Here's the scenario.......Listing Agent has a million dollar listing in a high end community. The property is still owner occupied and is filled with extravagant and expensive furnishings. An unrepresented Buyer approaches the listing agent and gives her an exciting story about winning the Colorado lottery. She also mentions how she has made it her life mission to adopt homeless children and give them a lifestyle that supercedes the one that they're currently living. She needed an opulently spacious home and this property fit the bill. The listing agent was delirious at the prospect of selling this property at FULL PRICE within a very short listing period! She immediately went to the Sellers to inform them of the potential buyer. She showed the property to the Buyer and she immediately submitted the offer on the home. The sellers were thrilled to have a full priced, as is, short due diligence, cash offer, so they immediately accepted all terms and became binding with the Buyer.
After a few days, the listing agent received a call from her Broker advising that there was an issue with the Buyer's earnest money deposit. It appears that the Buyer wrote the check on an account that had been closed and the earnest money deposit was no good. Instead of the listing agent immediately notifying the Sellers that the contract was voidable, she contacted the Buyer and tried to talk her into providing a viable check, so that the contract could remain valid. The Buyer apologized profusely and arranged to meet the listing agent with another earnest money deposit. The second check was not honored by the Buyer's bank. The listing agent's heart sank and she tucked her tail to notify the Seller.
The Seller hit the roof and had a bevy of questions for the listing agent! First of all, she wanted to know why didn't the listing agent verify the Buyer's ability to purchase the home even before showing it! She was furious that the listing agent allowed an unknown individual to enter her home and even more disturbed to learn that this woman was being investigated for fraudulent activity! Secondly, she wanted to know why the listing agent had not notified her when the initial problem arose, so that she could have taken necessary steps to protect her home and her family. Needless to say, the listing agent lost the listing and the Seller filed a complaint with the agent's Brokerage and against the agent with the local Board of Realtors.
The lesson??? Never take anyone at face value in a real estate transaction. This situation could have easily been avoided had the listing agent followed basic real estate guidelines. It's up to us to give our clients the FULL benefit of our knowledge, expertise, and services.
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