It Happens in the Hallways

A client recently reminded me during a particularly critical juncture in one of our current escrows—of which there always seem to be at least one or two unexpected new variables—of the adage that when one door closes, another one opens. “But what they don’t tell you”, he added, “is that it’s Hell in the hallway”. 

When most people think of real estate transactions, they assume it’s all about assisting people in their journey out their current door or into the next one. In contrast to this perception, I have experienced that much of an agent’s time is actually spent in the hallway, helping keep their client’s experience from becoming unnecessarily stressful, while navigating the inevitable bumps in the road, helping them attain their objective, or in some cases helping them avoid a catastrophic loss. And what differentiates a good experience from a bad one often comes down to how things are orchestrated in the transition between those two points.

In the Residential realm, this can include ordering reports and inspections up-front to get an early read on factors for which the parties may have otherwise been unprepared. Or verifying that vesting and occupancy has been correctly documented for purposes of qualifying for available tax benefits. And a sale contingent on the sale of the buyer’s property, especially when linked by a daisy chain of other transactions can put a lot of people in the hallway!

Another dynamic that occurs in the halls of real estate is the transition between the people moving in and the people moving out, where sometimes negotiating an early possession or free leaseback can make both parties’ move to their next property that much more manageable. Here, details like last minute cleaning or perhaps a fumigation and final repairs done before getting belongings moved in, and the very logistics of the move itself can all be made more manageable by working with the right team ahead of time.

In Business Opportunity sales, Change of Possession to the new ownership often doesn’t coincide with the Close of Escrow due to processes which can take multiple months, such as the transfer of the ABC permit for a restaurant. If the parties are open to it, the buyer can take possession under an Interim Operating Agreement while the escrow is still open, provided the Seller doesn’t need their funds right away. Or in the case of a specialty trade, a Temporary Management Contract might be negotiated allowing continued operation of the business under the outgoing owner’s license if the new owner needs time to get their licensing cleared.

During transitions such as these, all involved parties and by extension their agents can end up associating with each other in the hallway for extended periods of time, so it is crucial that these temporary arrangements are well thought out with contingency plans in place. And it’s details like these that help ensure things are both properly documented and coordinated until everyone is able to get safely through the door and on to their dreams.