Buying Real Estate Out of Sync Can Hurt More Than It Helps

There's so much to share in this post but I do not want to offend anyone, especially buyers of real estate. Read this experience of what and what not to do, hopefully your home buying experience will be better than this family. **This is LONG but I promise you it will be well worth the read.

I understand that there are many real estate agents/ brokers and brokerages to choose from. I know every salesperson/ broker talks about how great s/he is in selling real estate. On top of that, they are each professional, have great customer service, etc. right? So, how do you differentiate one versus another? You really cant until you experience it. Until you make that phone call, you will only watch from the sidelines.

A family contacted me recently about buying a home in Frisco TX. They selected me because I was knowledgeable about Frisco TX, I know every street in the city, schools, neighborhoods, etc. After looking several times, we pin point one particular house - a foreclosure. Typically the homes range around $350-$450K and this foreclosure was priced at $315K. It was a "steal" to begin with. I knew that but the buyers don't.

So, in order to translate what I know in my head, I had to show in stats and sold comps. Not a problem.

Walking around a foreclosure can be an experience in itself. Some foreclosures are dumps, some are "not that bad" while others can be pretty good. This one we stepped into was between "pretty good" and "not that bad". It has some cosmetic issues like scarfed marks on walls from dirty hands, dirty shoes, the hand-scraped hardwood floors could use a polish and 2 rooms needed carpet change. In my opinion, there's nothing BAD about this house. Plus its price well-below market, it wouldn't last long so I mentioned it to the buyers.

FLAG 1: Buyers with no trust only thinks you are pushing for a sale.

While walking the property, there was some small separation between the soil and foundation. But not large enough to say it **may have foundation problems. I explained to the buyers the signs and clues of foundation trouble. There must be "several" clues for it to happen. Simply because the soil is separated from the foundation in itself may be the first clue. However, there should be other "warning" signs such as cracks on the bricks, interior cracks, door sticking, windows not able to open, separation of soffit trims, etc. So, I explained this to the buyers while I tell them that I'm NOT a foundation expert, that we can and should hire a foundation expert.

Every the buyers walk the house (3 times up to this point), they insisted something is very wrong with the house YET they showed alot of interests. As they gathered their "estimates" to fix things around the house, they came up with a $25-$35K just for cosmetics stuff, not including "foundation" problems - if it requires it.

The $25-$35K is way OUT OF LINE. I'm not sure where they got the number from, but clearly - it was blown out of proportion. But who's to say that's NOT TYPICAL of SOME BUYERS?

So, after several rounds of home visits, we are finally ready to talk about possibly writing the offer. I explained the similarities and differences between buying from a regular individual versus a bank foreclosure. We spent over an hour. Then, the next day another hour going through the contract addenda and procedures.

Several days had passed and the system still showed it's still available for sale.

During the phone conversation, I felt hesitation from the buyer for the fear of FOUNDATION PROBLEM. Here in the North Texas area, settling and soil movement can be common in our clay soil. Clay soil has been known to expand and contract like a sponge. During the heat of Summer, due to lack of water, it can contract and in the Winter, it can swell. During the 2 extreme seasons, it's not uncommon for the house to shift 1in either way.

Plus my civil engineering, soils mechanics class taught me quite a bit about SOIL and its STRENGTH and my previous foundation repairs made me not fear FOUNDATION ISSUES and the NEED TO REPAIR.

Many buyers who are NOT FAMILIAR with the process can get really worked up about it.

In one of our phone conversations, I explained the step-by-step process of how we write the offer, then hire the inspector and move on to finalizing the loan process. I can feel the hesitation to follow this tried-and-true process. Buyers are afraid they get stuck with the lemon despite me telling them, pointing it out in the contract that there is an inspection period and that the buyers can walk away from it, not losing their earnest money.

So, after explanations, it still seemed that the buyers didn't trust what I had to share. I can understand that. After all, I'm just a sales person and at the end, if they bought a lemon, they are stuck with it. I'm out of the picture.

 

The phone call came again about seeing the house for the final time before moving onto the next step. They want their UNCLE to see it because the UNCLE has recently just bought a house. He has more "experience" they can count on. We met at the house and I saw a truck that said XXXX REMODELING and HOME INSPECTION.

I guess we were doing a pre-offer home inspection that I didn't know about. I kept quiet the whole time because I knew I was lied to. The buyer mentioned how the UNCLE is late because he was stuck in traffic. It's Noon and there's not traffic jam to speak of - I knew that too.

After 1 1/2 hours of pre-offer home inspection, they were ready to wrap it up. I had to know how BAD the DAMAGE is. I want to test my own judgment and evaluation of the home. After being lied to for the reason of showing up, the least I want was a few more minutes.

Sure enough, there was no foundation problems. Even the exterior mortar cracks at the bay window was just workmanship. The "patch" on the garage floor was oil, like I had pointed, not water leak from the exterior.

I understand that I'm just a sales person and my opinion may carry no weight.

So, it's now time to write an offer. The bank wanted the buyers to be pre-qualified by their institution. Again, we talked for over an hour about the process. 2 days later, I checked in with the buyer - the buyer said that the bank accepted an offer.

1 week and many, many lies, distrust later, no house. And the whole buying process went wrong.

We don't buy houses out of sync. We always submit an offer if we are interested first before all else. Make sure we buy the house for the price we want to pay. You wouldn't do an inspection or even a pre-offer inspection first because even if the house is in *perfect condition, it may not be the price you want.

I think the worst part is the distrust that goes on. If you cant work with someone you trust, why be in a relationship with one?

 

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Buying Real Estate Out of Sync Can Hurt More Than It Helps