One of our most important jobs as agents is to identify red flags to our clients, document and follow up.
An attorney who taught a class I attended a couple of years ago said you can never completely avoid law suits, but you can minimize potential exposure.
When you spot a potential problem with a transaction, whether it is with the documents, the property itself, or anything else that may affect your client, you have a responsibility to notify your client and give a recommended course of action. In most cases the recommended course of action will be to seek professional help. Then always follow up later.
Never forget the three D's, document, document, and document. Your transaction file should have the original notification letter or entry in your phone or e-mail log and any supporting documents. There should also be a follow up letter reminding your client to seek the needed assistance for the remedy. Is your client required to follow up? Absolutely not!
What if your client doesn't follow up and something bad happens later? I know this may surprise you, but sometimes when things go bad clients and other agents may lie.
Possible Scenario #1
- Your attorney: Mr. Client did Agent-A inform you that there was a possible settling issue with the home?
- Client: No he never said a word.
- Your attorney: Mr. Client did you not receive this memo from Agent-A dated 1/10/05 telling you that the problem with the windows and doors not closing properly may be a possible indication of settling and he recommended you bring in a professional to have it checked out?
- Client: Um, well, I don't recall seeing that.
- Your attorney: Mr. Client do you remember this follow-up memo reminding you to seek a professional to inspect for possible settling? How about the phone call at 5:15pm on 1/13/06?
- Client: (tugging on his collar) well maybe.
- Your attorney: Then Mr. Client would you agree that Agent-A was consistently looking out for your interest in this matter and at all times conducted himself as a professional.
- Client: Well I guess
Case Dismissed
or
Possible Scenario #2
Client's attorney: Agent-A do you have any proof you ever informed Mr. Client of the need or his right to have the possible settling problem checked out by a professional?
- Agent A: I told him several times
- Client's attorney: I will ask again, do you have any proof?
- Agent A: Well not exactly
Guilty
Imagine the attorney who looks at your records and sees the memo to the client identifying a possible red flag, your recommendation to you seek professional assistance, your phone logs, the e-mail messages, the follow up letters. That attorney will take one look at your file and in most cases recommend they leave you alone. You are obviously a professional.
--------------------------------------------------------------------------------------------------------
Randy L. Prothero, REALTOR®, ABR, AHWD, CRS, e-PRO, GRI, SFR
Century 21 Liberty Homes
Randy Prothero is well established as an expert in working with military / VA clients and first time home buyers. His home seller's (listing) campaign is one of the most aggressive marketing programs in the area.
Based out of Mililani, Hawaii. Randy services the island of Oahu (Honolulu County) and the Leeward Regional Chairman of the Honolulu Board of Realtors. To improve overall professionalism in his area Randy also offers classes for real estate agents.
www.HawaiiRandy.com * Oahu (Honolulu County) Property Search * Hawaii Military Relocations
Brian - I have traditionally kept the most complete files in my office.
After taking CRS and GRI classes I realized I still needed to improve dramatically.
Randy,
Good advice, as usual.
Lucky
Communication logs are so important to protect yourself with your client & with others involved in the transaction.
To make a long story short, I had an buyer's agent who couldn't follow instructions on a probate listing and fought me every step of the way he accused me of this and that and the other and he said his client was going to file complaints with the board and the division against me.
When I got called into my broker and sales managers office I plopped down my 56 page communication log and told them I felt confident that I could win anything he/they brought against me.
I think part of the game in real estate (along with this blog) is to blame blame blame instead of stay on top of things and explain.
I was lucky to work my first couple of deals with our associate broker and learned about the "communication log" early on!
Good reminders for all of us. Oftentimes, we are indeed our customers eyes and ears. We are the ones that they are depending upon to go to battle for them. We need to keep good notes. I like having things in writing and not having to deal with 'he said - she said' drama. Many times when I send back a copy of an e-mail, it usually settles things.
Lucky - Thx for the kind words.
Renee - Great example, I am sure you were relieved to be trained by pros.
Suzanne - A result that only comes to a professional
Netta - I scan every document. It is also fun to send the signed document as a reminder to the other agent, who disputes what they agreed to.
Michael - I know you keep good logs, we sat in many of the same training classes.
Bryant - I am new to this, but am hooked on AR.
"Randy"
Man you're keeping me busy today. I'm not complaining. I like your posts...:0)
Okay then. This is a great post. If it's not in writing you're screwed. That pretty much sums it up for me. :))
<you can never completely avoid lawsuits>. Well or is that but. It's the but Randy. It's not my fault man...
Anyway, back to the but. I do believe it is possible to avoid lawsuits. We have for many many years. Everything is in writing. We are honest people. If someone were to file a suit against us they would be screwed. The "well not exactly" would never come out of our mouth. We would never, as in ever, say that. If you abide by the law and cover that "but" this is something you simply do not have to concern yourself with.
When I first started in this business I constantly worried about being sued. People are "sue" crazy and I worried about it all the time. I used to take notations on every thing. My files contained way more than what is required by law. I mean I had everything documented, right down to phone calls with times and dates...I had it bad. With time I learned that as long as we kept proper files, stayed within the law and covered our "but" I was cool...
I could go on with this, but, I should stop and save a comment for someone else. That whole co-broking thing ya' know.
Randy why do I keep Blogging on your posts?
TLW "The Lovely Wife"...Blogging On Another Post...ROAR!
You can never be too prepared or, in blunter terms, CYA!
Tricia's 'email summary after the phone call' is a very good idea.
Tricia - Good background to have at times in our business
TLW - I have never seen the inside of a courtroom either, but have heard horror stories about other agents. I agree that you can definitely avoid most potential law suits but doing exactly what you describe. I have found the best way to avoid problems is to have a good working relationship with everyone involved. A client who sees you doing everything possible on their behalf would not be as inclined to come after you. They would also be much more forgiving if you were to make a mistake.
I may be new to blogging, but I know I must be doing something right. I am attracting top notch professionals into our conversations. Thank you for your input!
Marc - I like e-mail because it time stamps everything automatically. I can always log them in later. Phone logs require being more diligent.
TLW - You and Bryant are teaching us a lot with your informative posts and replies.
I feel I am a pretty good agent. What makes me a good agent is I know what I still need to learn and improve. AR seems to be a great place to bounch ideas off other agents from other parts of the country and get tips on improving your business practices.
Mahalo (Thank you) for your great responses.
"Randy"...Hey, it's working I got an email! Good. We thank you for that compliment. :)) I want to throw one back. It's people like you that have kept us on AR. Your willingness to post these topics and have "tame" debates on them is impressive. It really is. You have a neat little way of getting me to Blog on your posts. That's impressive too. I don't do that with very many people. I guess I'm comfy in Hawaii! It is pretty obvious that you are excellent at what you do. BTW, have I mentioned that you have an open mind?...Aloha...TLW...ROAR!
P. S. Cool...I am going to learn a little Hawaiian...Maholo. :))
TLW - I am always open minded at least according to my children.
Here is a little Hawaiian for the season:
Aloha
Hey. Cool. I have an open mind teaching me a new language...Can't beat that. :))...
Now you have me bookmarking this post. See...You've done it again!!!!!! TLW...ROAR!
Ok in Hawaii we do not use north, south, east or west for directions. We use towrds the mountains towards the ocean.
Mauka (mountain), Makai (Ocean)
We also use landmarks like Diamond Head or Ewa. In a pinch they may say they are going town (Honolulu) or country (everywhere else that is not in heavily populated)
Aloha
Aloha...
Mahalo...
TLW "The Lovely Wife"...I Love This. Now I Have To Take A Vacation...ROAR!
That is easy just go away from the mountains. We are on an island, you can't get lost.
Definitely let me know if you and Bryant make the trip. Time it with a CRS class and write off the trip.