Three brokers share tales of woe and how they corrected a situation on behalf of their clients.
distraught man on phone

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It took Tim Skoglin three years to gain confidence as a real estate agent. Now, after 25 years in the business, including 14 years as broker-owner of Skoglin Real Estate Inc. in San Diego, he understands that whether you’re new to the industry or experienced, transactions can go awry.

Skoglin, like many real estate professionals across the country, has lived through failures, goof-ups, and misunderstandings. When these things happen, the practitioner has two choices: They can either let it haunt them and negatively impact their confidence, or they can learn an important lesson and apply it to their business know-how in the future. Understanding what went wrong can help prevent future delays and problems, he says.

Learn how Skoglin handled a botched transaction in one of three real-life stories below that serve as warnings to other agents and brokers so they don’t find themselves in similar situations.

Believe Your Gut Feeling

One of Skoglin’s clients was going through a divorce, so she was eager to find a new house. “She fell in love with a home, but something seemed weird about the whole situation,” he says. Each time he called to ask questions, the seller’s agent wouldn’t get back to Skoglin until after 11 p.m. The home was priced over the neighborhood’s comparable sales, but that was the home his client wanted, so he helped her put in an offer.

The home inspector told them it had definitely been a fixer-upper. He revealed that areas of the home had repaired and repainted to cover something up. But the inspector couldn’t identify what might have gone wrong.

Skoglin knew something had happened in the house, but no one would disclose what. Yet, the owner removed all the contingencies from the offer and Skoglin’s client got the keys after closing. Shortly after, Skoglin stopped by to see how things were going at the property. While he was there, he ended up talking with a neighbor at the mailbox, who happened to be the neighborhood’s HOA president. The neighbor revealed that a man who had previously owned the house came upon hard times. The bank foreclosed on the house. The man’s sons, who were renting from their father, got very upset about the situation. They took hammers and drills to many parts of the home, cracking the sinks, breaking the brick fireplace, and destroying the kitchen range. A fix and flip company bought the damaged home from the bank.

Skoglin knew the home had previously been foreclosed from the tax records. What he didn’t know was that it had been vandalized and then repaired. The sellers, who were the fix and flip contractors, and their real estate agent, had the duty to disclose all the material facts and issues that would affect a buyer’s opinion of value or desirability, Skoglin states.
“They told us nothing. The big misnomer in our industry is that if something is fixed, you no longer need to disclose it. Even though they performed work to correct the damage, they still were responsible to disclose what they saw, fixed, upgraded, and replaced,” he says. “Disclosure problems are the biggest way agents lose their licenses. I had detected something fishy from the beginning.”

Skoglin went with his client to mediation. The judge rescinded the purchase and his client got back every penny she had spent. The incident helped Skoglin realize how important it is to trust your feelings. “If it doesn’t seem right, go with your gut,” he says.

Read Everything Thoroughly

One of Susan Duncan’s very first transactions as a listing agent resulted her paying out money.

Duncan, owner-broker of Exit Realty Vistas in Asheville and Weaverville, N.C., says the problematic transaction began when her sellers wanted to finish redoing their floors before moving and the buyers agreed. A seller “possession after closing” addendum was written up that stated her clients could stay in the home three days after closing. If they stayed longer, it would cost them $500 per day.

“I didn’t read the addendum thoroughly,” Duncan says. So, when Duncan’s clients called her saying they needed a few more days because one of them was sick. She simply called the buyer’s agent and asked if they could give the sellers three more days in the house, not realizing that her clients would be charged. Then, when the sellers moved out after those three extra days, the buyers asked for their $1,500.

Needless to say, Duncan felt sheepish that her clients didn’t know about the $500 a day. “Our clients rely on us, and we are there to protect them. So, we need to read everything,” says Duncan, who ended up writing the $1,500 check.

“It was the right thing to do. I took ownership of my mistake,” she says. “That was a hard lesson to learn, and I want others to learn from that, too.”

Go Above and Beyond

In early 2019, one thing after another went wrong for Adam Upchurch, owner of Marvel Realty Group in Wilmington, N.C. He was trying to help sell a home for a military servicemember who was living in Germany while his wife was living in Poland. “The transaction was filled with every nuance that you could pull from the playbook of ‘what is it this time?’” says Upchurch, 2019 president of the Topsail Island Association of REALTORS®.

The homeowner was stationed in Germany when he married a woman from Poland. They were renting out his house in North Carolina for a few years, which was being handled by a property management company. But as the man’s retirement from the military drew near, they made the decision to sell.

Upchurch says his client had not seen the upkeep by the tenant or management company, yet they were still hoping for a fast transaction. The home went on the market and in less than a week it was under contract. It didn’t seem like a problem at the time that the tenant would be in the home during all the showings and the inspection. However, the tenant ended up telling the other parties involved about the problems he had with the home and the property management company.

“This led to a number of questions about the property and how it had been managed by the other local firm,” Upchurch says. They ended up in a contentious debate with the property management company during negotiations. The seller was not in a position to pay for the repairs up front, which delayed the sale and prompted Upchurch and his staff to do a lot of coordination with everyone involved. Upchurch personally assisted with the repairs and pressure washing the home. “After two months of visiting the home, assisting the renter, and coordinating the documents, we got the client what he needed,” Upchurch says.

Then, closing became another ordeal since it included finding a public notary in separate countries involving embassies and military bases.

“[The transaction] demanded that I be present at all times, so nothing fell through for my clients,” Upchurch says. “To really look out for your client, sometimes you have to break down what is going on in the background to calm the situation.”

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