One of the paradoxes posed by our profession is that an agent is not qualified as an expert in legal or financial matters, nor in property condition, yet each of these issues are inherently intertwined in real estate.
It is interesting that if you ask different brokers what the standard is for an agent to help their clients navigate all these possible pitfalls in a transaction, you get a broad range of answers. They range from the more conservative ones who advise their agents not to do too much for fear of liability, to those who do more than they should, at times overstepping their level of expertise.
A responsible and proactive agent walks the line between these two extremes. And depending on the situation, their role can take on the shape of an investigator, a concierge, and an advocate. They rely on a pool of trusted resources to help quantify what challenges face the parties, and once the issues are identified, they help facilitate a positive resolution that is both informed and feasible for both sides.
I like to treat the process as a collaboration between the parties, where the objective is a result that makes sense to everyone after considering all the factors involved. This can be a challenge when a seller or listing agent may not have been forthcoming or even aware of an issue that may come up, and how you present new information can have a lot to do with whether you are able to get the parties to agree on a path forward.
Along the way, a proper due diligence involves multiple site visits, and making the rounds with the appropriate agencies and experts to help ensure that no stone is left unturned. And you are likely to bump into a proactive agent at the usual places where public records are kept and where policies are discussed.
Even if it’s unpleasant news, ethics and common sense dictate that it is better to have things out in the open before a property changes hands. This helps ensure that the buyers don’t end up overpaying or getting in over their heads, and that any lingering liability can be addressed for the seller’s benefit as well, so they can move on with a clean slate.
Having said that, you would think that the standard would be to welcome the buyer and their agent to conduct vigorous due diligence. And yet, we continue to see situations where all contingencies are waived up front and buyers rely solely on the disclosure set that was provided by the seller and their agent in the interest of being selected over competing offers.
I generally encourage at least an abbreviated timeframe of as little as 72 hours for the buyer and their agent to have the opportunity to double check the disclosures that were provided and do their own research with the applicable agencies and experts before removing their rights to cancel. And since the standard purchase contract provides this same timeframe for the buyer to get their deposit into escrow, there really isn’t much tradeoff for the increased peace of mind.
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