Real Estate 101
Marsha, I am seriously considering getting a real estate license. Can you give me an idea of what I’m getting into?
Congratulations! You have chosen an interesting, fun and vital career. Real estate moves our economy on many levels. A good metaphor for real estate is a theater performance. We all enjoy a good play, and real estate agents have a special seat in the balcony. A real estate transaction is a drama, a comedy, a melodrama and even a touch of the absurd. Agents perform as directors, stage hands and sometimes unwilling participants.
Let’s consider a home purchase. The opening act begins with the agent showing the buyer current homes on the market. The worst that can happen is when the buyer falls in love with the first home shown to her. “I love it, love it, love it,” she exclaims. “I don’t want to view any more houses.” “But we have six more homes scheduled.” “Cancel the appointments,” she states, “this is the one.” Then she says those words you never want to hear, “this is going to be the easiest sale you ever had!”
While the buyer is raving about the character and perfection of the home, her realtor is looking beneath the charisma. What does the musty smell mean, why is there a crack in the wall and what is that stain on the ceiling? At some point these observations will become relevant.
Once a contract has been formed, the second act begins. The shine is beginning to come off the home for the buyer. A home inspector is hired. Hours are spent at the house “I’d get a mold inspection,” he sniffs. “I wonder if that’s asbestos?” he asks. “That crack could mean foundation problems,” he adds.
During Act Two other complications can arise. The house must appraise at the negotiated price. Will the home appraise when the house next door sold for less money two months ago? While the buyer and seller are discussing the physical inspection and needed repairs, the agents are anxious about the buyer’s loan.
Finally Act Two is drawing to a close. The home appraised, the buyer has conditional loan approval and the seller agreed to reasonable repairs. The agent relaxes; the contract will close in two days.
Suddenly the buyer’s agent receives a call from the bank. The buyer is shopping for a new car. The lender states if the buyer takes on any more debt she won’t qualify for the home loan. The agent frantically calls the buyer. Wait to purchase the Mercedes!
Act three is the denouement. The loan is funded and the new owner cheerfully receives the keys to her new home. The agent smiles when the buyer turns to her and says “I told you it would be the easiest sale you ever had.” Real estate is one of the most rewarding professions around. I look forward to working with you.
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