Real Estate Lags the Digital Age
The real estate business cannot be conducted via text message. When it comes to communicating with your own broker, you need to answer the phone and read and respond to your emails. If you are not adult enough to do this, maybe go rent an apartment.
Likewise, if you are a first-time buyer, it is time to learn how to use your checking account. You may be able to PayPal or Venmo some sellers, but the escrow agent and other vendors are going to expect checks or bank wires. Note that the contract most often does not allow for the time needed for your bank to mail checks. Alternatively, expect to get official checks from your bank. I know you are hip children of the digital age, but the real estate business is not. And for now, that's just the way it is.
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Okay my younger friends, this chapter is for you. Let me just admit right up front, when it comes to technology, the real estate business is behind the rest of the world. We have discussed the fact that brokers are not the most technically adept people. But real estate is also a very legalistic business and a very regulated business. Any technology adopted has to meet these requirements. For example, as of 2020, the North Carolina Real Estate Commission makes no allowance for brokers to accept PayPal or Venmo-like escrow payments. Yes, I know that there are firms that will, but if they are acting as brokers, they are breaking the law (in my state).
Should you be able to Venmo your Earnest Money and Due Diligence Fee? And rent and security deposits and whatever else? Sure. But it is not really that the law is bad. It is just that the law and regulators are simply behind. Like you, I can only hope that they catch up some day soon.
Until then, you are going to need a checking account. And either order a book of checks or expect to go get checks from the bank when you need them.
It gets worse: This is a particular problem when you are moving to a new area, say out of state. Let’s say you arrive for a few days to search for a place to live. And you find one. If you need checks for the Earnest Money and Due Diligence Fee, or security deposit and first month’s rent, or whatever, but your bank does not have a branch in the area…what is one to do? I can tell you, sellers are not going to wait for you to return home, visit your bank, and mail a check.6 That’s just not going to happen.
So be prepared for this.
This is also true for rental units where a broker is involved. If you are renting directly from the landlord, they are not required to follow our state’s Real Estate Commission’s rules. So they may well accept some online payments. I know some of the large apartment outfits do this. But be aware, most landlords with rental houses use brokers.
Now we have to talk about communicating with your broker. And I’ll just be blunt here: There is nothing that will cause me to fire a client faster than one who will not answer or return my phone calls and respond to my emails.
Real estate is not a simple business. There are so many choices to make. Forms to complete; long forms. There are if this, then thats to decipher. As licensees, there are things that brokers need to be able to document that they discussed with you. Often email works best for this. But there are other times when nothing is better than a phone call. Your broker is probably not calling just to say hello.
Brokers cannot care more about your real estate endeavors than you do. But here’s the thing, I have been in this business long enough to know that there is a lot that you don’t think you care about now, but sooner or later, you will care about. And who gets the: But why did you not explain this to me question? The broker. If you are a first-time buyer, I would go so far to say, allow the broker to tell you what you should care about.
So if you want to text me that you are in traffic and will be a few minutes late, fine. But if we need to discuss the Inspection Report, take my phone call.
Now I know, if you are someone who can’t be bothered with a phone call, even for complicated issues, you are probably not going to be reading a book on competence and integrity. On the other hand, if you go to the trouble to find a competent broker, get as much information out of them as you can. Make them earn their money.
Okay and finally, why include this chapter in a book on real estate competence and integrity? It is a fair question. But if a client, or even a potential client, cannot communicate with their broker, it will be impossible to judge competence and integrity, much less to insist on them. This whole business relies on effective communication. And we see enough problems in this area to warrant a brief discussion here. The same is true for the earlier bit about checking accounts and checks.
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6. What about cash? Question: Can’t we just visit any old ATM machine and withdrawal the necessary cash? Two problems. First, I have never heard of a broker or attorney or title company accepting cash escrow payments. Maybe it happens, but I’ve never seen it. I can tell you, our firm would never allow it because we want the accounting paper trail that only comes with a paper check. Why? Because we are subject to audit by our state’s Real Estate Commission. And second, at least for real estate purchases, the amount needed may well be over your bank’s daily ATM withdrawal limit or the ATM’s owner-bank’s daily limit. Heck, it may be more than several days’ limits combined.
But if you can get the cash, you could walk into any bank and pay the non-customer fee to get an official bank check. I mean I think you can. Actually, I am not sure anymore. And in any case, this is not a good strategy on a weekend. So please, just bring a checkbook.