Story Time: Experience Does Matter

http://www.dreamstime.com/-image9212780I have been helping buyers and sellers in Northern Virginia for over 25 years.  During that time, I have seen many crazy twists and turns in real estate transactions. Still, I have not seen everything.  There is always some new angle that I have not encountered but most “surprises” I see coming and make sure my clients are prepared.   Or more often than not,  I sidestep trouble without them even knowing they were in danger.

Think about airline travel.  Almost 100% of the time when you take off from Washington DC to Seattle, you will arrive safely in Seattle.  And almost 100% of the time you enter a contract to buy or sell a property you will get to settlement.  But is an airline trip or a settlement journey always a straight line?  Almost never.  It is pretty hard to fly from Washington DC to Seattle without having to fly a little north, south, east, west, faster or slower  to avoid turbulence. And in a real estate transaction, there are countless unexpected rough patches that can crop up.

Who do you want your pilot to be?  A seasoned veteran who can spot the turbulence ahead and divert the plane so that the passengers do not even know it exists or experience only minor bumps along the way?.  Or do you want the new pilot who is surprised by the sudden change in condition and takes the the plane right into the choppy air?   Sure, he will get you to Seattle but you’ll be a bit queasy when you deplane.

Or what about those rare situations when there is engine trouble or no way around the weather?   Would you rather have the an experienced pilot who recognizes the situation and returns to DC before it is too late or the inexperienced pilot who tries to push through it and crashes the plane?

After all these years, I can clearly see the trouble ahead.  I also have a great gut feel for the other side of the transaction.  I can sense when a particular agent or buyer or seller is flying recklessly or is inexperienced and endangering our flight plan.

Let me give you some real life examples of what I mean.  The names, dates and locations have been changed for privacy reasons but the situations are real.

 

I LOVE THIS PLACE.  THE HARDWOODS MAKE IT SHINE!

Yes, those gleaming hardwood floors sure did look great.  Monica had been looking for several months for the perfect condo.  Here we were in a top floor unit in Reston VA backing to beautiful parkland with huge windows letting in lots of light.  I knew she loved it and wanted to make an offer.  Not so fast.  Let’s talk about these floors. Walking on hardwoods is quite a bit louder than walking on carpet so almost all garden style condos restrict hardwood floors on the upper level units.  I suggested to Monica that we contact the condo before writing to make sure a) that hardwoods are allowed  and b) if they are, to determine if there are area rug coverage requirements.

No one inspects your condo for violations on an ongoing basis and there is no way the condo management would know this unit had hardwoods unless they were approved or a neighbor below complained.  But and a big BUT, condos are inspected on transfer by the condo association and then they will see the hardwoods. That could be a problem.  I asked Monica if she would still want this place if either she had to completely carpet the floors or cover a significant part with area rugs.  Before writing she called the condo to find out their policy which allowed hardwoods but required 80% floor coverage.  She decided to move forward.   Had I not known about this potential problem and it cropped up for the first time when she received the condo docs 2 or 3 weeks later, she may have been very disappointed after thinking about those floors for weeks.

An experienced agent can see trouble coming and properly set expectations

SOMETIMES JUST BEING OLD  HELPS

David and Liz fell in love with the charming old cape in the heart of the City of Falls Church.  But it was a hot market and there would likely be multiple offers.  I suggested several ideas on  how to structure the contract and we submitted along with 3 others.  Two of the others were not as strong as ours but according to the listing agent, ours and one other were exactly the same.  Same price, same settlement date, same downpayment and so on.  They decided to go with ours vs the other.  Why?  Because they could tell by my Realtor ID number that I had been around much longer than the other Realtor.  Getting to settlement on a timely basis was very important for the seller and they felt an experienced agent would be better able to handle any twists and turns in the transaction.

Now, many agents (me included) will look up the production of the agent on the other side of the transaction.  I not only want to know how long they have been in business but whether they are really active, producing agents.   Even if it is not a multiple situation, knowing this info can help me in how I approach the transaction.

My various negotiating strategies are not for publication in a public blog but there are different approaches one takes with a new agent, those on a large team and those that seem most interested in racking up large numbers of transactions.   Each has a different perspective on the transaction.  Some agents take the transaction very personally and are overly protective of their clients and others look at it as  a straight business deal – just the facts please.   Some agents have all the time in the world to work through minute details.  Others are so busy they just want to get it done in the easiest manner possible.  Knowing how to talk with the other side will put my client in a better position to succeed and get a better deal.

P.S. You can look up how long an agent has been licensed and if they have ever been disciplined by the state licensing agency by clicking here. Click the license lookup section.

SO YOU ARE BEHIND IN YOUR TAX FILINGS?

Hey we are all busy.  Maybe the beginning of the year was particularly hectic and with April 15 approaching you realize you won’t have time to file your taxes.  Yes, you could file an extension but you don’t owe anything and are expecting a refund so you put it off.   Stuff happens.

Gary had lots of stuff happen – discharge from the military, job relocations, divorce, etc.    He was 3 years behind in filing.

We had just ratified a contract an a great townhome in Centreville VA.  He had great credit and a great salary.  It was easy for the well respected local lender to write a pre-approval letter.  The loan looked like a slam dunk.  As we were innocently discussing the loan process, he casually mentioned that getting together all of this paperwork would help as he was just getting ready to file his taxes for the last two years.  The loan process would cause him to gather together the last bit of paperwork to complete those taxes.

“Whoa,” I said.   “Time out.  Back up again and explain the tax thing to me again.”  I was thinking it was time to take the plane back to DC as this was heading for a crash landing if we kept moving forward.

Since the mortgage meltdown a few years back one additional piece of documentation almost always requested by lenders is a copy of your tax returns for the last 2 years.   Before the mortgage meltdown, there were no doc loans frequently referred to as “liar loans.”  People would list their occupation and their salary and no verification would be needed if the salary was “somewhere” in the range of what folks in that occupation made.  Now it needs to be verified with pay stubs and tax returns.  Loan applicants sign a form authorizing the lender to have the IRS send them tax transcripts from the last 2 years.  That is pretty hard to secure if the taxes have not been filed.  Furthermore, even if Gary filed immediately,  it takes bout 30 to 60 days for the return to make it’s way through the system so the transcripts can be secured.  I thought the transaction was dead and told Gary we had a major problem.

But this turned out to be a case where I headed off a problem and learned something new.

Gary was applying for a VA loan. The VA loan guidelines do not require tax returns for those who receive a w-2.  They do  for self employed individuals.  Gary received a w-2 so I was breathing a little easier.

However, the VA does require proof that the taxes for the last 2 years were filed.  I told Gary this and he said this was not a problem.  He just needed a few finishing touches and they could be filed.  Getting closer.

But then Gary’s lender said that even though the VA does not require tax transcripts, their company does for every loan.  Ouch.

We found another lender that just follows the VA guidelines and got the loan switched.

Had we not gone through that exercise at the beginning, we would have been blindsided midway through the transaction and would have needed to extend settlement while we found a new lender or the seller would have been so upset and nervous that the deal would have died.

I could go on and on with various othere examples.  Many times, nothing goes wrong in a transaction and new or old, the agent gets it to settlement without an issue.  But the problem is you never know which transactions are the easy ones.

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