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They Will Eat Your Young if You Let ‘Em

April 24, 2008

I made a rookie real estate mistake recently. I will not make it again. Here’s the story:

Met some buyers at an open house I hosted way back in September. Showed them several homes and eventually we found one they liked. We put in a VERY low offer and negotiated a great sales price on it thanks to an extensive appraisal analysis I did on the property, justifying our offer with solid market data. Did the inspection and had some issues. The main one being a sky-high radon reading. The sellers had their mitigation system tested. Worked fine. They re-tested. Levels came in very normal. The buyers’ plan was to re-test again themselves using a more elaborate continuous radon test. At the time the buyers were away on vacation, so I took it upon myself to schedule the new radon test. Paid $115 out of my pocket (actually there is another mistake in this story, but that’s another post). The continuous test came back normal as well, so it was decided the initial test was a fluke. We put the radon behind us. The buyers and sellers then went back and forth over some minor inspection issues. Keep in mind at this point we were “floating” the dates in the offer. Although we were out of contract (mistake #3), I was directed that as long as both parties were negotiating in good faith, we should be OK. We got to within a figure that was LESS THAN 1% of the selling price. The sellers were willing to credit back some money at closing and we were talking about a discrepancy of LESS THAN 1% of the sale price. Out of the blue, my buyers decided to walk away from the deal. Didn’t feel right to them any more. Everyone was shocked and I consulted them extensively and strongly encouraged them to reconsider.

They didn’t. The sellers and their agent informed us they would be keeping the $1000 deposit as we were “out of contract”. My buyers flipped out and I worked hard with the selling agent to split the difference and refund us $500. This whole process was excessively prolonged and I didn’t blame the sellers for wanting to keep some of the deposit. I couldn’t give them a good reason why the deal fell apart. To ease the pain and show the buyers that I accepted responsibility for my part of the deal getting messy, I offered to refund them the $500 they lost when we did find the house for them to buy. Shouldn’t have gone out of contract. Shouldn’t have taken this long to get to this point. I then added “I will refund you your $500 regardless of what happens next”. Knowing I had spent a lot of time with these people, felt we had bonded, knowing I had worked my butt off to get them a great purchase price and worked even harder to get half of their deposit back, I figured that I would have no problem contributing $500 of my commission once we found a home for them to buy. And I figured they would appreciate the gesture.

Their reaction was quite different. They fired me and quickly demanded the $500 back. Ouch! After all this time? I thought we were friends? We bonded, didn’t we? You and I both know I said that in the interest of putting this mess behind us and moving forward to your next new home, right? Zip. Nada. Zilch. They are done with me, and want their money back as I promised.

I’m taking one on the chin for this mistake. I am refunding them $385 ($500 less the $115 I paid for the radon test done while they were away). Considering I have yet to earn a check in this business, this throws me a little more into the red, but a promise is a promise. It sucks, but it was the right thing to do.

Lessons learned (and I guess these aren’t limited just to real estate): Dot your ‘i’s and cross your ‘t’s (twice if needed). DO NOT go out of contract, EVER, even if everyone is negotiating in good faith. Don’t ever think the clients you are working your tail off for will not take it completely for granted and screw you if they can. Because they might. Not all will. I’d like to say most won’t, but these ones did. Do what you say you will, but don’t say something you really don’t feel you should have to do. If you say it, you’ve essentially done it.

Live and learn.

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