Whether you like those law-drama shows or not, they are prevalent.

I was a Matlock fan back in the day.   You probably remember a scene or two where some poor soul is in a jail room with their lawyer who is pressing them: “If you’re not honest with me, I can’t protect you.”  This is the same for your real estate agent.  If I don’t know how you’ve messed up, I don’t know how to fix it!  I’ll use a couple examples from my personal experience to highlight why you want to be completely honest with your real estate agent.

A Buyer Named Ruth

A few years ago Ruth called me to purchase a house with cash her late husband had left her.  The first day we went out looking at homes I asked her a question about her husband and made her cry in my car.  My heart went out to her, especially when she told me about her health issues.  Ruth was very sensitive to air-quality; any house with moisture issues or smoke of any kind was certainly out of the question, but she also could not be exposed to the off-gassing of newer construction materials (e.g., carpets and cabinets less than 10 years old).  Our search was very limited, but I was committed.  After looking at a few properties in her specified price range, Ruth reluctantly raised her budget and then found a condo with great views.  She insisted on making a low-ball offer that – surprisingly – the sellers accepted.

Then I started to see the red flags.

Ruth was not excited about her new home.  She had the “it’s good enough” attitude, which I chalked up to a mentality of dealing with chronic health issues, but it bothered me that she still thought she was overpaying, and didn’t listen to anything I said otherwise.  I felt like she didn’t value my expertise or take heed to any advice I gave her during the transaction.  Everything I communicated to her was met with silence or a disagreeing answer.  Again, I figured this stemmed from a lifelong battle of doctors and professionals telling her something about her health that she knew was not true, and maybe she was putting me in the same group.

It got weirder.

As we sat around at the inspection, she started telling me concerning stories about other properties she had nearly bought, all which had fallen through for one odd reason or another (for example, she managed to terminate a contract because she didn’t think it was appropriate that the seller had the right to choose who would pump the septic tank).  She brought up esoteric “problems” with the home inspector, and didn’t listen to his reassuring answers, either, like how the fully-grown trees nearly a mile from the home would grow even taller and block her views.  Once we got the inspection report back, she continued to picked apart bogus aspects about the property, “issues” that weren’t even listed on the report.  Still, to my surprise, she chose to proceed with the transaction and submit an inspection response to the sellers.

Before I continue with the story, here’s how inspection negotiations work:

  1. Buyer performs inspection.  Buyer can choose to terminate the agreement for ANY reason (though it’s assumed to be inspection-related), and does not have to give a reason why.  But if Buyer does not terminate, they submit a request for repairs, credits, etc, in hopes of continuing with the agreement.
  2. Once the inspection request is received by the seller’s agent, the control is now in the hands of the Seller.  Buyer cannot terminate the agreement no matter what until the Seller has responded.
  3. Seller can choose to do all of the requests, none of the requests, pick and chose the requests, or offer something entirely different.  BUT if the Seller agrees to everything the Buyer asked, the inspection contingency is automatically met.  Game over.  Move on to the closing table.
  4. On the other hand, if Seller refuses to do any part of Buyer’s request, no matter how small, negotiations continue and the control goes back to the Buyer.  Again, at this point, Buyer can choose to terminate the agreement.

Ruth’s request for repairs was reasonable…

…but the sellers were frustrated with having to do repairs in conjunction with the low sales price.  They agreed to all repairs but a simple one: adjusting a sliding door.  This was good news for Ruth!  But when I called her, I was a bit taken aback when she said she’d think about it and talk it over with friends.  The next day I had a short and sweet email in my inbox saying she did not want the property.  When I asked why, I received a lengthy response listing every imaginable reason OTHER than the inspection findings, including the “feel” of the condo development and clauses she had found in the CCRs two weeks prior.  She obviously had a number of concerns, but because she did not share them with me, I had let her continue with the transaction, satisfy every contingency, and put her earnest money at risk.

Ruth got lucky.

Remember how the inspection contingency works; if Seller does not agree to every. single. request. Buyer has the right to terminate.  I felt angry and blindsided, but I was still Ruth’s agent and I had a duty to work in her best interest.  I had her sign the termination papers quickly before the sellers changed their mind; if they had, she would have been forced to buy the property or lose her earnest money.  In fact, once we submitted the notice of termination, the sellers had a change of heart and said they would make every repair Ruth wanted, but when I communicated this to her, the idea of buying the home repulsed her.

We weren’t a good fit.

At that time Ruth stated she wanted to continue looking for a house and was no longer open to condos.  Honestly I was surprised she wanted to continue working together because of how she constantly undermined me, but I knew it was a lost cause anyway.  There weren’t any detached homes in her price range (which she refused to revisit), and even if there were they would not have been in the condition she needed.  I had a hard time communicating to her that any detached home in her desired price would have issues that interfered with her health.  And while I thought that continuing to work with Ruth would be a waste of time, I was more concerned that she had chose to deceive me.   I have never lost a client’s earnest money, and this was a close call.  I wished her luck with a different agent.  I recently looked her up in the tax records, and she never did buy a home.

On that note…

Ruth was a rare case, and even in this situation I whole-heartedly defended my client as a fidiciary should.  That being said, I have worked with some wonderful people who simply changed their mind about purchasing a house.  This is not ideal, but because my clients were honest with me in a timely fashion, I was able to find a way “out.”  You want a real estate agent who understands what it means to be in your corner, and knows contracts well enough to get you out of one.  Your real estate agent is like your lawyer!

If you liked this personal account of a real estate transaction, click here for Part II!

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