Fall Real Estate 2006

Publication Date: Friday, October 13, 2006

Creating a win-win situation
Mediation lets both parties find a positive resolution

by Cyrus Hedayati

It happens every day: Someone buys a house expecting the best, and finds the worst. It could be a loose pipe, a rickety staircase or a rat-infested basement.

In her more than 25 years of experience as a mediator and an arbitrator, Nancy Neal Yeend has seen many angry homeowners file "failure to disclose" cases; few have ended happily in court, or in arbitration.

"A buyer and seller have a dispute, they go to arbitration, but neither one is happy with the decision. That happens. Even if you win, you're not always happy with the decision," she said.

Instead of choosing methods that require a winner and a loser, said Yeend, Realtors should choose mediation, where the opposing parties work together to find a resolution with the help of a neutral party.

At a recent Palo Alto tour meeting of the Silicon Valley Association of Realtors, Yeend spoke about the benefits of using mediation to settle property disputes, as well as tips for handling it properly.

A mediator for the Los Altos-based Silicon Valley Mediation Group, Yeend has written articles and lectured on mediation, an alternative to long, and costly, court trials. Mediation can be requested to handle almost any kind of dispute, from divorce to noise complaints to lawsuits. Recently, mediation has become a popular method for resolving property and real estate conflicts, she said. It requires the two opposing parties -- or their lawyers -- decide on a mediator who oversees a negotiation between the two.

"When people are in high emotional states, like they're angry or upset, or it could be that they're depressed, they cannot listen. Their brain is so caught up in the anger and the emotion of the event that they're not able to listen," Yeend said. "One of the things the mediator does is to allow the two parties to hear each other better."

Mediation's collaborative nature, she said, makes it a superior alternative to arbitration, another common practice to settle property disputes. Arbitration more closely resembles a trial, with an arbiter hearing the complaints from the two parties and making a final decision. For homeowners who want to control the outcome of their case, this can be a nightmare, Yeend said.

"If the people in dispute want to retain control over the outcome, mediation beats arbitration every time, because if you arbitrate, you're choosing for someone else to say 'this is your fate, the way I see it,'" she said.

Mediation is also more likely than arbitration -- or a trial -- to produce a solution both parties will adhere to, she added.

"If you and I have a dispute, and we mediate, we have a higher chance of carrying out the settlement because we crafted it," she said. "It's like a child: If you make them do something, they're much happier to do something they came up with."

Binding arbitration, Yeend said, is even more risky than a trial because the decisions are almost impossible to appeal.

"It would have to be something egregious. You would have to prove that the judge was mentally disabled, or took a bribe, or something like that," she said. "If the arbitrator made a mistake, that's not grounds to overturn it. But if you were a judge and you made that mistake, you could appeal it."

Yeend got interested in property dispute cases while she was a real estate agent some 27 years ago.

"I was fascinated in why some people get into conflicts and other people don't, so I took a lot of courses and got trained as an arbitrator and got so into it that I made a career change," she said.

One of her most important tips, she told Realtors, is to know who your mediator is and how much experience he or she has.

"Your dog groomer has tighter requirements than a mediator in terms of practice, in terms of experience," she said, adding that mediators should have at least 40 hours of training.

Often times, said Yeend, those going into mediation will accept the choice for a mediator from the other side without investigating it, which could lead to a biased decision. Letting a lawyer decide the mediator could also be a problem, she said.

"Like picks like. They'll pick another lawyer who might not have the knowledge of your field," said Yeend.

Another important tip is preparing information and evidence for mediation, and making sure your lawyer is also prepared.

"The attorneys think 'This isn't a real trial; I'm not going to waste my time,'" she said. "If you can't exchange information, you can't negotiate."

But Yeend's final, and most important tip, was that mediation requires good negotiation skills -- and good listening.

"In mediation, listening is definitely a skill that is rewarded," she said.