Navigating the Unexpected In Real Estate Transactions!

Navigating the real estate market can be exciting, especially when you come across a potential dream home.  In Virginia, there's an interesting twist called Dual Agency that might catch your attention.

So, what exactly is Dual Agency?  Well it's when a Realtor represents both the buyer and seller in the same transaction!  Imagine you're a buyer, exploring homes on platforms like Zillow or Realtor.com.  You find a few promising homes, attend open houses, and maybe even reach out directly to the listing agent.  You meet the Realtor, click with them, fall in love with a house, and decide you want them to handle your offer and represent you in the deal.  Sounds convenient, right?

But here's the catch:  In any real estate transaction, the buyer and seller often have conflicting goals.  The seller aims for the highest price and favorable terms, while the buyer typically seeks the lowest price and the best terms for themselves.  This creates a dilemma for an agent representing both parties.

While some buyers hope that working with the same Realtor as the seller might lead to a commission cut and a better deal, it's crucial to understand that the commission is typically pre-negotiated between the Seller and the Realtor's brokerage.  There's no guarantee that the Realtor or their brokerage will be willing to cut the commission to benefit the buyer.

It's essential for both buyers and sellers to remember that getting an offer accepted is just the first step in the complex process of buying or selling a home.  Many unforeseen challenges can arise in the 30 to 60 day window of a real estate transaction, so it's vital to proceed with caution and clarity, especially when considering Dual Agency!

So one of the things that I (and probably most Realtors I know) love about real estate is - there are no two days that are alike - no two transactions that are alike!  Most transactions go smoothly - you can't believe you are at the closing table and the transaction has been smooth as can be!  But - there are other transactions that don't go quite so smoothly!  And, you hope that your transaction will fall into the smooth category, but when it doesn't, you don't want to wonder who is representing you in the transaction!

So let's explore some of the things that can happen in a real estate transaction!

• What happens when a buyer decides to change their mind?  This is called Buyers Remorse!  A buyer decided that your house just wasn't the one!  In our area, there are a couple of ways to get out of the transaction - a bad home inspection, a review of the HOA documents, doing something to make their loan get denied, the buyer found another house they liked better!  If the Realtor in the transaction is representing both sides, how do you think they would handle this situation?

• What happens when a seller changes their mind?  It does happen!  If the Realtor in the transaction is representing both sides, how do you think they would handle this situation?

• What happens if the seller doesn't complete the repairs or completes them incorrectly?  A seller has agreed to do certain repairs, but what happens if they decide to do the repairs themselves, rather than hiring in licensed and competent contractors?  Or the seller decides to not do the repairs but to cover up the defect!  I once had a seller actually move insulation in the attic from one side to the other, hoping that the buyer was not going to notice that they had not corrected the insulation defect in the house!  If the Realtor in the transaction is handling both sides, how do you think they would handle this situation?

• What happens if the appraisal comes in low?  Most buyers that are getting a loan will be required to have an appraisal done on the house - but what happens when the appraisal comes in below the purchase price?  Should you try to push to appeal the appraisal to see if you can get a higher value, or do you try to get the seller to reduce the price?  If the Realtor in the transaction is handling both sides, how do you think they would handle this situation?

• What happens if the lender can't meet the deadline?  In our area, most contracts have language that allows the closing to be extended as long as all parties are making diligent efforts to get the transaction to closing!  But how long should it take to get everything resolved so that the transaction can close?  Should the buyer look to get another lender?  What are the reasons why the loan is not closing on time? Should the seller think about terminating the transaction and getting the house back on the market?  If the Realtor in this transaction is handling both sides, how do you think they would handle this situation?

• What happens if the buyer has a house to sell in order to close on the house they are buying BUT it has not been disclosed to the seller?  The contract makes no mention of it, the lendere's pre approval letter makes no mention of it - and what if the house the buyer currently owns does not close in time to close on the house they want to buy?  If the Realtor in this transaction is handling both sides, how do you think they would handle this situation?

• What happens if the house was previously under contract and is now back on the market due to defects found during the previous inspection?  Virginia is buyer beware, meaning it is up to the buyer to do any and all due diligence on the house!  If there are defects that were found in a previous inspection that the seller chose not to repair, then the agent is required, by law, to disclose those to any future buyers/agents!  But how would you know?  If the Realtor in this transaction is handling both sides, how do you think they would handle this situation?

• What happens if the buyer decides to buy a new car or furniture before closing?  If debt to income ratios for the buyer are high, buying a new car or new furniture or opening a new credit card can through the ratios out of whack and cause a buyer to be declined by the lender!  If the Realtor in this transaction is handling both sides, how do you think they would handle this situation?

•  What happens if the seller removes items from the house that the buyer thought were conveying with the property?  I once had a seller who agreed to convey the refrigerator that was in the house!  However, before closing, they went out and got a much cheaper refrigerator and replaced their nice, upgraded refrigerator with the cheaper refrigerator they bought at a scratch and dent store!  They tried to say that the nice, upgraded refrigerator had broke and they were just replacing the refrigerator since they had agreed to convey a refrigerator to the buyers!  If the Realtor in this transaction is handling both sides, how do you think they would handle this situation?

•  What happens if the buyer, at the walk through, is unsatisfied with the condition of the home?  Perhaps they don't like how the repairs were completed, perhaps the seller damaged the property when they moved out, perhaps the home was not in "broom clean" condition, perhaps there is a lot of trash left behind, perhaps an appliance is no longer working!  A buyer not satisfied with the condition of the house at walk through can cause a delay to the closing!  If the Realtor in this transaction is handling both sides, how do you think they would handle this situation?

As you can see, there are a lot of things that can go wrong between the time a contract is accepted and the time you are sitting at the closing table!  Having a Realtor who is representing YOU AND YOUR INTERESTS ONLY is one way (and I think the best way) to navigate through the unexpected in real estate transactions!  

If you have questions or are thinking of buying a home or selling your current home, feel free to get in touch and let's chat!