How Do You Deal With Dishonest Buyers/Tenants?

By
Real Estate Broker/Owner with KEAP Real Estate BRE# 01912137

Photo Credit: www.mainstreamrealty.com

 

Recently I had a referral from a friend of mine for tenant looking to lease a property to open an addiction rehab facility.  As you may know, this is a rather challenging project to work on as many home owners don't like the idea of having their homes converted into a rehab facility.  Therefore, the client offered to pay an additional incentive if I can find a property and a landlord who will accept her application.

The tenant who was referred to me spent more than three weeks trying to find a residential property for lease (through other agents and by herself) AND get an application approved for opening an addiction rehab center.  Well, to cut the long story short, I found it for her in two days.  After many long hours and tons of phone calls, I finally found a property which she liked and the landlord was willing to approve the use of as a rehab facility.

Then, my client told me that she didn't think the back yard was large enough for the rehab.  So we continued our search only to be turned down by many more landlords.  She, then decided that she wanted to go with the property that I got her approved for under one condition that her business partner comes and takes a look at it and approves it.  So, I schedule a second viewing.  We all met, her partner said he loved property and wants to proceed with signing a lease.

To cut the long story short, after couple of days of lagging both myself and the listing agent, my client admitted that she has been looking for other properties and that she isn't going to sign the lease for this property.  

I understand that she is entitled to search and find the property which fits her best interest, but what I don't understand is why she felt the need to lie and play games.  If she wasn't happy with the property, she could have just said so instead of having both myself and the listing agent waste our times with drafting and negotiating a lease agreement.

How do YOU handle similar situations? Do you have them sign an agreement to pay you for your time in advance? Do you charge a flat fee regardless of the outcome? Do you collect half of the incentive they are offering before you begin spending time and then half at the end?  I would LOVE to hear your opinions and your suggestions because I don't want to find myself in a similar situation again.

Comments (15)

Patricia Kennedy
RLAH Real Estate - Washington, DC
Home in the Capital

Amy, it's sure not very nice, but this stuff happens.  Unless you have a client relationship with a signed contract, you just need to move on and learn from this experience.

May 26, 2016 11:22 AM
Amy Palian

Thank you dear Patricia.  Yes, all we can do is move on to the next client and project.

May 27, 2016 03:41 AM
Pete Xavier
Investments to Luxury - Pacific Palisades, CA
Outstanding Agent Referrals-Nationwide

Hi Amy, I've done many difficult leases, including looking for properties suitable for addiction rehabilitation use. I would of liked to have collected a retainer upfront, but either broker rules or the marketplace would prevent me from doing that. A BBA is possible in a lease situation, but your best bet is your gut/intuition for something like this, and than to continually reevaluate.

With most lease prospects, I have a sit down, check credit (the copy of which is normally accepted by the other party) and complete a perfected lease application with everything except the address and the monthly amount offered for a lease property, this alone weeds out the type of prospects that effective and efficient agents should stay away from.

I would also add that finding a suitable property and an owner who is willing to lease to a addiction rehabilitation provider is like finding a diamond in the rough in most markets. Something is fishy here and it's stinking bad!

People who are like this are time wasters, drop them and proceed forward with some more respectful clients!!

May 26, 2016 11:27 AM
Amy Palian

Thanks Pete for sharing your experience and opinion.  I agree with you and hence I have dropped them and have moved on.  I guess I have to learn how to be a better judge of character next time.  I mean, don't get me wrong, I have worked with clients who ended up wasting my time, but this time it was pretty harsh with lies and such.

May 27, 2016 04:39 AM
Mike Cooper, Broker VA,WV, MD
Cornerstone Business Group Inc - Winchester, VA
Your Neighborhood Real Estate Sales Pro

Sadly, that's the nature of working with people. It happens to all of us, and it probably always will. Not that we like it.

May 26, 2016 01:38 PM
Amy Palian

Very true. I just wanted to see if anyone signs an agreement prior to assisting clients with such challenging requests.

May 27, 2016 03:42 AM
Kat Palmiotti
406-270-3667, kat@thehousekat.com, Broker, eXp Realty - Kalispell, MT
The House Kat

How frustrating! It sounds as though you worked your butt off trying to find them the right property. Unfortunately, sometimes buyers or renters flake out and there isn't much we can do about it. Perhaps doing more up front qualifying will weed out more of this type of person, but even that isn't 100% effective.

May 26, 2016 09:06 PM
Amy Palian

Thanks Kat.  Yes, these tenants were very highly qualified.  I guess I am a bit hurt because I wasn't expecting them to behave in such manner.  But all is well and I have moved on. :)

May 27, 2016 04:40 AM
Sham Reddy CRS
H E R Realty, Dayton, OH - Dayton, OH
CRS

If you don't have a feeling that they are loyal, ask straight question and walk away if needed to!!!

May 26, 2016 09:11 PM
Amy Palian

Thanks Sham.  And that is exactly what I did but I guess I felt bad for being lied to.

May 27, 2016 03:43 AM
Clay R. Seay
Florida Homes Realty & Mortgage - Saint Augustine, FL

Amy, it sounds like you have multiple issue with this client. First, they do not seem trust worthy in your eyes, so it is time to have a real conversation with them about thier true goals. Second, it sounds as if they are working with several other agents and the one that finds them the right deal will get paid. You need to have a talk about loyalty, commission only status and maybe this is the right time to ask for a retainer? More inprotantly, it seems you have a client who you don't trust to negotiate in good faith. It is time to re-evalute if you want to continue the relationship or not. A simple statement that you have enjoyed the opportunity to help them, but it seems that you have presented two great optins and they have declined both and you feel it woul dbe in their best interest ( yours too) that they work with some other agent. Stop the madenss on your terms.

May 26, 2016 10:06 PM
Amy Palian

Thank you so much Clay.  I have no problem whatsoever if they work with other agents.  My issue comes in when I find out that I am being lied to and "lagged" as a result of that.  She could have been honest with me and I would totally understand and support her.  At the end of the day, if I couldn't find her a proper property, she has all the right to go with someone else, but to lie to me and lag me with excuses only to admit that she was waiting for an answer for another property is just plain harsh.  But it is okay.  When she asked me if I still want to help them, I kindly said "no". :)  This is the beauty of being your own boss. 

May 27, 2016 04:44 AM
Andrew Mooers | 207.532.6573
MOOERS REALTY - Houlton, ME
Northern Maine Real Estate-Aroostook County Broker

Move on. Be productive.

May 26, 2016 11:05 PM
Amy Palian

 and that is exactly what I have done!

May 27, 2016 04:44 AM
Richie Alan Naggar
people first...then business Ran Right Realty - Riverside, CA
agent & author

Not wise to base everything done on money alone. Every opportunity is a chance to market and advertise who you are. Remember the rule: People buy from people first & then the product.  When positive word of mouth kicks in, you struck the mother lode...Do what you love to do and the money appears

May 26, 2016 11:24 PM
Amy Palian

Yes, I agree 100%.  And this is not about the money.  This is about trust.  If I cannot trust my clients, I cannot work with them.  If she lied to me, then she lies to others as well.  Knowing this in itself prevents me from wanting to associate with such a client.  Honesty is still the best policy in my book.  If she had been honest to me, I would have supported her in all her decision makings.  Thanks for your opinion dear Richie.

May 27, 2016 05:01 AM
Richie Alan Naggar

You are a good girl Amy Palian ...

May 27, 2016 08:05 AM
Richard Bazinet /MBA, CRS, ABR
West USA Realty - Scottsdale, AZ
Phoenix Scottsdale. Sellers, Buyers & Relocations

Well Amy, I hope I'm not any different, but I would suggest you change how you approach and deal with clients.

#1, I meet with all my clients the first time at the office for a pre-meeting - this means all the parties that will potentially sign a contract. I interview and identify their needs and requirements (i make notes), plus the money part as well as their ID. If they don't show up for their appointment - then it's not a client, and I don't do one once of work.

#2, then they must sign a buyer-broker contract with me for me to start any work at all. They don't sign, then no service is provided. I call this their permission for me to start gathering information, the search and to contact other agents.

#3, in special circumstances, perhaps like this one, they must deposit a search or consulting fee, that may or may not be credited. 

I do this with every single client, no exceptions. This way I eliminate all the deadbeats, liars and cheaters, and tire kickers, so I won't waste my time and resources. 

I don't understand the agents that don't do this.

May 26, 2016 11:50 PM
Amy Palian

Thank you so much Richard for sharing your way of doing business.  Your tips are very helpful.  Next time, I am definitely going to utilize the buyer-broker agreement prior working with a client.  I have had many situations with buyers who literally "use" me to go see properties because their agent isn't around to do so and then end up putting offers with their own agents.  There is a lot of that going around.  This particular situation was way beyond what I had experienced in the field.

May 27, 2016 05:04 AM
Rob Arnold
Sand Dollar Realty Group, Inc. - Altamonte Springs, FL
Metro Orlando Full Service - Investor Friendly & F

I always try to get a buyer agency agreement signed off.  Especially if you are spending more than 1 day working with a buyer.  They need to make a commitment to work exclusively with you and make sure that you get paid for your time regardless of what they ultimately do. 

May 27, 2016 02:03 AM
Amy Palian

I agree with you Rob.  Thank you for sharing.  I am definitely going to start utilizing that form.

May 27, 2016 05:05 AM
Praful Thakkar
LAER Realty Partners - Andover, MA
Andover, MA: Andover Luxury Homes For Sale

Amy Palian - even when buyer/tenant is referred, it is in your best interest to have an agreement signed with them.

We all may have similar situation to share with others - however, it's easy to think others are responsible for this. If we protect our own interest, these things may not happen.

Good Luck.

May 27, 2016 03:38 PM
Amy Palian

Thank you for sharing your thoughts and suggestions dear Praful.

May 28, 2016 09:43 AM
Jennifer Mackay
Counts Real Estate Group, Inc. - Panama City, FL
Your Bay County Florida Realtor 850.774.6582

Not dwelling on these types of incidents will make you a much better person and a better agent for the learning experience - thanks for sharing

May 28, 2016 10:52 PM
Amy Palian

Thank you for your opinion Jennifer.  I would like to add that I didn't share my experience to be viewed as though I am dwelling in it.  The purpose of my blog post is simply to gain advice from other REALTORS on how to protect my time in the future to avoid such experiences and to avoid wasting my time in the future.  Thanks 

May 29, 2016 02:10 AM
Lyn Sims
RE/MAX Suburban - Schaumburg, IL
Schaumburg Real Estate

Amy, sorry that you wasted your time. Possibly this person needed the therapy lol! She involved many people & had a lot of time spent & to what purpose? So far I think you said she took a pass on 3 properties - that's enough to throw her to the curb in my book especially for a rental.

One other thought I had was I doubt that she could run that sort of operation without village approval. I remember something about that in our town & the neighbors were outraged.

It was voted down & out due to zoning.

May 31, 2016 09:56 AM
Amy Palian

Thank you so much Lyn for sharing your advise with me and everyone else who reads it.  You have no idea how useful your advice is.  


This particular facility was supposed to be a residential rehab.  It couldn't have been done in a commercial area hence the zoning.  The zoning had to be residential; otherwise, they wouldn't get approved.  At least this is what my client shared with me.


Interesting info on the zoning.  Now I am going to go and learn more about that.  Thanks for stimulating my mind.  :) 

May 31, 2016 02:16 PM
Jeff Dowler, CRS
eXp Realty of California, Inc. - Carlsbad, CA
The Southern California Relocation Dude

Before I read Lyn Sims comment I was thinking the sale thing about local ordinances. I know it means nothing now but that would have been a question of mine from the beginning. What a big disappointment to have spent this kind of time given how it turned out. There are some buyers/renters like this. Glad you have moved on and perhaps with some learning about how to address some issues up front going forward.

Sep 14, 2016 02:47 AM
Gary L. Waters Broker Associate, Bucci Realty
Bucci Realty, Inc. - Melbourne, FL
Fifteen Years Experience in Brevard County

Buyers are liars and sellers, too extends to those who want to lease as well!

Sep 14, 2016 03:46 AM

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