By Liz SanFilippo
Imagine the surprise one pair of buyers faced when, during closing, they learned a pipe in the home they were about to buy had leaked, causing at least $1,000 worth of damage to their new home. Imagine their further surprise when it could have been prevented, had the listing agent not told the plumber to shut the water off.
The money and time involved in fixing this problem could easily have been lessened, says Bob Williams of John Green Realty in Oswego, if the listing agent had made the common sense decision to get the leak repaired right away.
On a Saturday, the listing agent visited the house with a plumber to de-winterize the house and turn on the water, per the appraiser’s request. At this time, the agent and plumber noticed a leak.
The agent then asked the plumber to shut the water off and not do anything; although the agent is ethically and legally obligated to disclose a leak immediately, he did not.
The leak wasn’t discovered again until the following Thursday when the buyers did a final walk-through at closing. The plumber hadn’t completely turned the water off, causing the basement’s dry wall to soften. Immediately, Williams called the listing agent right away, but he denied knowing anything about a leak.
Luckily for Williams and the buyers, the plumber documented everything the listing agent told him to do. Williams laid out the options for his buyers, but rather than delay the short sale closing, the buyers decided to continue. It helped that the seller cut a check to cover the damage.
As Williams points out, the water damage could have been much less. “His client suffered additional expense because he hadn’t disclosed the leak,” Williams said. “And a quick close turned into an eight-hour day.”
Williams’ only guess at why the agent failed to disclose the leak was that the agent wanted to leave for a vacation and didn’t want to deal with a potential delayed closing, particularly since it was a short sale. Whatever the agent’s intentions, he brought a lot more trouble on himself, which wasn’t helped by him being out of town. If damages to the home end up totalling more than $1,000, the buyers can still go after the listing agent for further compensation.
This case is all about lack of disclosure. “It’s better to be up front so all parties can come together and work out a solution,” Williams said. In the end, it will save money, if not time, too.
Getting Cut Out of the Commission
Short sales often rely on word-of-mouth agreements. This factor played a large role in turning an upside-down sale into an upside-down situation for Annabelle Lee of Prudential Rubloff.
Lee recently represented a buyer purchasing a Loop condo. The seller’s agent originally predicted a two-month sale, but instead, the process took nearly a year, causing the buyers to almost walk away.
The listing agent decided to hasten the process by bringing in a third party. This isn’t unusual with short sales, except in this situation, Lee didn’t know about the third party until three weeks before closing – the first sign something was amiss.
Yet Lee assumed the listing agent’s hire was because the agent had a lot on her plate and needed help. The listing agent mentioned nothing to Lee about the third party changing anything about their agreed-upon compensation structure, which was 5 percent of the sale as determined by the bank.
On closing day, Lee learned she wasn’t getting the 2.5 percent the listing agent promised. Rather, the agent cut Lee’s commission in half to accommodate the third party’s payment.
Lee was placed in a difficult situation: either complain about her pay cut or just let it slide. She chose a compromise between the two. She pointed out the discrepancy at the closing table, but the listing agent insisted she already told Lee of the compensation change.
Lee could have disputed until she received what was due to her, but she wanted the deal to go through. “At the closing table,” Lee said, “you’re on the airplane going forward and not turning back.”
Another factor in her decision was knowing that the short sale process would start again if she disputed. Lee didn’t want to put her buyers through that, considering her compensation didn’t directly affect them.
While Lee didn’t argue at closing, she did mention the incident to her managing brokers so they were aware. In the future, Lee intends to steer clear – if she can – of this particular listing agent. She also doesn’t intend to send her the agent referrals.
In this case, the issue was Lee’s word against the listing agent’s, meaning they could have avoided the situation had the agents put everything in writing early on.
“Make sure you know you’re on the same page,” Lee said. That includes figuring out the exact structure of all fees before closing.
Also, do due diligence, Lee recommends, because in the end, it’s your own job to make sure you’re compensated.
Dealing with a “Barely There” Agent
So many people are involved in selling and buying a home that if one person fails to communicate, the process quickly becomes difficult.
Paola Ferguson of John Green Realty in Naperville recently faced this situation. When her buyers put an offer on a house that had been on the market for nearly a year, the listing agent took three days to call back.
That was only the beginning. The listing agent provided multiple excuses for why she never responded to Ferguson’s emails or calls. “I had to follow-up constantly,” Ferguson said. “If the buyers hadn’t loved it so much, we would have walked away.”
Agents may be unresponsive for any number of reasons, but this particular listing agent wasn’t busy. Puzzled by the lack of attention, Ferguson looked up the listing agent’s transaction history, which showed she hadn’t closed a single transaction in a year.
When the listing agent did respond, she often did so through texts fraught with incorrect grammar and spelling, or scans of blurry contracts. All of this added to Ferguson’s unprofessional opinion of her.
Frustrated with the excuses and lengthy response times, Ferguson asked her managing broker for advice, who told her to be patient. If the listing agent’s unresponsiveness threatened a closing, then they’d consider going to her broker.
Initially, Ferguson didn’t blame the hold-ups on the listing agent when speaking with the buyers. Yet, the buyers started getting antsy. Ferguson then started documenting her attempts at contacting the other agent, mainly through emails, so the buyers could see what work she was doing to complete the sale.
“I’m not about to change my performance because of another agent,” Ferguson explained. She had previously worked with these buyers, and she wasn’t about to let an unprofessional agent affect future business with them.
Unresponsive agents risk more than just buyer’s interest and commission; they risk future business, too. Ferguson has dealt with realtors at the other end of the spectrum – ones that sold houses in 19 days. She’s more inclined to work with them again, rather then looking up houses this unresponsive agent represents.
Yet, sometimes working with unresponsive agents is unavoidable. For those agents, Ferguson recommends remaining patient and adapting to the other agent’s working methods. If they communicate by text, respond in kind.
With the contract signed and under attorney review, Ferguson thought she was done working with the listing agent. But, the attorneys have already asked Ferguson for help in getting a response from the listing agent, because she’s still not doing anything in a timely manner.