originally posted on Friday, January 13, 2012
The $100,000 Deposit
A top producing agent I worked with used to parrot this saying, “you learn something new in every transaction and never use it again”.
She retired in her early 80’s after a successful career in real estate and she loved to intimidate other agents!
I’ll never forget this failed transaction that occurred several years ago. A call comes in to the desk agent with an inquiry on one of our company’s listings. The listing was in one of our nearby offices and was priced at slightly over a million.
Appointment made. House shown. Agent writes offer with a $100,000 deposit check from buyer!
Listing agent, sellers, and agent in my office are ecstatic. The offer deposit was 100 times what was standard at that time in that state.
Sound too good to be true?
Buyers state they will be cash buyers. Price is negotiated and sellers sign offer. Home inspection is scheduled.
Deposit check clears. Agents request proof of funds for closing and buyer freaks. He becomes belligerent and verbally abusive. No proof of funds received.
Agent comes to me, as her manager, and I get involved.
It’s too late.
Deal falls apart after wonderful home inspection that buyer nitpicked to death.
Buyer disappears after getting his $$ back. I do my best at damage control with sellers. Company loses listing, anyway.
2 things come to mind:
1. When it seems too good to be true, it often is!
2.Follow the process.
This individual had no intention of buying a home. He threw both agents and seller off track with his enormous deposit.
If the agents had requested proof of funds prior to offer being signed, think of the grief and time savings for everyone.
At that time, the market was hot. Regardless of the type of market we are experiencing, follow the process.
When we get a bad feeling about a buyer, seller, transaction, follow the process.
When we are so excited about a potential commission, follow the process.
This business is highly emotional. Sometimes, even the most experienced agents get caught up in the swirling energy.
A new mantra for when that happens?
Follow the process!