Dangerous "Expert" Tips

I just had to comment on something I saw on "Today" this morning on NBC. The channel's proclaimed "real estate expert" Barbara Corcoran was interviewed by Meredith Viera, and gave out some tips for Buyers. There were several tips which in my mind were quirky, but here is the one that frightened me . . . once I heard it, I backtracked on my Tivo to make sure I didn't hear it wrong, and noted down her words. This is what she said, verbatim:-

"Offer all cash if you are pre-qualified for financing. Most people know they can get the financing, and then go in and say their bid is based on financing. It doesn't make any difference. What you should be doing is say 'I'm an all cash buyer'. You've got the financing - go in as an all cash buyer".

Oh dear!! Please don't EVER think of doing this, and don't try to encourage your Realtor to do so either. If you intend to support the purchase with finance, then you should be stating the fact in the offer, and making the offer conditional upon that finance. Why? Because (1) it is a material fact, and by following Barbara Corcoran's advice, you (and your Realtor) would be in great danger of misrepresentation; and (2) because if for any reason you ended up unable to get your finance (for instance, you lose your job?), the inability to raise the funds would be no defense, and you would be in default on the contract. This would risk your escrow deposit at best, and leave you being sued at worst (Please note: I am not a lawyer, so this is a personal opinion only - if in doubt, take professional legal advice).

It does worry me when people speak on TV to a large audience that regards them as "an expert" on the subject, but then give advice that is ill-conceived, misleading, or downright dangerous. Let me assure you - the person who knows best how to help you with purchasing or selling real estate is your Realtor, and your Realtor alone. Not your relatives, neighbors, work colleagues, and - worst of all sometimes - "experts" on TV!

Talking of which, I had a settlement yesterday on a property on High Knob, here in Front Royal. As we were doing the final walkthrough, Carson, the buyer, said to me "I've been worried because everything has gone so smoothly, yet everyone kept telling me about all the problems and nightmares that were going to happen". No problem Carson, you were in the hands of my excellent recommended mortgage guy Adam Huddleston, owner/broker of Integrity Home Mortgage; and of course in the hands of an experienced Realtor who has sold over 300 properties in and around Warren County, Virginia, over the past seven or so years. Experience counts for a lot.