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April 17, 2014

‘Real Estate’s Version of Road Rage’

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‘Real Estate’s Version of Road Rage’

Disputes over $150 ceiling fans, curtains, or a dusty chandelier may seem trivial when negotiating a home sale, but some real estate professionals say such squabbles have actually cost them deals.

“It’s the real estate version of road rage,” Paula Del Nunzio of Brown Harris Stevens told The New York Times. 

What’s really at play here over these disputes? Is it really about the great desire to have that ceiling fan or curtains?

“Sellers are wary of having parted too cheaply with a profound investment, their residence. Buyers are leery of having paid too dearly and often are already punch-drunk from the trauma of the financial frisking endured” from going through the mortgage applications and process of purchasing the home, The New York Times reports. 

“Closings are such a heightened emotional event,” says Lindsay Barton Barrett of the Corcoran Group. “You can literally have a multimillion-dollar deal fall apart at the last minute — in my case over a dining-room table.”

Steve Matz, a partner at the real estate law firm Katz & Matz, says he determines what’s a fixture in a home by imagining putting the entire home in the palm of your hand and turning it upside down and shaking it very hard. “Whatever does not fall to the ground is a fixture,” Matz explains.

But some buyers and sellers will still disagree about what’s staying and going with the home.

Scott Claman, a real estate lawyer for the firm Giddins Claman in New York City, says that he refers to such points of tension in negotiations as “Post-Traumatic Deal Syndrome.” He recalls an incident when negotiations were turning sour for a $4.5 million duplex in New York City when the buyer-seller were at odds over a $35,000 sculpture that wrapped around the winding staircase. 

“It almost killed the deal,” Claman says. “Both sides wanted the piece of art, so it was a slow-moving, excruciating negotiation.” Ultimately, the buyer did end up getting the sculpture. 

Shii Ann Huang of the Corcoran Group recalls a fixture that almost cost her a deal in 2010 involving a $700,000 co-op. The buyers assumed the ceiling fan in the master bedroom was part of the purchase price, but prior to closing, the sellers said they’d be willing to sell it to the buyers for $300. Negotiations stalled. To save the deal, the agent and the broker representing the seller ended up paying the $300 themselves to resolve the dispute. 

But later on, after visiting the home after the buyers moved in and renovated the home, Huang noticed the ceiling fan was gone.“They had thrown it away,” Huang says. “So the whole fight was really over nothing. There is something psychological that goes on at closings where people feel they’ve got to get something extra.”

Source: “How Fights Over Fixtures Can Derail a Closing,” The New York Times (Aug. 23, 2013)

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