It’s not always easy in real estate, always doesn’t go as planned, so we want to talk a little bit about when it doesn’t in a real estate transaction.
Featuring:
Bob Nelson, Eugene real estate investment broker
Marcia Edwards, Eugene residential real estate broker
Bob Nelson: It will happen periodically. In fact, the less you know about real estate, the more often that happens. Real estate is almost an art form. It starts with a negotiation process through understanding fixers of the property, what could go wrong, what to watch for, and so forth.
Marcia Edwards: The biggest hint I can give you is get a good realtor to flank you who’s done this before with similar properties to what you’re seeking or what you’re selling.
Bob Nelson: Have expertise on your side. It always counts.
Marcia Edwards: Let’s say-
Bob Nelson: And costs no more, by the way.
Marcia Edwards: That’s a good point. Yes, so have someone who’s done it before next to you. We’re going to go into due diligence, so due diligence is you’ve had a meeting of the minds in regards to terms that you anticipate to close the sale with, and now, you’re going to understand what the purchase is about, what the as is condition is in regards to the property on site as well as the condition of the title.
Bob Nelson: Well, there’s so many things to look at. If it’s an income property, there’s another dimension of issue, but let’s stick with single family residential for right now.
Marcia Edwards: I like single family residential. Let’s do that.
Bob Nelson: I like it, Marcia. Let’s go for it.
Marcia Edwards: In about two weeks’ time, you’re going to have to make sure you’ve done all the investigating you want and need in order to feel confident proceeding with the terms you’ve negotiated, but let’s say you have been negotiating and you realize you’ve got an old furnace and a roof that’s just got about a year left of life remaining. What do you do then?
Bob Nelson: Well, go back to the drawing board because that’s probably not what the buyer had in mind when the buyer made the offer. Now, certainly, they’d be able to look at the roof and tell it is an old roof. They can’t look at the furnace from the outside. The only way they’re going to be able to know that is to bring in an expertise that has knowledge of the furnace, the heating system itself. Can it be fixed? Can it be renovated? Does it need to be replaced? All those cost money.
Marcia Edwards: That’s right. The steps and the process in transaction is you’re pending sale, you have an inspector, possibly a whole house inspector come onto the property, take a look, and generally check all the condition of all the fixtures, appliances systems of the house. They say, “Oh, there’s something wrong with the roof. There’s something wrong with the furnace. It’s old. It’s going to die.” So, now, you’ve got to understand more closely what that means. Go to the experts, the roof or the furnace expert, and get their take on what it would cost to either repair or replace. To start the conversation with the seller with all that bases will make you stronger in your negotiating. More on negotiations next program.
Join Eugene, Oregon, real estate experts: Bob Nelson, Real Estate Investment Broker with Pacwest Real Estate Investments, and Marcia Edwards, Residential Real Estate Broker with Windermere Real Estate, daily at 5:30 on KPNW for the “Real Estate Today” radio show.
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