The Divulged Secrets of a Yo Yo Neighborhood
Or
Why Can’t Selling Be as Safe as Sex?

by

Harry I. Price, Esq.
  

                What is it that Masters & Johnson and Dr. Ruth discuss after hours, when they are not "on the clock" giving advice about sex?  They talk about “Fluctuating“- the fluctuating real estate prices in their neighborhood.  Why?  Because everyone else is always talking about rising home prices and the general real estate market.  In good economic times, everyone has a fascination with your industry, the number one topic at cocktail parties; and in bad economic times, like now when investors only hear gloom and doom in the stock market, real estate has maintained its reputation as a solid investment vehicle.

 

    Having been a California real estate attorney for twenty five years, not much surprises me.  However, I am surprised about one thing:  why don't all of those real estate ad magazines we see at the grocery stores come in brown paper wrappers?  Why do I say that?  It was just a few years ago that people were remarking about how the prices listed in some of those magazines were obscene!  

 

    However, just as exposure to cable television, movies and Victoria Secret magazines have enabled our youngsters to grow up fast, the public now has a grudging acceptance of escalating real estate prices.  They just don't seem as gross any more, though the gross prices seem to climb.

 

    The hurdle to a thriving career in real estate is not the price of the product.  After all, yours is a marketplace where every other real estate professional has the same or similar inventory available, at the same or similar prices.  The secret to a successful long term career as a real estate specialist lies in protecting your greatest asset:  the health of your business reputation.  Nothing can destroy your assets quicker than the attacks on your professional character that arise from a disgruntled client.

 

Why Can't Selling Be as Safe as Sex?

 

    You probably would never acknowledge that your two favorite subjects are selling and sex.  While those two topics do intertwine to share some common benefits (we have all heard how “sex sells”), a closer examination also reveals some common concerns.  

    While I do not hold myself out to be an expert on sex, we all know that sex has both its benefits and its drawbacks, and that it can be made safer.  The same can be said about selling real estate.  In order to compare and contrast selling and sex, let’s take the easy one first.

What are the benefits derived from sex?

  1. 1.Gratification - the obvious “Men are from Mars” answer.  If I know nothing else, I know how to be superficial;

  2. 2.Part of a nurturing emotional relationship – the “Women are from Venus” response.  Sex is that most intimate of experiences, the display of affection and support that is giving oneself completely to the other partner; and

  3. 3.Procreation - creating life, and with it a commitment of physical, financial and emotional support for the child.  This is the singular consequence that makes sex a truly life-changing event.

 

What are the drawbacks of sex?

  1. 1.Contracting a sexually transmitted disease (STD) – we learned about this in Health class in high school;

  2. 2.Procreation - creating a life unintentionally.  While it is a disservice to the child to be unwanted, it also creates numerous negative repercussions, on the affected family and the surrounding community; and

  3. 3.Death - be it from AIDS or a la Nelson Rockefeller (heart strain).

 

And how is sex made safer?

  1. 1.Prophylactics – their use has been widely promoted, in an effort to prevent the spread of disease and to avoid unintentional procreation;

  2. 2.Birth control devices – when the Pill was introduced in the early 1960’s, the sexual revolution began in earnest.  Critics referred to the Pill as an immoral tool that permitted sex without responsibility, while fans praised it as a family planning tool; and

  3. 3.Education - and you thought I was going to say abstinence, but if we go with that, we're giving up all of the benefits of sex we talked about earlier.

 

Now, using the same factors, let's compare and contrast Sex with Selling.

 

What are the benefits derived from Selling Real Estate?

 

1.    Gratification – that close of escrow (COE), which provides an opportunity for a monetary climax.  (Please note:  if before reading any further, you cannot think of any other benefits, you are in a dead-end occupation, not a profession.  My advice:  get out now);

 

2.    Participate in a nurturing emotional relationship - aiding people at a time of a major transition, one of the most emotional times of their adult lives.  Real estate professionals quickly grasp that a new residence is much more than just a roof over one’s head.  The family home means many things:  a place to raise a family, a sanctuary from a frenetic world, as well as a reflection of one’s interests and values.  Realtors serve a wide range of individuals, from assisting those who are buying their first home with the hope for a future family, to those who survive the loss of a loved one and are now faced with the prospect of a sale to benefit the estate.  In other words, you provide services from cradle to grave, and sometimes even form a social relationship that causes you to be included in your clients’ celebrations of important life cycle events; and

 

3.    Procreation - helping to create the lifeblood of a neighborhood and of a community, not just as a “Welcome Wagon” for each family you represent, but also in your ongoing relationship with those clients - referring them to contractors, places of worship and supporting their schools.  What greater satisfaction is there than helping others in a way best suited to our talents?

 

What are the drawbacks of selling?

 

1.    Death - of your own social life (because selling can consume substantial blocks of time) and potentially of your physical life.  Every vocation has its own stresses, but selling residential real estate can be particularly taxing.  You are expected to be on call, especially during nights and weekends when your clients are most available.  You must juggle numerous requirements, since your clients look to you not merely for real estate advice, but for insuring that the physical legwork gets accomplished in order to complete the transaction.  Sometimes Herculean efforts are required to meet extraordinary deadlines.  And all of the advances in high tech gadgets have not simplified your work; to the contrary, they have increased your accessibility, making it even more difficult to carve out any family time, let alone personal down time.  Time management classes and products are an industry which targets the real estate community for the obvious reason:  if it were up to your clients, you would have no life;

 

2.    Contracting a socially (not sexually) transmitted disease (STD), in this case contracting a reputation as socially toxic & disreputable.  A natural tendency in human nature is to bargain.  There is nothing inherently wrong or immoral in such conduct in a capitalistic society.  When individuals cross the line and participate in questionable or unethical behavior with the hopes of getting, or saving, the deal, they may be sacrificing their character in order to reap a short-term financial benefit.  It cannot be overly emphasized that a real estate salesperson’s duty is to communicate accurate information to the client, and then let the client make the decision.  When one no longer acts in the best interest of the client, he is selfish and self-interested – nothing more and nothing less.  It is terribly important to keep in mind that as a professional in the community, you hope to have more than one transaction with your other colleagues, as well as with your clients.  The worst thing that you can do is be the subject of a “war story” thrashed out in a Board of Realtors seminar or real estate office meeting.

 

3.    Procreation of litigation - being subjected to a lawsuit, which develops a life of its own.  The obvious fear is that trying to navigate the legal requirements and fiduciary responsibilities of a real estate sales transaction is like walking through a minefield.  A single misstep among the myriad duties may result in a claim to a local Board of Realtors, a complaint to the Department of Real Estate (DRE), or a lawsuit.  The negative energy involved in defending one’s actions, let alone the financial expense and down time, is enough to make anyone abhor legal proceedings.

 

 

 

 

And how is selling made safer?

 

1.    Prophylactics.  Though you might not think of it as such, a real estate salesperson employs protective devices in every transaction, starting with the purchase or listing contracts.  Those of you in the business years ago might remember when a purchase contract was only two pages.  They have expanded in length to address and clarify additional issues.  After all, the purpose of a contract is to allocate duties and responsibilities among the contracting parties.  

 

In order to insure that material information is provided to purchasers, the use of disclosure forms are now mandated, including the Transfer Disclosure Statement (TDS – note, the same letters as the to-be-avoided STD, just jumbled in a different order).  Now real estate licensees use a variety of additional disclosure forms in order to make certain that parties who are about to consummate a major financial transaction comply with their obligations to disclose.  And just what is the scope of material information that is to be disclosed affecting value, use or desirability of the property?  That is the subject of many seminars and commentaries, but the short answer is as follows:  If you have to ask, let alone think twice about, whether or not to disclose information, then it is material and you should disclose it.  In other words, in the search for precautionary measures, it is always best to err on the side of disclosure.

 

2.    Birth control devices - mediation and arbitration clauses.  Such clauses address how to resolve conflicts when there is a claimed breach of contract.  These are what lawyers refer to as “Alternative Dispute Resolution” (ADR) methods designed to limit both the financial exposure and time drain of litigation.  While not always fulfilling their initially envisioned promise, to be cheaper and faster than a lawsuit, they are techniques which avoid the threat of a protracted jury trial and/or an appeal.  

As an aside, I was always bemused when those clauses were placed on the FIRST PAGE of pre-printed form contracts.  Why talk about remedies on the very first page?  The purchaser wants to buy a house, not a claim.  I believe that the process to seek legal and equitable remedies should be placed near the end of the contract, after the substantive issues are addressed.  In other words, where's the foreplay before we discuss protection?

 

3.    Education - of your client.  Whether a virgin (first time home purchaser) or a party with substantial experience, your prospective client is, first and foremost, a consumer of information.  Just as when one is courting (you recall that quaint practice, before the age of hook-ups), lavish attention on the party you seek to service.  In a real estate contract, it would be attention to detail, so that your client knows as much as possible about the positives and negatives of the transaction.  Much like sexual interaction, a party to a contract should only participate by providing voluntary and knowledgeable consent after taking into account all factors affecting their decision, which in this case is to buy or sell.  Otherwise, that party will not respect you the next day after the closing.

 

 

 

The greatest truism about litigation is not about the lawyers involved.  It is simply this:  lawsuits occur because the client believes that he was mistreated.  I have had any number of home purchasers come in to my office wanting to sue the seller or listing broker, but at the same time they do not want to sue their own broker.  This is because they believe that their own broker did everything possible to assist them in learning as much as possible about the property.  In other words, they developed a relationship with their broker, because their broker did not treat them as merely a one night stand.