By Vanessa Saunders – Founder & CEO – Global Property Systems
Real estate, often described as a delicate dance, feels more like navigating a complex maze, especially in diverse markets like New York State (NYS). From deciphering terms that vary by region to understanding the nuances of escrow vs. deposits, buyers and sellers find themselves amidst a sea of conventions. Paired with ethical concerns and unique regional practices, the quest for clarity becomes paramount. Could emerging technologies like blockchain be the answer?
Deciphering Real Estate Terminology: A Regional Perspective
Accepted Offer: This kicks off the real estate dance. While a seller has accepted a buyer’s proposal, it isn’t legally binding. Homes may still be shown, and other offers may be considered. Intriguingly, in parts of NYS, escrow doesn’t immediately follow this step.
Under Contract/Sale Pending in Hudson Valley: Here’s where regional nuances come into play. In the Hudson Valley, “Under Contract” and “Sale Pending” are often interchangeably used, adding to the confusion. Yet, their MLS indicates “Sale Pending” when contracts are fully executed. In contrast, some regions use “Sale Pending” to mean an offer is accepted, but inspections remain—highlighting the need for regional literacy in real estate.
Sale Pending Elsewhere: Beyond the Hudson Valley, “Sale Pending” can signify that all contingencies, including inspections, are met, and only the final paperwork awaits.
Escrow vs. Deposits in NYS
While escrow and deposits both serve as safety nets during transactions, their management varies in NYS:
- Escrow: These funds, often nominal amounts like $5,000, are held by a third party until all transaction conditions are met.
- Deposits: A deeper commitment from the buyer, usually split into two—half at contract signing and the remainder at closing.
In many states, brokers manage escrow accounts, but in southern NYS, it’s more common for attorneys to oversee these as a deposit at contract, offering a blend of tradition, expertise, and neutrality. There’s definitely a good and a bad side to this either way you look at things. A discussion with your attorney and Realtor will assist.
Tackling Ethical Dilemmas
The Communication Gap: Buyers may stumble upon their dream home only to realize it’s already under an accepted offer. Such oversights, while frustrating, can also border on ethical violations.
The Bidding War Puzzle: Without insights into the “winning bid,” buyers might overspend. This lack of transparency can hurt both buyers and sellers, especially when dual-agency dynamics come into play.
Dual Agency Dilemmas: Representing both buyer and seller can introduce biases. Though state disclosures mandate transparency, parties must remain vigilant.
Blockchain: Pioneering Transparency in Real Estate
In this case, blockchain, often associated with cryptocurrencies, has nothing to do with them. Instead, blockchain presents a revolutionary solution for real estate:
- Immutable Records: Every transaction step, from listing to sale, is transparently recorded on a decentralized ledger.
- Clear Bidding: Sellers can view real-time offers, ensuring no money is left on the table and granting buyers a fair chance.
- Countering Dual Agency Bias: The transparent ledger sheds light on offers and counteroffers, keeping biases in check.
- Fostering Trust: Blockchain bridges trust gaps, granting equal information access to all stakeholders.
Wrapping Up
In the intricate ballet of real estate, knowledge, vigilance, and technological innovation are invaluable. As market participants decode statuses, navigate regional practices, and tackle ethical concerns, tools like blockchain promise a transparent and equitable future, streamlining the path to successful transactions.
