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A lesson learned after my first client was sued.

By
Real Estate Agent with DeLex Realty

The year was 2004 and I had just earned my real estate license.

Following Mom's advice and not knowing any better ideas, I took on a few floor shifts at my local office. Actually, at this particular location, floor time had a fair chance of working out as the office was on a busy corner in a retirement community.

My first client walked in

The third day of working floor time, the husband and wife that would be my first client walked in the door. They were a nice couple, recently retired and wanting to sell their home in a beach community to move to Sun City so they could be close to their son and grand kids.

I searched and searched, finding them a very nice, gated lake front home.

They made an offer and it was accepted. It was a cash offer as they had intended to finance their home on the beach to pay for the purchase of this new home, selling the beach home later. They gave $1,000 earnest money and left my office that evening excited.

I put them in touch with a loan officer.

The loan officer called them and explained their loan options. He called me later that day and explained while the wife was very excited, the husband was less than enthusiastic about the purchase and moving from the beach.

The inspection period came and went

In Arizona, the inspection period is ten days. We had the home inspected, found no real problems, requested some minor repairs from the seller who quickly agreed. We were on our way to close of escrow and I had cashed the commission check a thousand times in my mind.

The husband became very, very unenthusiastic about leaving the beach

Ten days or so before we were set to close I received the call. "I am not buying the house" the voice on the phone said (I could hear the wife in the background sobbing). I warned the client they could be sued for specific performance, he said he did not care and would not move, hanging up on me.

The seller sued my client for specific performance.

My client was sued and paid the seller $50,000 in damages. Both my designated broker and myself tried to talk the client into closing on the deal and offered to then immediately sell for no commission. He declined and paid the $50,000.

A buyers agent is more than just a representative of the buyer, you are there to ensure a smooth transaction and relieve concern and anxiety through your knowledge and reassurance in the process.

While real estate transactions are common place to Realtors they are far from common for the average person. People get scared with change, especially right after a major life event like retirement. I look back and believe today, with my experience and knowledge I could have been better at walking my clients through this process. I learned the hard way that you really need to understand that buying a home is foreign for most people and it scares many. It is full of anxiety and it is the real job of a Realtor to alive that anxiety not simply process the transaction.

Posted by

James (Jim) Lord

jim@jimlordregroup.com

www.jimlordregroup.com

480-648-3378

Lottie Kendall
Compass - San Francisco, CA
Helping make your real estate dreams a reality

Wow, Jim, that's a tough first transaction. Actually, it would be tough if it were #100. I hope the rest have been much more smooth.

 

Mar 10, 2017 08:13 PM
Jim Lord

Yes it was and they have been. Tough way to break into the business. However, I have sold many millions in property since and have only had one buyer who almost did the same thing but we were able to talk all parties off the ledge.

Mar 10, 2017 08:21 PM
Thomas J. Nelson, REALTOR ® e-Pro CRS RCS-D Vets
Big Block Realty 858.232.8722 - La Jolla, CA
CEO of Vision Drive Realty - Coastal San Diego

Thanks for sharing your story. I had a client threatened a lawsuit for the first time last year, but the letter of intent to sue scared the seller to perform.

Mar 10, 2017 08:55 PM
Jim Lord

I have actually has several over my career become involved in lawsuits (thankfully no one every involved me directly) but some people do some silly things thinking, well to be honest I do not know what they think. I also work (very part time) as an expert witness for real estate lawsuits (I worked in law enforcement and have a Criminal Justice education so I had a few lawyers approach over the years to be an expert witness) and it is CRAZY to hear some of the stories of what people have done in real estate transactions.

Mar 10, 2017 08:59 PM
Praful Thakkar
LAER Realty Partners - Burlington, MA
Metro Boston Homes For Sale

Jim Lord - a great lesson learned. We can do only this much, correct?

Love this -- "A buyers agent is more than just a representative of the buyer"

Mar 10, 2017 09:25 PM
Jim Lord

Praful, thanks. I have had a lot of strange, tough and unique transactions in my career. I do a lot of volume and I guess that is just par for the course, however I will say I have learned a ton from each one. Mostly, quickly in my career I realized that most people only buy a home a few times in their lives, it is a scary transaction for them and it is our duty to get them all the way through it, not just through the standard real estate laws and contracts; They should explain that in real estate school.

Mar 10, 2017 09:32 PM
James (Jim) Lawson, DBA
DomainRealty.com LLC - Bonita Springs, FL
Broker Associate, RSPS, BPOR, HI & PE

Sad story Jim. Never know what's going to happen especially when buyers are under contract but not on the same page. Logic doesn't always prevail.

Mar 10, 2017 09:29 PM
Jim Lord

There was NO logic with the husband. He just went from agreeing to move to AZ to there is no way I am moving. They were not wealthy people and it could have worked out if they had bought and sold, they may have even made money in 2004 but he would not budge and would not listen to anything. I was told by the sellers agent, she was told he was that way through the entire lawsuit with the owner, which she said was fuel to him suing.

Mar 10, 2017 09:35 PM