Closing Chicago Real Estate

 Powered by Max Banner Ads 

Yep, we’re tweaking what we do here towards a dating model. Real estate is one of the last dating niches for a Website no? Could be big money! Well, perhaps I’ll let that idea get snapped-up by someone else and I’m happily married so…

But relationships are VERY IMPORTANT to real estate transactions and I’m constantly amazed that they’re not cultivated better. Why? Because it’s flat-out in everyone’s best interest that the different players in a real estate transaction get along and work well together. Because with minimal exceptions, everyone has the same end goal so why not just make it easier to reach the finish line?

I suppose the explanation for friction within a real estate transaction is in parts related to the sinful nature of man and also the egotistical (yet wrong-headed) need of attorneys or agents to appear “aggressive” but generally it’s unnecessary and foolish. Creating a great working relationship with opposing counsel or the agents/mortgage professional can be the difference between closing and not closing and may literally mean hundreds of thousands of dollars. Here are some recent examples I’ve experienced where a good real estate relationship was critical:

Earnest Money Return. Within every transaction exists the fairly good possibility that it won’t close and that a Buyer will be asking for his earnest money back. And if you’ve been in the business long enough you’ve had a deal or two where the earnest money release wasn’t easy and perhaps never happened. And the issues are rarely substantive, they usually boil down to one party thinking the other is a jerk. I can think of 2 deals in the last 6 months or so that didn’t close and fortunately in both cases where my client was the Buyer, the earnest money did get returned EVENTUALLY. But there was quite a bit of time differential…like 1 day vs. 1-2 months. In the “1 day” deal, there weren’t agents on both sides so it was me and the Seller’s attorney. I didn’t love the guy but we communicated well and when the deal died the money was returned promptly. In the “1-2 month” deal, the two agents were absolutely dysfunctional. I don’t know who was the problem but lets just say that the listing agent would call my office because he and the Buyer’s agent could not work together whatsoever. I felt fortunate the earnest money was ever released.

The Unexpected Post-Closing Holdover. Meaning, the unexpected need for a Seller rent-back a unit/home post-closing or to simply delay the closing due to unforeseen circumstances. Again, this possibility exists in every transaction, and it’s no big deal, UNLESS, the parties simply are unreasonable and can’t work together. I just represented a Seller who had to holdover where actually his purchase contract fell apart pretty much simultaneously with when the sale offer came in. But on the sale everyone liked each other and was extremely professional, my Seller client stayed-over nearly 1 month, he left the unit in good shape, everyone’s friends and he got his full $5,000 security deposit escrow returned.

A Deal That Doesn’t Close PERIOD without Mutual Trust, Goodwill. These don’t come along all that often but maybe once a year and you as a good lawyer or real estate agent really earn your fees because in these deals you can save your client hundreds of thousands of dollars…i.e., the relationship between the parties is excellent or the deal doesn’t close! Earlier this year I had a transaction without any real estate agents on either side so it was pretty imperative that clients/attorneys worked well together even if it were a vanilla transaction. So for starters the clients put together the contract between the two of them and worked out a repair credit. Then the appraisal came in a bit low so the price and credit adjustments had to occur. There was excellent communication between the clients. My clients were actually the heirs of an estate selling this home and weren’t local so even for the walk-thru I met the Buyer at a CTA “L” stop on my way downtown the morning of the closing and gave him the keys to the place to do a walk-thru (glad the home didn’t get burned down before the afternoon closing). But what options did we have? And finally, the big kahuna, at the closing the Buyer’s lender wouldn’t let a fairly sizable closing cost credit show on the HUD-1 and a little side deal had to occur or the closing would not. The kind of side deal that’s not in writing and likely not enforceable at all but there was trust between the parties and the side deal occurred and the deal closed.

Tweet This Post

Comments (0) Jun 16 2010

I’m particularly troubled in real estate transactions when I observe real estate agents acting in their best interests and not their clients’. The relationship between agent and client is that of a fiduciary and principal and the agent owes a fiduciary duty to her client.

Fiduciary Duty:  A legal requirement of loyalty and care that applies to any person or organization that has a fiduciary relationship with another person or organization. It’s a duty is one of complete trust and good faith. And “breach of fiduciary duty” is a great little negligence action.

Sadly I see this duty ignored if not legally breached WAY too often. Some recent observations from my real estate world…

Dual agency a/k/a loyalty to no one. I’ve been dealing with a sad situation regarding some recent buyers that we represented. Long story short their sellers likely were fraudulent and in violation of various disclosure laws concerning some basement flooding that existed in the property and they surely knew about prior to the sale. They’ll be dealt with accordingly but the “dual” real estate agent who surely wasn’t acting in the buyer’s best interest likely will be receiving a little summons too.

Encouraging LESS/NO Contract negotiation. I get very uncomfortable if a real estate agent remains too involved in contract matters subsequent to a contract’s signing and it’s beyond just “lack of comfort” when my client’s agent overtly works against my client’s interests. For example, the agent recently who specifically discussed backing off of some of our proposed contract/inspection requests that were raised specifically by our client.

Over-Bidding. Any reason to bid above the listing price on a long-listed foreclosure property? Likely not…oh wait the agent’s commission is based on purchase price…sure.

Tweet This Post

Comments (0) Jan 22 2010

No surprise to readers in this space, we previously touched on Buffet’s interest in the Chicago market nearly a year ago.  Here’s some local coverage of the purchase here and here. Main point:  real estate isn’t dead and it’s a good, long-term investment. Thanks to the Dirty Lawyer and Wasserlawblawg for the heads-up via Twitter.

K & S is near and dear to my heart…grew up with many children of the founders in the northern ‘burbs.

Tweet This Post

Comments (0) Sep 01 2009

Well, I”m no trial lawyer but in Illinois state courts the answer is two-fold:  a) when you have a cause of action where such right existed at the time of common law (thanks to our old British colonial past); b) if the legislature creates a new cause of action and specifically sets forth the right to a jury trial. Of course there really are virtually zero civil jury trials these days anyways, right? Or you have cases like below where there was NOT a legal right to a jury trial but the trial judge gave them one anyways.

Here’s the case, Anderson v. Klasek, No. 5-07-0390…sort of your typical suit brought under the Residential Real Property Disclosure Act, et al, where home buyer sues seller and listing agent. The plaintiff/buyers brought separate counts under the Residential Real Property Disclosure Act, the Real Estate License Act, and the Consumer Fraud Act.

Since all of these Acts are not based on the common law and a jury right is not set forth within them, there’s no right to a jury trial said 5th District Appellate court. So, Plaintiff gets a second chance…read the case, I don’t like his chances anyways.

Tweet This Post

Comments (1) Aug 21 2009

An attorney and friend of this blog sent me a note about this so I thought I’d throw a shout out about this brand, spanking new venture:

AgentsCompared.com

Here’s a snippet from the press release:

Chicago, IL – July 7, 2009 – Consumer-centric website AgentsCompared.com, launching today in Chicagoland, helps prospective home buyers and sellers make more informed decisions when selecting a real estate agent. The site lets consumers efficiently discover, evaluate and compare – on an apples to apples basis – competing local agents on the criteria most important to them, such as an agent’s track record (success stories, relevant statistics, etc.), price (commissions, rebates, etc.), specialties (first time buyers, short sales, REOs, etc.), local market knowledge, and over a dozen others. Prospective home buyers and sellers can use AgentsCompared.com to see how a referral stacks up against competing agents, and find other local agents that may offer better value, greater expertise, etc.

I see some potential in the site. I suppose the key is getting agents signed-up and really providing useful information. A couple searches I did came back with some “not disclosed” entries for real estate agents…that doesn’t help me. And no agents up yet for my home town. But I’ll relax, it did just launch on Tuesday of this week.

I’ll keep my eye on it and perhaps get in touch with its founder to hear about his plans.

Tweet This Post

Comments (4) Jul 10 2009

A mildly sarcastic list from Smart Money about the foibles of real estate sales people…some sadly quite true…

1. “Your open house is really just a networking party for me.”

2. “My fees are negotiable.”

3. “Think you’ve had no offers? Actually, there’ve been several.”

4. “I’m not obligated to keep my mouth shut for you.”

5. “Sometimes I forget whose side I’m on.”

6. “I know zilch about zoning.”

7. “I won’t let termites—or pesky inspectors—kill a deal.”

8. “I sometimes forget I’m not a lawyer.”

9. “My website is a dead end.”

10. “You can probably do this without me.”

Tweet This Post

Comments (0) Jul 10 2009

A dreaded double…first there was the transaction where our listing agent failed to collect earnest money from a buyer making an offer and now the listing that apparently never was. All in the last 6 months.

Have people forgot the process since no property has been selling over the last 18 months??

And this recent faux listing wasn’t a big deal but it just is so eye opening that a supposed real estate broker would have these dated listings on her Website and the MLS and then not communicate with the buyer’s agent who submitted the offer for like a month before fessing up that this property isn’t for sale. Don’t think I’m going to be recommending you to my friends nor recommending that offers be made on your “real” listings.

Tweet This Post

Comments (0) Jun 20 2009

Watch this piece starring Chicago Realtor Lino Darchun.

Some good tips including to interview at least 3 agents up front and ask agents about their agency duties (I’d love to hear folks’ answer to that one…I’d like to hear some lawyers define an agency relationship too for that matter).

I really appreciate good rigor on the part of a potential client. It says to me that this person’s smart and wants a qualified professional versus the person who just hires you on a whim and then fires you on a whim because their best friend told them you’re not doing a good job. I got retained late last week by someone who’d seen me at a homebuyer seminar, but then called because she was interviewing attorneys and I spent probably 15 minutes going into my specific background and what she should be looking for in an attorney.

Tweet This Post

Comments (3) Apr 14 2009