The Role of Professional / Expert Advice When Buying / Selling Real Property

First – a bit about me – I am an “Appraiser” by profession and have been accepted as an “Expert” by various tribunals, hearings and courts in the field of valuing real property of various types. I am not an expert in law, engineering, marketing or finance, but have worked with people in all of these professions as it relates to real property issues. I make the following comments as an “Expert” in the appraisal (real property) field and having a general knowledge of the role other professionals play, from working with them over the past 20+/- years, in the process of buying/selling real property:

  • What is a “Professional”? Common dictionary responses include, “relating to or connected with a profession”, or, “a person engaged in a specified activity as one’s main paid occupation rather than as a pastime”.
  • What is an “Expert”? Again, dictionary includes, “a person who has special skill or knowledge in some particular field”, or, “having, involving, or displaying special skill or knowledge derived from a combination of training, study and experience”.
  • Does this mean all “Professionals” are “Experts”, or “Experts” Professionals”? I suspect we all know someone who holds themselves out to be something they are not, or someone that works in a field that they have limited knowledge in etc.

Keeping the above thoughts in mind, who are the professionals/experts that you may use when buying/selling real estate? In varying degrees, depending on your scenario, I suggest the following are fields of study (in no particular order) that could assist you:

  • Legal – assist with ensuring the rights you have negotiated – typically by a lawyer.
  • Marketing – assistance with marketing your property or researching other to buy – typically through a realtor.
  • Valuation – assist with determining value relative to what you are prepared to pay – typically with an appraiser. Appraisals may be required to obtain financing.
  • Survey – assist with securing a real property report, structural study etc. – typically by a surveyor or engineer.
  • Financing – assist with financing a purchase – typically mortgage financing through a bank/lender.

Back to the original topic, do you need these “professionals”? Well, I suggest it depends on your training and experience – understanding that some of your needs may be linked to others. For example, if you require financing, regardless of your knowledge of appraising or law, your lender may require an independent appraisal and then legal expertise to register ownership and various interests with land titles, etc.

I believe that the key to a successful real estate transaction includes using the “Expert Professionals” that benefit you the most. I feel that there are two main steps in this process:

  1. Finding “Professionals” that really are “Experts” in their respective fields of study, and;
  2. Listening to these experts on the issues that pertain to their fields of study.

While it is true that the various disciplines will have overlapping areas of study, I suggest being careful to rely on the correct professional for any one issue. For example, I don’t believe you should solely rely on marketing advice from a lawyer or appraiser, or a realtor for valuation advice, or your surveyor on lending advice, etc. In addition, always ask yourself what the motive of the professional is? – is their bottom line affected by the guidance/advice/report they give you?

In summary, if you are buying or selling something that you really don’t care what it’s worth, then why waste time or money getting professional/expert advice. On the other hand, if you are buying something that represents a fair percentage of your net worth I would recommend getting “Expert” advice from appropriate “Professionals”.

I remember being told as a young person, “don’t gamble something you are not prepared to lose”. This advice always seemed to make more sense after I lost on a gamble.

Gerry Gehlen, AACI, P.App