The One That Got Away- The Train Wreck I Never Should Have Allowed

J Philip Faranda December 16, 2011

See saw of real estateSometimes I regret asking a question because I hate the answer. 

Just this morning, I saw that it was the last day to submit an entry into The One That Got Away blogging contest, and I asked myself if I could recall a good story on the theme. Unfortunately, my answer came in an email tonight. 

Background: 13 months ago, I listed a true fixer upper for a very nice seller client. It was a gut job that needed everything- heat, electrical, windows, floors, baths, kitchen, you name it. It would need either an all cash buyer or a rehabilitation mortgage. It didn’t sell  in the first listing contract, but I earned an extension from the seller. We got our buyer this past June. 

The buyer’s agent was, from the sound of things, inexperienced. The buyer’s attorney…well, she was REALLY out there. She not only went on the home inspection (never heard of that one), she attempted to renegoiate the terms of our deal after contracts were sent out. Can you say “bad faith?” The icing on the cake was that the mortgage loan officer was really unresponsive. For months we asked for updates and got nothing from the lender, all while the attorney assured us that their mortgage application was proceeding. 

We were informed that a commitment was issued in August, but it was subject to an appraisal. How could they issue a mortgage with no appraisal? Again, no answers from their loan officer. After the appraisal, we were assured that the “clear to close” was imminent. 

Then, the hammer came down. The bank revoked the commitment. The appraisal cited water seepage in the basement and disqualified the collateral. How can you disqualify the house in a rehab loan? When you apply for the wrong loan. The loan officer, who was now not only MIA but being covered for by other colleagues, put the applicant into a steamline loan and not a full bown renovation loan. They applied for the wrong mortgage. The lawyer and agent didn’t catch it, and their loan officer was out to lunch.  

Since  commitment was issued, our position was that the buyer either needed to re- apply for the correct mortgage or forfeit the deposit. They were unresponsive for weeks. 

Keys to the KingdomOutcome: Tonight, my seller emailed me and asked to be released. Shooting the messenger? Absolutely. Just yesterday I was on the phone with the owner of the other brokerage discussing how to get his buyer to stop stalling and proceed. I made it clear that the deposit was in jeopardy, especially in light of the attorney’s reassurances that the mortgage process was proceeding well (pretty crazy when she didn’t know her buyer applied for the wrong loan). But my seller had enough. She wants to start anew with another broker. 

The Lesson: Deals are either green and growing or ripe and rotten. Leaving the success of the loan in the hands of a rookie agent, a moonbat lawyer and an inept loan officer was the formula for losing the deal and as it turns out, the listing. Even though this was not my buyer and not my client, I should have asserted myself and either caught the mistake or flushed out the deal earlier. Even if that resulted in the loss of the deal it would have saved time, money, and certainly my standing with my client. 

Never again will I tolerate unprofessional behavior without a fight. Never again will I let a rookie learn the ropes on the back of my client. I won’t care about feelings, diplomacy or complaints. If advocacy means making waves, surfs up. 

 

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