Civility in a Florida Real Estate Closing

GOT CIVILITY? There are numerous panels addressing civility in the legal profession and “GOT CIVILITY?” is the tag line. It’s cute but kind of sad that it has to be “a thing”, especially in the transactional world of the purchase and sale of real estate.

Business, Deal, Smile, Cheerful, Smiling

In researching this article, I discovered that there is a Florida Supreme Court Commission on Professionalism and Civility.  Is it really that bad out there? The short answer is, yes. Since I started practicing law in Florida in 1989, I have witnessed professionalism and civility deteriorate.

In a real estate transaction, presumably, the end goal is the same for all involved, the transfer of property. When the property is transferred, everyone wins. The thing is that over my almost 30 years in the business, I have seen the unnecessary arguments and push to get things done fast, rather than correctly, increase.  The path to the closing table has changed and it seems that some of that change has resulted in lack of civility.

Perhaps because most professionals involved in a real estate transaction do not get paid unless and until the transaction closes, perhaps because people just like to argue, perhaps because technology has sped up all of our lives, perhaps because people want the best deal possible, perhaps because the process has generally been heavy in negotiation. (Always ask more than you want, never pay list price, the dance is that 3-5 offers get passed along before the parties get to a number that they really wanted from the beginning)…that custom of negotiation has somehow seemed to morph into an argumentative stance.

Background of the transfer of real estate:

Delineation: Somehow, sometime, humans started delineation of land. It was no longer to be shared. We somehow came to mark and own and defend “our property”. We built rock walls, fences, planted stakes, engaged in war, created survey lines and became territorial. The earth was no longer shared by all of us.

Feoffment and seisen: One of my favorite professors in law school taught this concept. It was the process of transferring possession and ownership of land. It was often a transfer from the Feudal Lord to his Servant after the Servant earned it. I also remember that the Ceremony of Feoffment involved the transferor picking up a handful of the dirt and placing it into the hands of the transferee.  The image of that ceremony has always stuck with me. It seems such a romantic and significant way to fully and ceremoniously represent the transfer of the use of the earth.

Changes in use:  From cooperative to separatist.  From rural to urban, and then suburban sprawl, then to gentrification and there has always been a small movement back to cooperative living. In the 60s, they were hippies in communes. Now they are scholars and scientists studying and experimenting with sustainability of our natural resources. They are residents of condominiums and cooperative apartments. I suppose the changes in use have been human reaction to our harsher demand that we make on the earth. We didn’t always have electricity, running water, and packaging, to name a few. These comforts create a need for more space and have created waste.  With electricity, more humans move about the planet 24 hours a day.  Running water and indoor plumbing requires a sophisticated infrastructure, from getting the water to the people to taking away the waste. The shopping that we do and the fungibility of goods and anti-theft and anti-fragile packaging has created a ridiculous amount of waste.

We have one earth, no more is getting made. In fact, some would say that we are actually losing it (erosion, global warming, and flood projections). The earth is precious. We transfer little bits of it to each other every day, not with the respect that it deserves and as the caretakers that we should be, but as a disposable commodity, to make money.

There is no longer the ceremony of Feoffment. I do not even think that the ceremony made its way to America. We rarely even sit at a closing table anymore. The sellers and buyers rarely ever meet each other and sometimes never speak to each other.

When I started, in the late 80s, realtors, lawyers and the parties still worked together to do their best to make sure that the property was well suited for the customer and that title was clear. The days between contract execution and closing were utilized to make sure that the details of the transaction were attended to and all “Is” were dotted and “Ts” were crossed…..that the parties were protected on the largest monetary investment that people make in their lives. That we would have a CLOSING and move on.  Now, lawyers are brought in when things go “sideways” unless one of the parties insists upon their lawyer’s representation.  Most transactions utilize form templates obtained through various organizations and the internet, title searches, municipal searches, surveys, appraisals and more are obtained online. Documents are executed online or via email, documents are recorded via electronic means. All of these advances are amazing and have created immense efficiency but we have lost the ceremony for the customer. The players making the deals happen just want to get to the finish line fast! Close the deal, send the wires and move on. The parties are often dealing with faceless realtors, title companies and lenders. This creates a hard bargainer attitude and sometimes an air of distrust.   It is much easier to be less civil to a faceless entity than it is to another person. It is much harder to trust a faceless entity than a person.

Vestiges of my father’s days as a real estate attorney remained, but not for long. The things that I used to enjoy about a closing, watching it unfold, watching the people enjoy the process and having a pot of coffee or tea at a morning closing or a bit of scotch or champagne at an afternoon closing are almost gone as well. These moments at the closing table made the people in the transaction feel better able to move into the new responsibility and out of the home that they lived in, often for years. We must all remember, a house is more than that, it has been home for the seller, perhaps the place where they raised their children and had other happy moments. For the buyer, the house represents a place to make a new home, a place to create memories and dreams.

Adult, People, Woman, Sit

Through all of our haste and all of the wonderful technology, don’t forget about the human element, for the buyer and seller most of all, but also for each of us in the industry. We are not in the industry to make people feel distrustful or look greedy due the high volume and lack of personal contact. We do not intend to offend. Just be mindful that in our haste, we can be perceived as that faceless uncaring entity. With all of the time that technology has allowed us to save, let’s focus on the human connection.

Do it right, utilize technology and every resource available to conclude this expensive and sometimes complex transaction, but remember to keep it simple and keep it civil. In fact, make it joyous. We are all participating in the temporary exchange of the earth.

Treat the earth well: it was not given to you by your parents, it was loaned to you by your children. We do not inherit the Earth from our Ancestors, we borrow it from our Children.

—Ancient Indian Proverb

Written by Amy McGrotty, Esq.

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The Pros and Cons of The Tiny House Fad

Written By Ashley L. Hobson, Esq.

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One of the most recent movements in real estate is the concept of the “tiny home”. We’ve had many Realtor friends ask about how to consult their clients when it comes to buying the perfect home.  There is a lot to be said about changing your lifestyle to fit a new environment- it shouldn’t be a decision made lightly. It is important to consider certain issues before jumping into the tiny house movement. Below we take a look at some of the Pros and Cons of the tiny house fad.

Ownership and Investing in your Future

Home ownership can be both rewarding and draining. In today’s market, millennials are projected to be the next big target for home buying. Having equity in your home is one of the best ways to invest in your future. Additionally, the tax benefits of owning a home are beneficial as well. On the other hand, while renting might be an appealing option- it doesn’t have monetary return.  In a time where the market is finally becoming more stable, the opportunity to own a home is becoming a more attainable goal.

Resale Issues

While owning your own home is surely an investment, you will reap the benefits of this investment when it comes time to sell. Where Tiny Home are proving to differ from standard residences is in resale value. According to an article in Forbes Magazine entitled “5 Reasons Buying a Tiny House Is a Mistake”, tiny homes are actually less marketable. There is a small concentration of individuals that a tiny home would actually work for. It seems that you would be hard pressed to find a buyer who didn’t want to entertain house guests at some point. The pool of individuals truly interested in tiny homes shrinks even smaller due to lending institution restrictions. In the same Forbes Magazine article, the author notes that lenders often have square footage requirements that must be met. This means that buyers have to be ready to pay with cash. It might be easy to make an “in the moment” decision, but you really should consider the long term value of your investment.

The Appeal

Since millennials are a large target for home buying- it is likely many may consider “going tiny”. In a time where we can’t go five minutes without checking our texts, or social media and email accounts- the thought of cutting out clutter and living cleaner can be appealing. The idea of being mobile and picking up and moving whenever you want might appeal to those who love to travel. For those who don’t want to be tied down to one location forever, but still want to invest in real estate- this concept may work for you. Making the “tiny home” purchase has taken the hassle of shopping for a home away- it’s now as easy as clicking a button on Amazon. Student loans do not make the idea of owning a home appealing to many millennials; debt often gets in the way of getting loan approval.  The tiny home movement does have its appeal when it comes to targeting the millennial crowd.

Space- is it really feasible?

While living simply might appeal to you in theory- it might not actually work in practice. Can you really part with 75% of your possessions? If you have a bike, cooking equipment, or shoe collection- this could prove to be difficult. Individuals interested in tiny homes should really consider what they can truly part with before going through with the purchase. If there are big items you can’t part with- will they fit in your tiny home? If you cannot answer this for certain, maybe hold off on the purchase.

GTAR: Discovering Commercial Real Estate

.     Discovering Commercial Real Estate

  • DATE: Wednesday, February 24, 9:30 a.m. to 12:30 p.m.
  • DESCRIPTION: If you are a newly licensed agent or a residential agent who wants to learn about commercial real estate, this course is NAR-approved that offers a broad overview of the basics of commercial real estate and how it differs from residential real estate. Realtors will be able to distinguish and understand the broker’s role and discover the different types of commercial properties, terms, valuation methods, marketing and resources for further education. While it will not equip you with all to practice commercial real estate, it will explain the business and introduce many of the resources needed to pursue a commercial transaction or a career in commercial real estate. Instructed by Carlos Fuentes, CCIM. PLUS, course is state-approved for 3-CE hours.

This course is NAR-approved that offers a broad overview of the basics of commercial real estate and how it differs from residential real estate._ Realtors will be able to distinguish and understand the broker’s role and discover the different types of commercial properties, terms, valuation_ methods, marketing and resources for further education. This is an ideal introductory course for those who are newly licensed and/or residential_ agents who want to learn more about commercial real estate. While it will not equip you to practice commercial real estate, it will explain the business_ and introduce many of the resources needed to pursue a commercial transaction or a career in commercial real estate. Instructed by Carlos Fuentes,_ CCIM. PLUS, course is state-approved for 3-CE hours. What You Will Learn in the Discovering Commercial Real Estate Course: * The duties of professionals who assist in commercial transactions * The key differences between commercial and residential real estate * Types of commercial real estate (Office, Retail, Industrial and Land) * Types of commercial transactions * Commercial contracts Brought to you by GTAR’s Realtors Commercial Alliance and co-sponsored by AB Capital Group and Florida Community Bank.

http://www.gtar.org

Sign-Up: https://mdweb.mmsi2.com/tampa/tampa_courses.pl?course=16RCA0224;

GTAR: Completing an Effective Purchase and Sales Contract

DATE: Tuesday, February 16, 9 a.m. to 1 p.m.

DESCRIPTION: The Sales Contract is the ultimate destination – the culmination of the Realtors® expertise with the customer’s binding agreement. In recognition of the full power it carries, this course was designed for real estate professionals to polish up their process of completing a contract from the first word to the last signature. Learn to view the contract as more than just an official document, but rather understand how to use it as an influential instrument to aid in closing. In conclusion, student will be able to explain the agreement to a customer/client, as well as identify the proper timing of execution and the use of the appropriate disclosures. Instructed by Phil Riek, Lic. Florida RE Instructor. NOTE: This course will cover the “as is’ contract only. Course is state-approved for 4-hours of CE Credits

 

LOCATION: Greater Tampa Association of Realtors