A few weeks ago, in an earlier issue of this column, I elaborated at some length and detail on the purpose and intent of this literary exercise -- that being to assist in your abodefication and enabling the consumer to become conversant, acquainted and well prepared in all areas and aspects of the home ownership process.
Initially, many make the decision to purchase or sell unprepared, totally unaware of the complexities of the issues and details of a process that has the potential to consume, dictate and in some instances tyrannize unnecessarily. For most, the acquisition or disposition of a home is the largest financial transaction of one's life.
Yet the desire to be informed and prepared prior to engaging in the process is often lacking and baffles me. Why is this?
We're talking money here, big money in most cases, but the approach is often nonchalant and the attitude is often equivalent to buying a suit off the rack when what's needed is a custom-tailored one individually tailored to suit your purpose. To a degree ,this is what I'm going to do here. Basically, turn the cuffs, shorten the sleeves and roll a few lapels.
Rather than attempt to cover the plethora of scenarios that could arise, I'll utilizing a broad brush in demonstrating and preparing a background to apply the fundamentals expressed. Each real estate transaction will exhibit unique characteristics and subtle nuances that require careful deliberation.
Differences of opinion and perspective will inevitably and naturally occur between buyer and seller, thus necessitating and reinforcing the need for the services of a Realtor, who has knowledge and resources available to guide and assist in sorting out the contortions and permutations that evolve many times out of nowhere and frequently over minor issues.
One of the most common sources of these differences is miscommunication. One party assumes they understood what the other intended, resulting in someone re-familiarizing themselves with the first three letters of the word assume. A game of he-said-she-said ensues. Then off come the gloves, and a knock-down drag-out let's-get-it-on battle commences, resulting and concluding in a winner-takes-nothing victory.
This occurs when either party fails, as the following example demonstrates, to adhere to the elementary rules of our legal system, which is the central point of this knowledge exercise.
After weeks, perhaps months, of homework, continually perusing the Internet, drive-byes and showings, along with a steady flow of e-mails, faxes, late-night conversations, voicemails to and from your agent, followed by hours of debating the merits and demerits of countless homes, dissing those considered inferior over the most miniscule of flaws, you finally contact your agent and ask him to violate one of the golden rules of real estate -- you want him make a verbal offer. Why? After all this precision-tuning research, why would you jeopardize tens of thousands of dollars by engaging in a procedure that subjects all parties to an inflammatory game of "That's not what I heard you say at all?"
For the dim of wit: written contract good, verbal contract bad. Can you guess which one is and isn't enforceable in a court of law? And which one allows for the fewest errors and misinterpretations?
Often our goal in life is to pursue the path of least resistance, the objective being "How can I get from point A to point B as quickly, conveniently and with the least amount of effort and resistance?" Acceptable theory in undergraduate school perhaps, but when it comes to homeownership it wont make the grade. It's the equivalent of cutting class and showing up for the final.
In all likelihood, it's because the inner workings of the process are not high on the list. The "need to know" kicks in only when you have to know -- usually, just prior to making a move.
This situation is one of the prominent causes of failed negotiations. Fallout and obfuscations are easily avoided if you simply write it down -- thus eliminating, wherever possible, the margin for bungling gaffes.
The causes of this casual behavior are many and fodder for Freudian interpretations. My point, however, is elementary and leads off a series of articles to come on contracts: What do they mean? How do they work? And, as this column begins to discuss, why do we need them?
To begin with, our society is an increasing amalgam of laws, rules and regulations designed to, in this case, facilitate the transfer of tangible property. A simple theory and concept to grasp, but one that in practice has spawned a cornucopia of massive documents elaborating on, or attempting to, specify the processes involved in transferring a physical entity from one party to another. The intent is to standardize with specific language the rights, obligations and responsibilities of all whom are affected.
Our legal system is complex, constantly evolving and subject to interpretation and re-interpretation. While its purpose is pure, often the conclusions are tainted with unexpected and potentially contradictory objectives that require even more legalistic word crafting.
Contracts and documentation rule. They're the magnum opus of real estate often neglected, overlooked and relegated to the end of the bench, ignored until the exact moment they're needed. Then, like cramming for a final exam the next day, you and your agent embark on a crash course in Contracts 101. Suddenly, that old familiar college mantra of "Why did I wait so long to learn about this?" echoes once again.
Fear no more the dark netherworld of contractual nescience. Learn about the purpose, form and substance of real estate contracts by reading subsequent issues of "Homework," which will break down for you chapter and verse what it all means.
Next week: Contracts No. 2.
STEVEN J. LOWENSTEIN, a native of Cincinnati, is a Realtor with Coletta & Associates Realtors. He's a graduate of the University of Cincinnati and holds a Master's degree from North Texas State University.
