Buyer loses condo. Her fault or her buyer agent’s fault?

Even in a buyers' market not all buyers get what they want.

Even in a buyers' market not all buyers get what they want.

Here’s the true story of what happened on one of my listings recently. Two buyers competed for the downtown condo. Should the buyer who lost out blame herself or her buyer agent?

THURSDAY, APRIL 21

Buyer #1 views my listing for the first time. It’s obvious that she really likes the condo, but she wants to bring family members back in a week to get their opinion.

TUESDAY, APRIL 26

Buyer #2 views my listing for the first time. It’s obvious that she really likes the condo too. I mention that another buyer is coming back on Thursday for a second showing. A few hours later buyer #2′s agent calls requesting a second showing on Wednesday.

WEDNESDAY, APRIL 27

Buyer #2 views my listing for the second time. That evening I receive an offer from her agent.

THURSDAY, APRIL 28

Buyer #1 views my listing for the second time bringing her family members. She tells me that she is very interested in the condo. I share with her that I received an offer from another buyer the night before, but that my seller has not responded to the offer. A few hours later I receive an offer from buyer #1′s agent.

I then inform the agent for buyer #2 that I have received another offer. The agent for buyer #2 talks with his client and then calls me back telling me that the offer she has already submitted is her highest and best offer.

FRIDAY, APRIL 29

Since the offer from buyer #1 was definitely much better than the offer from buyer #2, my seller negotiated with buyer #1. We reached a verbal agreement early Friday afternoon. Buyer #1′s agent said he would send me the updated offer around 4:30 pm for my client to sign. In Illinois real estate contracts must be in writing.

Around 5 pm I received a voicemail from the agent for buyer #2 asking for an update. I called him back and left him a voicemail that my seller had reached a verbal agreement with the other buyer. I told him that I was sorry that it hadn’t worked out for him and if things didn’t work out with the other offer, he would be the first person I would call.

At about 5:30 pm I received the updated offer from the agent for buyer #1. Instead of crossing out the items that changed, writing the new values next to the crossed out values and having his client initial the changes, the agent for buyer #1 used Wite-Outâ„¢ to change the contract. Not only could you not see what the changed values had been, there was no proof that his client had agreed to the changes! I was on my way to an event, so I decided to deal with this issue first thing the next morning.

After my event ended I picked up a voice message from the agent for buyer #2 asking if his client could make another offer. As a listing agent I am required to present all offers to my seller no matter when they arrive. It was late so I sent the agent for buyer #2 an email asking what his client’s new offer was.

SATURDAY, APRIL 30

At a little after 9 am I informed the agent for buyer #1 that his client’s updated offer was missing his client’s initials by the changes. He tried to tell me that he hadn’t updated the changed pages, but that he had sent me whole new pages that didn’t require initials by the changes since there were no changes.

I compared the “new” pages to the pages from the original offer and informed the agent for buyer #1 that the initials at the bottom of the pages were exactly the same as the initials on the original offer. These weren’t new pages. The initial offer had been modified without proof that his client had agreed to the changes.

The agent for buyer #1 replied that his client had no printer or fax at her current place and he was out and about all weekend. He said that she told him to do this as this was the only way to get this done expediently.

I talked with my seller who just happens to be an attorney. She agreed with me that how the offer had been modified was unacceptable. She was, however, willing to the accept the agent’s initials on the changes for the buyer, if he also forwarded an email from his buyer authorizing him to make those changes. I presented this solution to the agent for buyer #1 at 10:30 am.

At around 11:15 am I received an email forwarded from the agent for buyer #1 giving him permission to make the changes. I replied that the email was fine, but that we still needed the updated offer.

Around 11:30 am the agent for buyer #2 got back to me with a better offer from his client, but it still wasn’t as good as the offer from buyer #1, so my seller rejected it.

Around 1 pm I received a better “highest and best” offer from the agent for buyer #2, but it still wasn’t better than buyer #1′s offer.

A little after 4:30 pm the agent for buyer #2 sent yet an even better “highest and best” offer from his client. It was a better offer than buyer #1′s offer, so my seller started negotiating the finer points of the offer.

After 10 pm I received an email from the agent for buyer #1 that he would be sending me the updated offer tomorrow because he had just gotten home from dinner.

SUNDAY, MAY 1

Around 11 am my seller and buyer #2 reached a verbal agreement. Just after that the correctly updated offer from buyer #1 finally arrived in my inbox.

Around 2:30 pm the agent for buyer #2 delivered his client’s updated offer to my office while I was out with a buyer. After finishing with the buyer I reviewed the updates and forwarded the updated offer from buyer #2 to my seller who signed the contract. Buyer #2 got the condo and my seller got 100% of her asking price.

So is it Buyer #1′s own fault that she lost the condo or is it her buyer agent’s fault? I would love to hear everyone’s thoughts on this! Please share yours below!

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ABOUT THE AUTHOR

Fran Bailey Fran Bailey is a Realtor who has been quoted in numerous Chicago and national publications. To schedule showings for any listings, get a free market analysis for your home or to contact Fran email her at fran.bailey@bairdwarner.com or call 773.793.4516. Learn More

Comments

  1. says

    First off, these are the kind of posts I look forward to! No offense but the Case-Schiller Index is Greek to me. It’s these first hand stories from the front that make me want to come back and read more. :D

    Before I give my thoughts, can you confirm that it was Buyer #2 and not Buyer #1 that used White-Out?

  2. says

    Thanks Fran. There’s a lot going on in this story and while I’m sure you’re recounting what you experienced as accurately as possible, we will probably never know what went on with the buyer and her agent.

    My first gut-reaction was Agent#1 was delaying sending an offer until tomorrow becuase he was out to dinner! I wouldn’t expect an agents life to be put on hold for me, but when we are trying to buy or sell a home and are at the offer stage, it’s crunch time. Technology should be a help, not a hinderance and I would have expected him or her to email you an offer that night.

    However, after re-reading it, I think something was going on between the Agent and his client. In this market, even the top producing agents aren’t gonna let any potential sale get away with rookie mistakes like “white-out” or not having access to a fax machine. If you are looking to buy a home, you need to make finding a Kinko’s with a fax machine a priority while you’re out and about.

    I think buyer#1 screwed up and lost out on the condo she wanted because she didn’t take this as seriously as she should have. The agent probably got frustrated with her and decided that it wasn’t worth jumping through hoops for someone who wasn’t fully focused on getting the condo she said she wanted. Disclaimer: This is of course based on what is presented here and there’s often more to the story.

  3. says

    Since many of my real estate clients aren’t able to access a fax machine (so 1990′s), I started to use digital signatures a couple of years ago to help them respond to changes quickly. It also allows buyers in two locations to sign the document independently on “the cloud” and then have it merged into one which is returned to me. It is clean, easy, fast, and legal (Digital Signature Act, 1999) so every change is clear.

    The technology is out there at an extremely low cost (I use DocuSign) and to be oblivious to it is not an excuse. Blaming the lack of a fax machine is a poor excuse… and an agent doesn’t want to recommend to a client to accept a poorly modified contract using white-out especially if you feel it would be voidable.

    Sounds like a nice condo, hey, I’ll beat that offer by $2,500 right now!

  4. Oren says

    Lots going on in this story, but as a Realtor that has practiced in Connecticut, NY an California I have been in this situation many times. Buyer’s agent #1 is at fault, as a Realor your obligation is to be diligent and use care, and in a mulitple offer situation you must be timely and concise. Being out to dinner is really not a good excuse – in addition white out etc is just sloppy. As an agent I would have made sure to get a clean concise offer ( or revision) to my client, that is if they really want the property. Countless times I have gone to the office after hours, and driven to a buyer to get signatures – and then delivering my offer to the sellers agent.
    Many buyers and for that matter agents sometimes question if there really is another offer out there – I have always gone with – yes there must be offer out there – and if you buyer really wants the property its best to go with that assumption – so as an agent you should act accordingly.

    In California counter offers were always in writing – where deadlines were specific so that all parties are put on notice. If I requested a highest and best by 5pm on Friday, responses came in before that and the seller could pick and choose from offers. Yes, it was extra paperwork, but there was always a paper trail as to what actually occured.
    — Also in regards to the comment about about DocuSign – I have used the technology in many many cases and LOVE IT – HOWEVER, many banks and the fha will not accept docusign – so contracts have to be physically signned in most cases. We used DocuSign for disclosures ( which in CA are numerous). Unless things have changed – getting the actual signatures is best, in that many times a counter offer is not just price, but can also be terms and conditions – which as a Realtor you must explain as part of your duty to your client.

  5. says

    Icarus, Doug & Oren,

    Thank you for your opinions on this! I find it interesting that of the 3 of you the 2 agents place blame on the buyer agent and the 1 non-agent places more blame on the buyer.

    Thank you also for your comments on DocuSign. I will definitely look into it further!

  6. says

    Wow, lots of things going on here. I say that both the buyer and the buyer’s agent are at fault for losing out on the condo. Buyers need to understand that if something is priced and marketed right, it will sell, and if there’s another party interested, they don’t have time to mess around. Even in this so-called “Buyer’s” market.
    Buyer #1′s agent also should have known better than to use white-out. I am a real estate attorney AND Managing Broker and no salesperson of mine would EVER be allowed to use white-out on a document. I have had instances where a simple e-mail from a client giving authorization to make changes and initial a document have been perfectly acceptable if people are on the fly.
    And I understand that everyone has a life, but people who work in our industry need to be connected at all times. I have a Blackberry AND iPad so that I can be available when a client needs me. And if I am negotiating an offer for a buyer client as an agent, I make myself available knowing that negotiation needs attention.
    Great job, Fran! You did well for your client!

  7. says

    Rachell & Brian,

    Thank you for the kind words! Part of why I shared this story is to demonstrate to buyers how their agent can make or break a deal. Even if the buyer told her agent to use Wite-Outâ„¢ he should have advised her of the risks.

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