair to both sides.
Only qualified buyers count.
To a seller this is an important secret. Serious sellers are interested
in buyers who have their financial affairs in order, know what they want
and need and are realistic about a fair price and terms.
But this is an important secret to buyers as well.
This secret is a paradox ñ a seeming contradiction.
The seller must see the home through the buyerís eyes.
But the seller can't see the home through the buyerís eyes ñ
only the buyer can see the home in terms that are meaningful to him or her.
The seller is selling his or her home and the buyer is making a great financial
commitment on what will be his or her home. Each sees the property
through their expectations and life experiences. If the buyer
and seller are both serious and well prepared, and recognize that they are
dealing with more than a building on a piece of land, there is great efficiency
in communications by eliminating the middleman.
