Hawaii Randy's Real Estate Opinions: Identifying Red Flags For Your Clients

Identifying Red Flags For Your Clients

One of our most important jobs as agents is to identify red flags to our clients, document and follow up.Red Flag

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.

 

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Randy L. Prothero, REALTOR®

Broker-in-Charge, ABR, AHWD, CRB, CRS, e-PRO, GRI, MRP, SFR

eXp Realty

Team Leader - "The Prothero Group"

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.  His luxury home listings sell faster and for more money.

Based out of Mililani, Hawaii. Randy services the island of Oahu (Honolulu County) Performs mediations and ombudsman services for the Board of Realtors.  To improve overall professionalism in his area Randy also offers classes for real estate agents. 

www.HawaiiRandy.comOahu (Honolulu County) Property Search  Hawaii Military Relocations

Comment balloon 33 commentsRandy Prothero • November 27 2006 12:38AM

Comments

As usual, excellent advice dispensed by a pro.  We use a conversation log in our loan origination software.  I was fortunate to have mandatory utilization of that "con log" early in my career.
Posted by Brian Brady, 858-777-9751 (San Diego VA Home Loans/858-777-9751) about 12 years ago

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.

Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) about 12 years ago

Randy,

Good advice, as usual.

Lucky

Posted by Lucky Lang, SRES, Davenport, Iowa Real Estate (Mel Foster Co.) about 12 years ago

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!

Posted by Renée Donohue~Home Photography, Western Michigan Real Estate Photographer (Savvy Home Pix) about 12 years ago
Another excellent use of email and electronic filing.  Mr. Client - in view of the mountain of evidence proving you were so advised, I not only dismiss your action, but award damages in the amount of $500 per hour to the defendant!
Posted by Suzanne Marriott, Associate Broker, CLHMS, e-PRO (Keller Williams Arizona Realty) about 12 years ago

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.

Posted by Netta Blackwood, REO/BPO Expert (La Rosa Realty) about 12 years ago

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.

Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) about 12 years ago
Randy, thanks for the reminder about keeping those logs. I just remembered the one about Murphy's Law. As soon as you think you won't need those files anymore and have them shredded, guess what.
Posted by Michael Mackey about 12 years ago
Randy, great examples. I keep everything in writing and in my files. If it's not in writing it does not exist. Great advice Randy. BTW you are really good at this blogging stuff. Great to have you on AR.
Posted by Bryant Tutas, Selling Florida one home at a time (Tutas Towne Realty, Inc and Garden Views Realty, LLC) about 12 years ago

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.

Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) about 12 years ago
Thanks for the suggestions on how to keep out of a law suit.  Great blog!  I will make a better effort on this noticing how important it is for everything!
Posted by Cynthia Sloop (Community Association Manager) about 12 years ago
Cynthia - The one you least expect could be the one that bites you.
Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) about 12 years ago
I not only keep a call log, but also send an email after every phone call confirming what was just discussed (a hangover from my legal assistant days).  It not only serves the purpose if things get sticky, but in many cases KEEPS them from getting sticky by giving another agent or client who might be the kind to lie notice that there will be evidence, thus giving them second thoughts about pulling anything.
Posted by Tricia Jumonville, Texas REALTOR , Agent With Horse Sense (Bradfield Properties) about 12 years ago

"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!

Posted by "The Lovely Wife" (Broker Bryantnulls Wife) The One And Only TLW. (President-Tutas Towne Realty, Inc.) about 12 years ago

You can never be too prepared or, in blunter terms, CYA!

Tricia's 'email summary after the phone call' is a very good idea. 

Posted by Marc Blasi about 12 years ago

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.

Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) about 12 years ago
Randy, whether your a Realtor or Loan Officer, you need to keep a paper trail, if someone is to lazy to do that, then they only have themselves to blame when things start to come down around them.
Posted by George Souto, Your Connecticut Mortgage Expert (George Souto NMLS #65149 FHA, CHFA, VA Mortgages) about 12 years ago
George - Correct, a paper trail is what all professionals do.
Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) about 12 years ago
When you go to court the one thing the opposing attorney doesn't want to see is a nice thick file in front of you.  Not too long ago I had to be deposed and the attorney was furious everytime I pulled out documentation.  He got really nasty when his whole argument went up in smoke as I pulled out the signed disclosure where I had written that the unit could only be used as a single family home and not an income property.   His whole argument on the client walking from the transaction was that she didn't know the lower level couldn't be rented. GOTCHA.. I loved it.
Posted by Kaye Thomas, e-PRO, Manhattan Beach CA (Real Estate West) about 12 years ago
Kaye - Great example of how keeping good records was a life saver.  It also proves the point the sometimes clients can either have selective memory or just lie.
Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) about 12 years ago
Randy. I am not sure why but I am not getting updates on this post. My box is checked? Hmmm. Oh, well. I can check in manually. You are doing something right. And, that something is writing excellent Blogs. Excellent Blogs like this attract the good guys! :)) A courtroom is no place for a RE Professional to be hangin'. Pun intended. I will continue my input. Sorry, I when I didn't get any responses on this post I just thought you must be really busy. I will keep following you around. You're pretty good company ya' know! :)) TLW...ROAR!
Posted by "The Lovely Wife" (Broker Bryantnulls Wife) The One And Only TLW. (President-Tutas Towne Realty, Inc.) about 12 years ago

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.

Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) about 12 years ago

"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. :))

Posted by "The Lovely Wife" (Broker Bryantnulls Wife) The One And Only TLW. (President-Tutas Towne Realty, Inc.) about 12 years ago

TLW - I am always open minded at least according to my children.

Here is a little Hawaiian for the season:

  • Mele Kalikimaka - Merry Christmas
  • Hauoli Makahiki Hou - Happy New Year

Aloha

Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) about 12 years ago

Hey. Cool. I have an open mind teaching me a new language...Can't beat that. :))...

  • Mele Kilikimaka=Same to you and yours. 
  • Hauoli Makahiki Hou=Same to you and yours.

Now you have me bookmarking this post. See...You've done it again!!!!!! TLW...ROAR!

Posted by "The Lovely Wife" (Broker Bryantnulls Wife) The One And Only TLW. (President-Tutas Towne Realty, Inc.) about 12 years ago
TLW - My Hawaiian is limited.  I will run out of them soon.
Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) about 12 years ago
I'll take whatever you have. Sorry I haven't been around on your new posts. I will catch up. The Groups are keeping me busy. Things should slow down over the next few days. :)) TLW...ROAR!
Posted by "The Lovely Wife" (Broker Bryantnulls Wife) The One And Only TLW. (President-Tutas Towne Realty, Inc.) about 12 years ago

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

Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) about 12 years ago

Aloha...

  • Mauka...Mountain
  • Makai...Ocean

Mahalo...

TLW "The Lovely Wife"...I Love This. Now I Have To Take A Vacation...ROAR!

Posted by "The Lovely Wife" (Broker Bryantnulls Wife) The One And Only TLW. (President-Tutas Towne Realty, Inc.) about 12 years ago
This a great time of year to be here.  We have been having great weather.
Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) about 12 years ago
If we ever do make it there, we want to meet you. Promise not to turn you into a "tour guide". Just show me where to find the Makai. :)...TLW...ROAR!
Posted by "The Lovely Wife" (Broker Bryantnulls Wife) The One And Only TLW. (President-Tutas Towne Realty, Inc.) about 12 years ago

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.

Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) about 12 years ago
That was a big Duh for me. Yah. An ocean. Pretty hard to get lost on an island. There's that Duh. :) We will give you the heads up. TLW...ROAR!
Posted by "The Lovely Wife" (Broker Bryantnulls Wife) The One And Only TLW. (President-Tutas Towne Realty, Inc.) about 12 years ago

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