Tuesday, May 15, 2007

Stupid seller makes $6,000 mistake

True story that happened a few days ago. Some past clients and good friends of mine called me because they wanted to purchase an investment property in their neighborhood that had just been listed with this discount brokerage. They asked if I would simply draw up the paperwork for them to make sure the contract was written correctly but not to ask for a commission so that the offer will look more attractive to the seller (they would virtually save 3%). Being good friends and past clients I had no problem doing this so I typed up the contract for them and they submitted the offer. My client’s informed me a day or so later the sellers accepted an offer from a builder who was requesting a commission at the same exact price my clients had offered! Then I received this email correspondence in which my clients are explaining to the seller they really just accepted a lower offer. Painful.

Buyer/my clients: “Well congrats on selling your home so quickly. I did want to mention that even though I had a broker draw up the offer contract, if you take a look at the broker section of the contract, our broker was not seeking commission from the $217K offer.”

Seller: “ouch! double ouch! i did look through the contract but didn't notice that part of it -- i guess i just cued on what you and i had discussed and assumed he would want the commission. i thought i was making the best business decision... but perhaps it was not.”

Yeah. A $6,000 bad decision. The seller’s REALTOR® probably never even saw the contract although I can’t blame the REALTOR® completely. This seller wanted to save some money on their commission so they exercised their right to hire a REALTOR® of their choosing whose website states, “We have saved our "smartsellers" over SEVEN MILLION DOLLARS in needless real estate fees.” I’d be more interested in how much money they have LOST for their “smartsellers”.

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