Tales from the Transaction - Halloween Edition
It can be a scary thing to have a client trust you with selling and/or buying their most precious (and often expensive) possession. It would be fair to say that during your typical transaction, there will be 1 or 2 mild heart attacks, meltdowns or temper tantrums. That's normal. In fact, most agents get suspicious when things are going well or running on time. They get paranoid that at any moment, disaster will strike!
"Prepare for the Worst and Hope for the Best"
The following stories are what real estate agent nightmares are made of! Tales of transactions that went horribly wrong & a few near-cancellation experiences that changed the real estate world for forever.
The Case of The Vanishing Deposit
Alan & Debbie were newly married and ready to purchase their first home. Over the past 2 years they had been saving up for their down payment. The market was right and they had found the perfect home. After a brief battle with multiple offers, Alan & Debbie had their offer accepted and were ready to open escrow.
Their agent had told them they would need to wire in their deposit to escrow and to expect an email from the specific escrow company with their exact wiring instructions.
A short time later, they received an email from escrow with wiring instructions and confirmed they would wire funds first thing in the morning. The next day, they received another email from the escrow company with "revised wiring instructions". It was not from the same person that sent them instructions previously, but Alan & Debbie knew the escrow officer had an assistant. They took the revised wiring instructions to the bank and promptly sent off their entire life savings towards the purchase of their new home.
They took the revised wiring instructions to the bank and promptly sent off their entire life savings towards the purchase of their new home.
What Alan & Debbie didn't know, was that it was not an escrow assistant that sent them a new set of wiring instructions, but a hacker that had spoofed the escrow company's email. By the time everyone figured out what had happened, the funds were withdrawn by the hacker and the account shut down.
TC Tip: Instruct your Buyers to call the escrow company direct and ask them to repeat the account number and dollar amount on the instructions sent over.
What's in a Name?
Susan was new to real estate so imagine her excitement when she received a hot lead from a man eager to sell his home! She confirmed the address, legal name and square footage then took the time to create a custom listing presentation and run the comparable sales in the area.
When she arrived at the home, she was greeted by a kind man that gave her a tour and told her of his plans to eventually move out of state. She explained her strategy for selling the home and they agreed on a competitive price, but when Susan presented the man with the contract to sign, he told her that he couldn't sign the paperwork because the name was wrong. It turns out, the man was the tenant of the property and the true Seller had no idea that his home was almost sold from under him!
The Contract that Never Was
Jason had finally secured a listing appointment with the owner of the most beautiful home in his farm. He knew the Seller was a busy executive and was also interviewing other agents.
He made his pitch and to his excitement, the Seller agreed to hire him as the Listing Agent. They had agreed on a listing price and the commission amount, but the Seller wasn't sure when the home would be ready to go on the market. As the meeting went on, the Seller told him he had a meeting to get to and to just hurry up with the paperwork. So, Jason handed over the Listing Agreement, made sure the Seller initialed on each page and they both signed on the dotted lines. He shook hands with the Seller, left him a copy of the listing agreement & hurried back to the office to start marketing his new listing.
A few days later, Jason returned to the home to put his for sale sign in the yard only to find the sign of another agent already in the front yard. Furious, he called the agent and told him he had a signed listing agreement and to get his big ugly sign out of his client's yard. That's when the new agent told him his signed listing agreement wasn't worth the paper it was written on.
That's when the new agent told him his signed listing agreement wasn't worth the paper it was written on.
In Jason's rush to get the Seller to sign the listing before changing his mind, he never completed the dates for the start and expiration of the listing and the agreement was INVALID.
The Seller had called the other agent candidates and let them know he went with another realtor. One of those agents asked to see the listing agreement and promptly pointed out Jason's mistake. He made the case that if Jason would miss a detail like that, what else could go wrong. The Seller didn't have time or patience for mistakes and since his contract with Jason was unenforceable, he signed with the new agent.
TC Tip: Prepare the listing agreement with all terms completed and bring a Modification of Terms (MOD) document to your listing appointment for any changes or adjustments.
A Little Piece of History
Donna was helping her brother & sister-in-law purchase a house in the next county over. She didn't know much about the area, but since it was family, she didn't want to refer it out to another agent.
After months of searching & a few unaccepted offers, Donna & her Buyers found their dream home and got the offer accepted. It was an older Craftsman home with a ton of character and plenty of DIY projects to make it their own.
Escrow closed and they began to get settled into their new home. About a year went by and Donna received a phone call from her brother. They had hired some professional painters and just wrapped up the $3,000 exterior painting project when they received a letter from the local historical society giving notice of their violation and fines. Their home was located in a designated historical neighborhood and subject to the rules of the historical society.
Their home was located in a designated historical neighborhood and subject to the rules of the historical society.
Also included in the letter was notice that their new $2,000 fence was also in violation and needed to be removed. A careful review of the property disclosures showed the Seller had answered "No" to the question specifically asking about any historical designation current or pending. The Seller had also answered "No" to every other question on the disclosures in a rushed attempt to complete them.
It took Donna multiple calls and emails to the listing agent (who also happened to be the Broker of the discounted commission real estate company) before she was told that they didn't have a way to contact the previous owner and they had no idea the property was in a regulated neighborhood.
The Master of None
Chris had been a real estate agent for about 4 years now. He started out taking all of the classes and getting training advice from all the top agents. Each year he was more busy than the last, but THIS was going to be his year.
Then, after a long weekend of open houses and property showings, he got the great news that his Buyer's offer was accepted, his newest listing was opening escrow and the young couple he met at his open house wanted to see some properties this week.
This was what he had trained for. Chris was prepared. He knew the steps for each transaction. He knew the documents each party would need to sign. He knew the system his office used to submit files and broker review. And he knew that he could save a few hundred bucks if he did all of it himself.
Since he wasn't expecting his listing to sell so quickly, he didn't have any property disclosures prepared and made sure to get those out for his Sellers to sign. And he knew that his Buyers needed to get their deposit into escrow, but didn't have the contact information for escrow or even a signed contract from the Listing agent. And then the calls started coming...
And then the calls started coming...
The Seller wants to sign the documents in person because they aren't great with computers. The Buyer wants to schedule an inspection for tomorrow morning. The potential Buyers have to reschedule their showing for the evening instead of the afternoon. Escrow is looking for the Buyer's deposit check. The Buyer's agent on the listing wants to know when the termite inspection is scheduled.
Before he knew it, the contingencies were due on his Buyer's purchase, but wasn't sure if the loan had been approved yet. Come to think of it, he didn't know if the Seller had finally agreed to make those repairs they asked for. And when the Buyers on his listing transaction threatened to cancel, he realized that he had never asked them for a contingency removal.
Slowly his transactions started to unravel and word began to spread that Chris was hard to get a hold of, didn't respond in a timely manner and wasn't prepared. His title rep told him that it was time to bring another person onto his team. Chris didn't have enough money to pay for an assistant and didn't have enough business to bring on another agent.
The title rep explained that he didn't need either of those. He needed a Transaction Coordinator. He knew agents that worked with TCs and told Chris how much more time he would have to focus on his clients and generate new leads if he handed off the paperwork to a professional.
TC Tip: Hire The TC Advantage to handle the details of your transaction...before it's too late!