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Crybabies and Busybodies...

Avoiding a Lawsuit with a Database?

The Ending of a Thriving Real Estate Career...

Caused by being sued from a disgruntled seller or buyer over a real estate transaction happens. We live cry baby in a highly litigious society... that is a reality! There is a growing tendency to not take personal responsibility for what happens in your life unfortunately. Some people what to blame someone else for their mistakes, or lack of just about everything in life. People are always looking for an "easy" way to get rich by suing someone for just about anything and everything that happens to them. Remember the person that sued because the coffee was too hot, and they got burned? Come on, grow up take responsibility for what happens in your own life, and stop blaming the other person. However that is not reality, our society is full of crybabies and busybodies. They think they are a victim who everyone is "out to get", they want to cry about what they see as all the injustices' aimed just at them. Our society is also full of the type of person who wants to tell everyone else how to live their life. There way is right, and everyone else is wrong. They don't know the meaning of "live and let live", unless of course you do it, "their way"! Enough already, take responsibility, and as long as someone is not causing damage to others, leave them along to live their life as they choose.

In the recent Active Rain contest, Makeover 2 Takeover there was much said about the benefits of having a good database, and which software was best. In my opinion the two most important reasons to have a database were barely touched on, or not at all. #1, a large data base that has been worked correctly and is well established is the only "salable" asset a Realtor has, should they decide to leave the business. A database should produce at least 10% of the total number of people in it transactions per year. If you have a 500 person database you should be able to expect to close 50 transactions every year, just from the database. #2, which was not touched on at all, is a great database will not keep you out of a lawsuit, but it will make it highly likely that you win should you ever be sued.

A great paper trail is your best defense in a lawsuit, especially when it comes to a real estate transaction. Texas is one of the states with the highest lawsuits filed in the US, and used to be a lot worse. There has been a lot of reform in Texas, but we have a long way to go. Our laws are weighted in favor of the consumers/claimant. The defendant has to prove they did no wrong...hence our cost of doing business is very high due to E & O Insurance (Errors and Omissions insurance). It's something you must have or you could find yourself out of business overnight. Lawyers know we have it, and they know what the dollar limit is, so they sue you for ten times the amount of your limit, and settle out of court for a lot less. You still have lost time, attorneys fees, and all the other cost and emotions that occur when you are sued.

In 32 years of doing an extremely high volume of real estate transactions I have only been sued once...yes I just knocked on wood. That's a damn good track record that I am thankful for, especially in these litigious society and times of ours. The case which is a post in itself was filed against me by a buyer who claimed we failed to disclose defects' of the home he bought. The really weird part is this was a past client of mine and he used to own the home he brought, and in fact had had it built originally! I helped them in that transaction also several years before. I also had sold the home for them when they got transferred. I had it listed when the people who bought it from them got ready to sell, and strangely the original client of mine was being transferred back to Houston. I of course had been in touch all this time, as I am with all my past clients. I knew they were coming back and wanted me to help them find another home, our fourth transaction together. I let them know what they had always referred to as their "dream home" was back on the market. Obviously they knew the home; they build it, and lived in it for several years. They did not even want to look at other homes; they wanted to buy back their "dream home", yippee. Well these people had been in many lawsuits over their lives, I guess I should have know "I would hit their sue happy list one of these days", and I did...about four months after closing I got "the letter".

Needless to say I was highly insulted, frustrated, angry, and innocent. None of that counts in a lawsuit, rsk in selling real estate or in our judicial system. It's not who is right or wrong, it's about what makes more financial sense to the insurance company. Is it cheaper for them to "settle" the lawsuit or fight it? Nine times out of ten they settle, and you have no say if it is within your deductible. The attorney for my E & O Insurance company said, "I have never seen a real estate agent that had as much or better detailed information as you do. If more agents would keep files like you do, we would see far fewer lawsuits". Yes they are still in my database; however their "contact type" has changed from past client, A client, Listor, Buyer, Christmas list, and Best Client to, S___ H___. Fortunately that "contact type" has very few entries in it.

Be 100% honest, build your real estate business on the Golden Rule "Do Unto Others As You Would Have Them Do Unto You", so ask that question in every real estate transaction. Keep detailed records and information in your database about every client and transaction you do. Keep way more than you think you will ever need and keep it forever, you never know when you might need it. Not only will a great database help you make money, it will help you KEEP IT.

To find our the latest on Active Rain's contest, check out Pre-Listing Package week 2 challenge, bringing in our A game...Team Tex-La...It's a great challenge again this week, and TWO TEAMS will be eliminated this week, so it's really A-GAME ON.

Liz Carter, owner/broker Liz Carter & Team Realty. Serving Katy, Sugar Land, and the greater Houston Texas areas since 1976, Call 281-391-SOLD (7653) or 800-783-4041. WWW.lizcarter.com

Referrals Appreciated!

Posted by Liz Carter,Broker/Owner of Liz Carter & Team Realty, Katy TX (Houston) on 05/29/2008 01:17 AM

Comments (51)

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51 Comments on Crybabies and Busybodies...

MAY

2008

Liz,

Yes, I agree, keeping Good records is the best thing you can do for yourself. Not only records, but Good Records can really make a difference! Good Luck!

Take Care & Have a Great '08!

I better get organizing!

Sylvie and Peter, I just posted this and having a problem getting the PICTURES ON...HOPEFULLY BY TOMORROW THEY WILL BE AND IT WILL READ AND LOOK MUCH BETTER. Please stop back by, thanks Liz

Law suits are scary but I like your point. I came from a corporate back ground many years ago. CYA was important then but even more relevant now that it is my well being on the line.

Documentation is crucial in all professions. Great job in following such good advice!

Liz,

Thank you for the GREAT advice.

Don R.

Very true, Liz. I do think I commented on this on a blog, how your data base is your future. If it is good, updated and followed it is your exit strategy. You have something to sell, you can track your sales from it, each year. Past clients, SOI, leads, and know how much business you are getting from it.

I've only been sued once too, I was eventually dropped, but not without paying the right of first defense. Good record keeping is so important.

Great advice Liz, Thank you for sharing.

Liz - I will readily admit that this is not my strong suit. I have been in business over 11 years, and I haven't been sued, nor have I been involved in a mediation. I pray that this continues to be the case. This was a great post with some solid tips!

Melody,

You know how important it is, however I'm afraid too many agents don't. Based on what the attorney told me, very few have any, especially in an organized way that Top Producer does it. It sure was nice to be able to pull up the contact and print up everything that had happened over the last 10 years I had been dealing with them. Took a lot of pressure off. Liz

Liz, What great advice you just offered up! PLUS, if we ever want to sell our business, we can just "hand" it over, just as you said! I did state that point in my "thesis"...(always trying to figure out how to make a buck in the long run, lol)....Game on for this weeks challenge!!!

Liz - Many people will put off building the database ,but once you do it is easy to maintain. It is a very important function to grow your business. Organization and being consistent is important in my opinion.

Howdy Liz

I have a separate computer for writing my reports, along with keeping

all my detailed records, and info about each and every client on.

Just like the one I am useing right now is only for doing my online business info on.

Liz you have gave everyone some very good advice, to do.

God Bless The U.S.A.

Hi Liz, you'll hear from my lawyer. :)

Liz, my sister got caught in one these frivolous law suits. It was incredible what she had to go through and the amount of money she had to pay out. The problem is that anyone can sue anyone at any time for anything. I was almost sued once in another business but we had our attorney send a few letters and were able to resolve the matter. That was when I learned that we live in a sue happy age. So far I have been fortunate in real estate. I would prefer to pass on a client that gives me that sue happy feeling.

MAY

2008

Great reminder to USE that database we have built. I'm trying...diligently. Got to add a newly executed contract today.

Vanessa, you got that right, even if you are innocent! It also takes a lot of your time, not to mention the emotions that drain you. Liz

Don, your welcome. Liz

Missy, I'm sure you did, there was so much information going on, of course this never hurts to be repeated, again, and again, and again. It happens and it's not pretty. Liz

Ricki, Miss you girl, hope all is going great guns for you up there in the beautiful hill country. Liz

Jason my friend, I hope so too, but start keeping better records...it happens to good guys too :). Liz

Elizabeth, I'm sure you did also, guess I should have rephrased that part, but as I said to Missy...It bears repeating. Liz

Carl, so so true, and agents are one of the worst about those details...focused on doing a good job and being a great salesperson. Liz

Dale, yes Inspectors are up there on the front lines too, in fact this dealt mostly with the inspector that they choose, but had been on our list. This guy had some balls, I really do need to write a post about it. He not only picked the inspector, but had know him for years, he was their exterminator when they lived here before for many years! Oh well, as the world turns, Liz

Superstar Josh, very funny...you need to hang out more with Jason, Alan, and Paul they all have very sick sense of humors too, Better watch it, I'll give you extra homework to do! Coach Carter

Hey Partner, haven't heard from you in awhile, you must be busy selling real estate :). Sorry to hear that happened to your sister. Yes, I should have know better with this guy, but we had such a strong relationship, FOUR homes I sold them, and had know them for many years, and they had sent me a ton of business. It seemed like every time we sold a home for them there was a lawsuit going on and had to be cleared up before we could close. He had sued the builder over the stucco when the home in question was built originally. They fixed it, and he sued them for some other things he had to drop when we sold it. Then we he was coming back the loan keep getting delayed till finally the loan officer said he was in the middle of suing someone in the state they were coming from and it was affecting the loan. He finally dropped that one so he could close on the house. A hard lesson learned. Liz

CORRECTION...THERE WERE apparently several mentions my two top reasons for having a data base...I think they are both worth repeating. Liz

Great post! i am new to this site but have been in real estate for 20 years and have never been sued. What has kept me out of trouble is first my passion for ethics, ssecond, disclose everything even if it will cause you to lose a sale--better a lost sale then a lawsuit!

Thanks for the excellent post. I needed to be reminded that the database is the only real asset we can sell when we "retire". Keeping records religiously is definitely required.

Aida

Thanks and welcome to active rain...you will love it here, it's kinda like "home away from home". Let me know if I can hep you in anyway. Liz

Michael,

Yes it a good reminder for all of us...me too. Liz

Yes....sue happy is the way things are these days...my sister had a landlord in California who made a very comfortable living from suing people. While it is a whole different blog...realtors should remember the "do unto others" as it applies to other realtors. "I am working with...." means hands off and have a nice day...We can get hung up on pieces of paper...let's work on being honest,. humane,decent human beings and improving our industry's reputation as a whole.

Liz, I don't know who told me this, but I have lived by this mantra: "He who has the most paper wins" - Another way of saying "keep detailed records". That's one of the reasons I now use my cell phone exclusively for business (detailed billing statement with every phone call, incoming and outgoing), and do most of my communication by email, so their is a GREAT paper trail of communication. I even have consumers fill in forms in their own handwriting, instead of doing it for them, for the same reason. This is my way of compensating for being a bit sloppy about filling in every detail on the database, which I should do in an ideal world. Fortunately, I've never been sued nor had a complaint filed against me in 30+ years, but I'm "ready" with documentatio if it every happens.

Liz: FANTASTIC post! Your reference to the McDonald's hot coffee incident sums up our SUE-HAPPY world we live in. Someone always out to make a buck by taking advantage of someone else. We (Realtors) can never be too careful.

...paper trail...paper trail...paper trial...

Risk Reduction notes.... the key to solving disputes! Great post and certainly helpful to all. Thanks for the reminder.

Excellent post---I also loved your graphics. With email being so prevalent in our transactions, it's really not that difficult to keep good reconrds today.

Nad the great thing about the technology bend in our industry is that now, better than ever before record keeping can be made electronic and can take up MUCH less space. We are currently shifting toward electronic archiving. I have not made the full move yet until I have a foolproof storage method, but I am close! Record keeping in ANY business where you deal with the public is a must, especially in real estate!

In my 30 years I've been sued twice. Once I was named in a "who gets the earnest money" suit just because I was there. The judge dismissed the suit regarding me and split the money 50-50 between the buyer and seller. It was my listing and my seller still thinks she was robbed. I think she was very lucky to get 1/2.

Second time was over one of my listings and alleged failure to disclose. When we produced SEVEN different documents in court that said buyer was buying "AS IS" and had opportunity and time to make any and all inspections they wanted, the judge said: "Why are we here on this case.........dismissed."

A great, CYA book to own is "The Digital Paper Trail" by Oliver Franscona. It is full of forms, clauses, letters, and email to keep you out of trouble in your real estate business.

I've been wondering about how long I should keep records. Meaning, what is the (what is that word!!) longest amount of time they have to sue if they are going to sue. Because if they only have a year or 2 then I don't need to keep the records for 10, ya know what I mean. I guess if I switched everything to electronic then I wouldn't have boxes of files. I will look into that. Thanks for the info!

I'm now involved in a lawsuit. I never thought I would be. However, in this case I agree with the suit because it may be something that changes the laws and procedures and saves a life or lives.

My mother in law was taking a drug. The drug was recalled. Currently, the evidence points to the fact that this imported drug (which was twice the dosage it was supposed to be) was the cause of her kidney failure and subsequent death last year. If this suit makes them change the procedures so that drugs are scrutinized more closely before being put on the market then maybe there won't be another person killed because they trusted the FDA and pharmaceutical companies to screen what they/we are putting into our bodies. To me....what happened here was a case of my mother in law taking a pill that she thought would make her healthier when in fact it was poisoning her. Whose fault is that? That is to be determined in the court system.

But regardless, you are right, frivelous lawsuits are abundant and you have to cya.

I teach my students to have high integrity yet, CYA by keeping CRON logs and documenting incidents that fall outside the norm.

Personality is non-existance in today's world.

Liz:

A former title rep and ex-real estate agent who has gone on to being a motivational speaker, in her seminars she tells of a lawsuit she was in 17 years after she had gotten out of the real estate business. The suit was over disclosure and fortunately she did keep good records. But she had to go and pay for an attorney she no longer carried E&O Insurance and her broker had move out of area. Due to her record keeping she was cleared of any wrong doing but, she warned us that you can be sued many years later and to keep up your E&O Insurance, along with an excellent paper trail.

NOTE: Off the top of my head I think the is no statute of limitations for being sued under the statue of "Fraud and Deceptive Trade Act", I am going to double check with TREC and will add that to the post. It is so very important, up there with an IRS audit, I would assume...Not ever happened to me, and yes I knocked on wood again :).

I should have included that thanks for bring it up, Liz hour glass

PLEASE CHECK BACK AND i will have that added.

Sally & David, yes that is what these people were. I tried to find out how many times they had sued someone but was not able. I personally know of SIX TIMES, Lord knows how many times they brought such grief into someones life...all for the sake of MONEY! Liz

Margriet, using you cell phone exclusively for all you real estate transactions is a great idea! I use a head set and tried the blue tooth thingy but never could get used to it. I think it's in the bottom of my purse :). Liz

Kat, YES, YES, YES. Liz

Allison, you are very welcome, I hope it helps someone. Liz

Liz, now S--- H--- was not one of the categories in my database! I usually delete them before we get that far!

statute of limitations....that was the darn word I couldn't remember this morning!

Hi Liz, I just saw Cheri's comment about the records. I asked that question about a GRI class and he told me to keep them until they were dust.

Cheri'...

Did you guess what it stands for???? S---H--- ? Everyone needs that category in their database. Not sure how we came up with that particular word, but it fits the people in it. Great question for everyone...do you have a category in your database for folks you no longer want anything to do with, but need to keep for the records, paper trail, and what is the name of your contact type?

What is the name for your contact type in your database of past clients who you need to keep, but will hopefully never talk to again the rest of your life?_____________________

Marchel, your instructor was soooo right, keep-um till their are dust, which hopefully happens before you are

MAY

2008

Pat, every Realtor needs that one :)

Cheri', don't you hat it when that happens, it drives me crazy! Glad I use the one you were looking for.

Kratz, it's nice to hear about a good outcome, thanks.

OK you got me on CRON????

Jim, don't you just love being involved in those! No one is every happy, wish it was just give the earnest money to the seller, and let it be between just them. Thanks for the book recommendation, I'm always looking for a good book.

Steve, wow remind me to talk to you about what system you are using, I would love to get my office totally paperless, or close to it. We were supposed to have been there 10 years ago, what happened? :)

Great article; you're right, good records are the key.

MAY

2008

Sheila,

Yes they are and I think Top Producer is the best database for that. Among all the other great things it does. I need to log on to TREC for the answer about how long, but I'm pretty sure it's forever. Liz

Liz ~ You touched on some very good points. My database has saved me more than once. I say document everything! Some call me the Queen of Documentation, LOL. Great post!

JUN

2008

Darleen, good for you...be sure to keep it up. Liz

JUN

2008

Liz, great post. I think I'm going to go back and edit the post I wrote last night and link to this one of yours....I've about got my BBQ entry ready to be posted. Later today hopefully.

Keep up the great work.

Sondra, can't wait to read it...be sure and let me know where it is? Yes, I wrote mine last night and will be posting shortly. L

well, I think there should be a statute of limitation on it. I mean come on....someone lives in a house 10 years and then sues?!? That is rediculous.

Cheri', it's like the lawyer told me..."justice has nothing to do with right and wrong, but is just the law". Not fair for sure. Keep good records! Liz

JUN

2008

I try to write down every conversation I have with a person and I add it to my database contact portion. It dates, time stamps it and says exactly what was said and as you said it saved you. I'm hoping to never have to use mine, but I'm prepared if the time should come.

JUN

2008

Todd that's great, and it will save you, but as you said, hopefully that day will never come. You sleep better at night this way :)

JUL

2008

Liz have I got a story for you!

Unfortunately I can't tell anyone about it for some time. Let's just say a 'stager' who lost a job to me has gone out of her way to cause trouble for me and the owner. I can't even write about it as she is now monitoring my blog here on AR. Thankfully the owner sees what is happening and has supported me and told me about the crap this woman has been trying to cause me.

We have some strick laws on competition here in Canada...I don't think she is aware of them though. Not the route I want to go but...luckily, the AR Gods keep records of everythingtaking place on their servers and our blogs.

And thankfully I can grumble about it here in hiding on your blog! What is it with crybabies? You'd think they'd go off in a corner to be alone...instead they try to make your life miserable.

JUL

2008

In my 30 years of practicing real estate I've been sued twice and prevailed both times.

One time was so clearly bogus the judge dismissed my portion of the suit prior to trial.

On the second go round I had lots of pages of documents the buyer had signed relating to "AS IS" that the judge found to be a huge plus in mine and my seller's favor. That case was dismissed also.

There is one other saleable assest that you can exchange for cash in addition to your database and that is an income producing website you can document business from. I've already had offers for mine but it's not for sale.........yet.

Jim...

Glad to hear you prevailed both times. Even when you win you loose, because of all the time and emotions that go along with it. It's such a shame we live in a society that has become so ready to blame someone else for all that happens in life, it's really sad. Newsweek or Time had an article titled the same as mine and about people not taking responsibility for anything, and wanting to tell everyone else how to live their lives. It was great, I kept it for a very long time and now cannot find it. It was so well written and I agreed with everything in the article, had wanted to keep it forever since the Arthur said it so much better than I could ever dream of doing. One of these days I might try to archive it, but can't remember the year either.

Glad to hear you've had an offer, you must have your business set up very well. Best of everything this year, would like to hear more from you. Liz

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