As a “baby boomer” I watched a lot of goofy TV and I loved “Lets Make A Deal” where people were confronted with making offers on stuff they wanted or taking a chance for something uncertain but maybe even better hidden behind a glorified garage door. But buying real estate should be different. The process is highly controlled by the state government and lots of protections for the buyer are provided. But that doesn’t make it easy or stressless. I also had a real-estate agent on my side.
Agent 007 is a “shirtsleeve relative” since her nephew is married to my niece. We have bonded through the search process. The Jersey Girl has bonded with her, too, through their mutual love of horses. I trust her. But at the same time I realize her motivation (a commission) is not the same as mine (the best property for the best price.) I want a low price, she wants a closed deal at any price. But through our process I have gotten the feeling that she won’t steer me wrong. We signed an agreement that made her my agent, which puts the burden on her shoulders of a duty to represent me as the buyer and look out for my interests. In return I guaranteed that she would be paid appropriately and that I would not work with any other agents. I believe that a good agent is worth the commission they earn, and Agent 007 proved she is good and worth every cent.
We agreed that the asking price was too high. The good thing is that these days so much information is available online. You can see past transactions, you can see price changes, and you can easily compare to other properties… all in your pajamas. So this place I wanted to make an offer for was originally listed at the end of September for $550k. Then it was reduced $25k two weeks later, and three weeks after that another $25k. Translation: “motivated seller.” My interpretation: “let’s make a deal.” I visited the property in the period between those two reductions, so the seller knew that I was looking. By not taking action, I was risking that someone else might make an offer as the price was reduced, but I could also add some pressure on the seller if no-one made an offer. The Jersey Girl loves to watch me buy a car, she calls me a “Moroccan Rug Merchant.” I don’t let that go to my head, I know that these agents (and car salesmen) do this kind of stuff day in and day out. They have seen everything and are deal makers by profession. And I am an amateur, doing this for cars about once every 5 years, and even less frequently for real estate. But knowledge is power and I intend to do my research and be well schooled. Also I can hold back the emotions that these kinds of deals bring out. Pride and emotions make for crappy deals (or failed deals when they get out of control.)
Winter was approaching, the weather was getting cooler along with the real estate market. In early December the seller lowered his price by another $25k. It was time to make an offer. He knew I was interested. I had requested some documents like a survey, well permit information, etc. The rug merchant in me suggested offering $400k, which is what I think the property should sell for and expecting to settle around $425k. Agent 007 said she thought that was probably too low considering just a few months earlier the seller hoped to get $550k. I persisted and sent in the earnest money check with the low offer. Over the next few days we had a lot of back and forth by email and text with the seller, his agent and my agent, negotiating a price and exchanging documents.
These days the transactions are so much easier than the last time I bought or sold property. Everything happens by online documents and silly e-signatures. The last time I did a real estate transaction I sold a co-op in New York City and everything was done by phone, fax, and in person. New York is never a simple place to do business, so in addition to the buyer and seller there were 2 agents, 3 lawyers (one to represent the co-op) and the banks, and the banks’ lawyers. Kaching! The fees and transaction expenses were insane. The piles of paper to be signed (and kept organized) were like mountains made from dead trees. The certified checks brought to the table were made out to each of the participants, agents and lawyers in advance. The closing took hours. Transactions today in Colorado are a wonderful change from all of that. (I don’t know what New York is like today.) Email and text messages speed up negotiations (not always a good thing.) Simpler documents and fewer participants make it a cleaner process. And having Agent 007 to guide me along was a huge help.
Back to the deal: we had a lot of back and forth over price and terms and conditions. At one point I found myself saying that the seller was being a jerk and letting my pride manipulate me. He wasn’t being a jerk, he just wasn’t reacting the way I wanted him to. He was doing exactly what any seller would do: stand firm when he reached his limit. After some deep breaths I tamed my pride and made my final offer. We had a deal! We shook hands electronically.
At 007’s suggestion we offered to close quickly and keep the deal simple. The closing was scheduled for one month after the price was agreed upon. That would be January 9, 2016.
Now it was time for the “due diligence” – well test, septic test, home inspection, title research. It had to happen quickly and complicated by the holidays right in the middle of the due diligence period. Unlike the TV show, I wanted to know what was behind the funky garage doors before making my deal final. I was excited.