Sometimes in life, going rogue is what you do when you have an independent spirit or when coloring inside the lines isnâ€™t getting good results. Â Other times, to go rogue is to veer into the danger zone, beyond the boundaries of what is safe or will get you to your desired objective.
Some things are so high stakes, the potential for massive rewards motivates people to go rogue, but the potential for massive risk cautions the wise person not to. Things that fall into this high stakes category, in my humble opinion, include cosmetic surgery, base jumping and, yes, real estate.
Letâ€™s take a deep dive into some of the ways real estate can and does go rogue, and help you understand just when the risk is worth taking - and when safety is the better bet.
1. Â The â€œrogueâ€ buyerâ€™s agent. Â The rogue agent is the one who is constantly going entirely off the charts from what youâ€™ve laid out as your criteria for a home. The one who shows you a house in Parkview when you said you wanted to live in Oakview; the one who shows you a 2 bedroom when you insist you need 3; the agent who shows you condos when youâ€™ve asked to see single family homes - and vice versa.
Sometimes, a rogue agent can frustrate a buyer, especially when there is urgency to finding a new home, when your time for house hunting is tight, or when the homes they are showing appear to have nothing that would cause the agent to reasonably expect that you might be inclined to make a compromise. Working with a rogue agent can also be frustrating when you feel like youâ€™re simply not being heard.
But in my experience, more often than not, thereâ€™s method to a so-called â€œrogueâ€ agentâ€™s madness. Â Some agents go rogue when thereâ€™s a real disconnect between a clientâ€™s asks and their budgets, in which case they arenâ€™t going rogue at all but, rather, reality-checking you on what you can get for your money in your market (whether or not you are inclined to shoot the messenger). Â Other agents go rogue when theyâ€™ve really listened deeply to the picture youâ€™re painting of the lifestyle you want to live â€˜afterâ€™ you buy, and they have reason to believe the homes they are showing you can create that better than what youâ€™ve asked for. Â Still others go rogue when they come across a unique opportunity they think you might love - Â frankly, part of the advantage of working with an agent in the first place is to have someone watching aggressively for opportunities that come on the market that you might miss for one reason or another. Risk vs. Reward: Â The risk of working with a truly rogue real estate agent is really the opportunity cost - all the homes you might be missing out on if your agent just wonâ€™t listen to what you have to say. But there is incredible potential upside to working with a â€œrogueâ€ agent if they fall into the following categories: Â Â Â â€¢Â Â Â who is willing to break the truth to you, no matter how hard; Â Â Â â€¢Â Â Â who is willing to think creatively and draw on their own experience to bring you creative solutions to your housing needs; and Â Â Â â€¢Â Â Â who always has you in mind as they see unique opportunities in the market and will surface them to you when they come up. Before you get upset with an agent you think has gone rogue, make sure theyâ€™re not actually just trying to do one of these things. 2. Â Disclosure debacles. Â Â Some sellers, given the traumatic nature of the market over the past few years, get worried that a laundry list of little fixes, nicks and all the â€œminorâ€ repairs that have been done over the years theyâ€™ve owned the home will scare off a good buyer or will otherwise ruin the deal. Â Occasionally, one of these sellers goes â€œrogueâ€ by deciding not to mention a few â€œlittle issuesâ€ they have had with the home.
Reality check: a disclosure you might see as minor could be the trigger that makes a buyerâ€™s inspector dig deeper into a particular item - it could even cause the buyer to order an inspection they wouldnâ€™t have otherwise. And, yes - this does increase the chances that a buyer will find something wrong with the place during escrow, and maybe even increase the chances that they will ask for a price reduction or repair credit to close the deal. But most buyers just want full information so they can make a decision about whether and how to move forward - so, chances are also good that the buyer will find nothing wrong at all, or will find something wrong with the place and move forward on the original terms - or maybe will offer to split the difference on the repair costs; the potential outcomes are many. Â But you know what? Giving a buyer true, full disclosure also vastly decreases the chances that they will come back and sue you years down the road, when something goes wrong that they might have been able to find if you had disclosed your little plumbing peccdilloes up front. Whatâ€™s way more expensive than splitting the difference with your buyer on a sewer line replacement? Â Paying court fees, arbitrators and attorneys to sort it all out five years down the road. Risk vs. Reward. Â When your grandmother taught you that honesty was the best policy, she was unwittingly giving you the best real estate advice there is. Thereâ€™s simply no contest here - the risks of non-disclosure so far outweigh any possible reward from skimping on the house history that smart sellers err on the side of overdisclosure every single time.
3. Â HOA hijinks. Â The potential for drama within a homeownerâ€™s association (HOA) is a specter that looms large in the nightmares and worst-case scenarios of every condo-considering house hunter and many owners of townhomes, condos and even standalone dwellings located in HOA-managed subdivisions. And because an HOA is simply an organization made up by actual homeowners, the hijinks and rogue behavior can flow in both directions! Â
HOAâ€™s themselves can go rogue, so to speak, by: Â Â Â â€¢Â Â Â failing to appropriately budget for upcoming repairs and expenses Â Â Â â€¢Â Â Â levying unexpected assessments Â Â Â â€¢Â Â Â increasing dues beyond what an owner might think is reasonable Â Â Â â€¢Â Â Â failing to enforce regulations - or being overly restrictive in enforcing regulations - about any subject from paint colors, to flooring materials, to pets allowed and noise controls.
And home owners can - and do - go rogue on their HOAs, as well, including when they: Â Â Â â€¢Â Â Â default on their HOA dues Â Â Â â€¢Â Â Â default on their mortgage payments Â or Â Â Â â€¢Â Â Â intentionally or egregiously violate the same sorts of regulations described above, terrorizing their neighbors and fellow HOA members.
Risk vs. Reward: The risks of defaulting on your obligations to your HOA are steep - namely, your HOA can - and many will - send your past due dues to a collection agency, impairing your credit, and after prolonged non-payment, they can even foreclose and repossess your home. Similarly, violating your HOAâ€™s formal rules, even if you think they are unfair, is foolhardy - it can result in a range of issues from a daily fine for having an impermissible pet to a court order requiring you to pull out the hardwood floors that were barred by the HOA guidelines and which made a thunderous sound in your downstairs neighborsâ€™ place with every single step.
How can you minimize the risk of a rogue HOA? By vetting the Association completely before you buy, which includes a complete reading and review of the lengthy HOA budget documents, account statements, insurance certificates, board meeting minutes, newsletters, regulations and other documents every HOA homeâ€™s seller is required to disclose to a buyer, by law. Â Talking to the unit or homeâ€™s neighbors, and understanding how many units are delinquent on their dues or in a state of foreclosure doesnâ€™t hurt either.
Your better bet, if you disagree with the fairness or wisdom of your HOAâ€™s rules, is to apply for an exception or contest the rule, publicly, via your HOA Management company or an appeal directly to the board. Truth be told, your best bet in avoiding HOA Hijinks overall is to read the newsletters and board meeting minutes, attend board meetings, stay in touch with your neighbors and even run for a board membership.
ALL:Â Have you ever witnessed real estate gone rogue?
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