HOT BUTTONS

NUGGETS FOR THE NOGGIN

HOT BUTTONS

By Jim “Gymbeaux” Brown, April 14, 2013

This Nugget applies to people who will buy real estate and/or real estate agents representing people who will buy real estate.  In effect, it applies to just about everyone!

What is a “hot button?”

In real estate sales, a “hot button” is whatever is important to someone who is buying and/or selling real estate.  This Nugget focuses on the buying side of the real estate transaction.

Whenever you purchase any item, there are characteristics, features, benefits and/or cost that plays a significant role in whether you purchase the item; or not.  A real estate purchase is no different. 

Buyers of residential (as compared to commercial) real estate are typically FIRST attracted to a property because of its appearance AND its location.  Location usually comes first and then its appearance.  But once a buyer gets past the initial appearance of the property, the important features, benefits and/or cost come into play in order for the buyers to make the all important buying decision.  The determining factors are what I refer to as HOT BUTTONS.

Unfortunately a great many real estate agents do not focus on buyers’ hot buttons” before a sale is consummated and then pay the price after the sale when the buyers’ hot buttons take over and the buyers then realize what they purchased is not exactly what they “thought” they were purchasing.

What would be an example of this?  I can give you lots of examples but let’s focus on just three.

EXAMPLE 1:  A purchaser’s son is heavy into sports and is the star catcher on his high school team.  The purchaser needs or wants to relocate but needs to stay within the same high school district in order for her son to continue with the same team.  When purchasing a For Sale By Owner, the purchaser specifically asks the homeowner/seller what school district the home is located in.  The homeowner says it IS in the desired district and the owner buys the home only to later discover it is NOT within the same district.

EXAMPLE 2:  A real estate agent lists a home on behalf of a homeowner and the homeowner indicates that the homeowners’ association dues (which is a required membership) is $50.00 A QUARTER.  A purchaser who is represented by a different real estate agent shows the property and looks over the Property Disclosure document that indicates the dues are $50.00 A QUARTER.  The purchaser submits an offer to purchase which is accepted and then it is discovered that the dues are actually $50.00 A MONTH. 

EXAMPLE 3:  A purchaser submits an offer to purchase on a home in a pretty exclusive subdivision and the offer is accepted and the purchaser moves in.  Within a short period of time, the homeowner sets up a home-based business in the new home and the neighbors complain and eventually take legal action because the subdivision restrictions specifically forbid home-based businesses where customers actually come to the home to conduct their business, eg., tax consultant.

In each of these cases the purchasers had “hot buttons” or issues of extreme importance to them.  It could have just as easily been the square footage of a home; the market value of a home; the ability to park a boat or recreational vehicle in the driveway of the home, etc., etc.

One of the most important questions a purchaser of real estate must ask themselves or a real estate agent must ask of the buying customer is “What are your hot buttons?”  Or in effect, what factors must you first satisfy to insure that the property you are purchasing REALLY or ACTUALLY meets your needs? 

Remember, there is a huge difference between a NEED and a WANT.  A purchaser MUST HAVE a NEED but can live WITHOUT acquiring a WANT.

So whose responsibility is it to insure that a hot button is actually satisfied? 

Consider the school district case.  A seller “told” the purchaser that the home was in the desired school district.  Can a purchaser rely on what was “told”?  NO!  If the school district is important to the purchaser the actual school district can be easily determined by a simple call or visit to the local governing agency that makes such determinations.  Since this was a For Sale By Owner, the purchaser must make that call or visit.  If the purchaser had been represented by an agent, the purchaser could ask the buyer’s agent to verify the information.  In either case, the verification should be IN WRITING to avoid any misunderstanding since it is vitally important to the purchaser.

But what would happen if the homeowner had been represented by a real estate agent and the agent entered the school district as conveyed by the sellers into the local multiple listing service (MLS).  The purchaser and/or the purchaser’s agent look at the information provided within the MLS description and it indicates that the home is indeed located in the desired school district.  DOES IT END THERE?

Absolutely not!  Most if not all multiple listing services have a disclaimer on the bottom of the MLS description sheets indicating that the information provided is deemed to be correct but not necessarily reliable.  This is because information can change, homeowners provide incorrect information (as in this case), and entries may simply be in error.  Therefore someone MUST verify the information that is important to a purchaser.

If the purchaser is NOT represented by a real estate agent the purchaser MUST verify whatever information is important to the purchaser.  If the purchaser IS represented by a real estate agent the purchaser’s agent MUST verify that information.  Using what someone “said” is NOT verification.  Remember, to be verified where you can use the verification as evidence, it MUST BE IN WRITING in order for it to be used without having to prove what someone had “said” which is almost impossible to do.

EXAMPLE 2:  Homeowners’ dues are very easily verified by obtaining the information from the homeowners’ association.

EXAMPLE 3:  Anyone can obtain a copy of the Subdivision Restrictions from the local court house.  A word of caution.  Some homeowners provide a prospective purchaser with the homeowner’s copy of the restrictions.  The problem with this is that there is no guarantee that the homeowners copy is the most recent or accurate copy.  .

VERY IMPORTANT UNDERSTANDING:  If you think about it, there is no way that a real estate agent who lists a property, would be able to verify every bit of information that is either required or made available through the multiple listing service.  It would take weeks to list a property if it were required to be independently verified.  Again, that is why the disclaimer appears at the bottom of each MLS description sheet.  It is incumbent upon the purchaser and/or the purchaser’s agent to verify that information that the purchased feels needs to be verified.  When a seller not represented by a real estate agent provides the information, the information provided is what the seller “believes” to be correct.  But, what the seller believes may in fact not be correct or accurate.

VERIFICATION, IN WRITING, IS THE KEY!