It is not something we like to do ... obviously. But it had to be done.
We were working with an investor client who was purchasing several investment deals. Upfront we had several weeks if not a month trying to get the builder to get clear on their investment model. Initially our team identified red flags about the deal in which we shared with our client. We gave him advice on how to structure his contract so that he could protect his credit and ran through each red flag as if we were to participate in the deal ourselves. We even went as far to express that if it were our money we would not move forward. Keep in mind we are the lenders.
Whether the client didn't believe us or he just wanted to drink the cool-aid... he still wanted to move forward. We are not talking little red flags.. these were huge red banners. We even went to the Realtors who were representing the investor and voiced our concern. Of course we want to make a commission but if we see our clients walking towards a big black hole... WE WILL ALWAYS YELL STOP!
To say the least we were absolutely disappointed by the so called "investor friendly" Realtors. I just don't understand why you would not have your client's interests ahead of your own. Why be so short minded and focus on their $12k commission instead of focus on doing the right thing for the client. The commission will always follow ALWAYS.... And usually (not this case) 10 fold. I don't know about you but I like to sleep at night!
So we moved forward with the deal (after some red flags were addressed) and came all the way up to requesting the loan documents. Right before we were to close we were asked to reduce out commission by the builder and buyer so that we had to take money out of our pocket to close the deals (if you factor all the time we had already invested). AFTER 3 MONTHS WORKING ON THESE DEALS - because the builder could not get it together. Their promised return on investment was not there so they asked us to pay for it!! Basically what happened was the client went behind our back to work directly with builder and find alternative financing (witht he builder) who would do these deals for "almost free". This was so disappointing to us since we felt we did more for the client than the Realtor who represented him.
Looking back we should have never got involved. To say the least we will never do business with the Realtor again and the client is now on his own.
The fact is clients like this need to be immediately addressed. They suck up your time energy and money and rob your other clients of the service they deserve! I would much rather work with someone who appreciates our work and know that we will always keep their interests ahead of our own.
So we wish the client luck and hope the deal goes well for them. As far as the Realtor partner.... no comment!
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