Is what you see what you get, upside down or right-side up? When a buyer goes under contract on a home or commercial building, the due diligence period begins. Now it is the buyer’s chance to unearth anything that needs repair or replacement. An attorney or title company will look for defects in the title, encroaching lot lines, hidden easements, etc. Most of the time it’s a material defect that needs attention, and this can only be revealed by home inspection by a knowledgeable inspector. Sometimes, even an experienced inspector can get lazy and make a mistake.
In the world of commercial real estate, it is common for a listing agent to sell a property to a buyer who is happy to represent himself, thus the agent would be entitled to the entire brokerage fee. This frequently happens because commercial buyers are typically savvy about the process, and comfortable with its “buyer beware” environment. But, in the residential world, this is rarely the case, although a surprising percentage of buyers brush aside the opportunity to have a buyer agent represent them, be their advocate, their “bad cop”, and their research resource.
If I had a nickel for every time I heard “not gonna give it away!” I’d have enough to retire. That expression always comes from the homeowner based on whispers and third-hand information, rarely from actual sales data. More often than not, homeowners divine the price they think their house is worth, perhaps to recover renovation costs or a refinanced mortgage, and that becomes their target sales price.
When you buy a house, or even a banana, you are supposed to do this: due diligence. How “diligent” you are lowers your risk in the purchase, and determining what is “due” forms the list of questions that need to be answered. In the case of a banana, your due diligence is simple – if fruit flies are circling, you’ll pass. For a real estate investment, conducting thorough due diligence using trusted experts is a must. Even then, there are always things that can be missed. But, the large items – the roof, HVAC systems, etc. – should be looked at carefully.
Buyers of real estate are empowered by the internet’s ability to view properties in great detail, and this has enhanced if not replaced the real estate agent for the purpose of finding properties to consider, especially in the current social-distancing environment. They often call the listing agent directly to ask questions and schedule showings, which is their right. But, it is a mistake to assume a buyer’s best interests are equally well served by the listing agent whose loyalty is exclusive to the seller.