If you bought a house recently, you already know that it can be a hair-raising experience in a busy market in which real estate agents may have multiple closings in one day and some crucial details can get overlooked.
Here's a cautionary tale for those going through the process.Couple A sold a house to couple B at an agreed-on price. The process was going along smoothly except that couple B -- like many young people buying their first home -- was short of money.
To help out, the buyer's real estate agent called the sellers and said if they would lower the sales price by 1 percent, he would reduce his commission by a similar amount. The sellers would come out even, the buyers would come out ahead.
The sellers agreed. But at the closing, they found the buyer's agent was seeking his full commission and the sales price on the house had been lowered 1 percent.
The buyer's agent argued that no agreement had been reached on lowering his commission and that the lower sales price was the one that had been negotiated from the start.
In such a case, you would think that the real estate agent for the sellers would have all the necessary paperwork to prove their case. But she was working so many sales at once that she overlooked this detail.
The sellers were infuriated and walked out of the closing. The buyers were befuddled. The two real estate agents went to lunch to continue their argument. Seven hours later, it was worked out -- the buyer's agent reduced his commission, the sellers returned to the table and the sale went through.
Mrs. Seller concluded that the harried real estate agents simply had failed to do the careful work they would have done in ordinary times. Mr. Seller thought the buyer's agent might have been trying to cheat them.
Whatever, it's doubly important in a hot real estate market to make sure that everything is written down and signed and understood. Most of this is the job of your real estate agent, but it is a good idea to double check everything yourself. Be outspoken and even demanding. After all, you're paying a lot for the real estate's service. You should get all the careful attention you need, no matter how busy the agent is.
A study by the Mortgage Bankers Association found that the average retail loan company last year originated 27,912 mortgages, up 71 percent from the average 16,329 in 1977.
"An average interest rate of 6.95 percent in 1998 contributed to a record year with $1.5 trillion in originations and another solid year of profits for the mortgage banking industry," said MBA economist Tiffany Rowan.
Pamela Reeves writes this column weekly for Scripps Howard News Service.