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 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, 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
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