Every real estate agent loves a good business opportunity. It’s even better when it seems like a great deal falls from the sky without warning. Wow, it’s gonna be a great day!
Think about getting a really good listing. You get a message from a potential client, who heard about you from one of their friends you’ve worked with in the past. They’re planning on moving out of state and would like you to list their home for them. You contact your previous client to thank them for the referral, and to do some recognizance work on your (potential) new clients. Everything checks out OK, and you set up a meeting with your new clients.
They turn out to be very nice people, you hit it off, and soon you’re officially their real estate agent. You stop by to look at their house and are pleasantly surprised at the opportunity that’s fallen into your lap. It’s a beautiful house in a great neighborhood, and looks like it’ll be on the higher end of all the houses you’ve ever listed. You get some preliminary info from them, snap a few pictures, and head off to start doing what you do.
You spend some time on the computer doing research, working on comps for your new listing. Everything is going fine until you come across an unusual comp on the same street. You have to spend a bit more time figuring out what’s different about the listing, and reach out to the other agent and the appraiser, but before too long the issue is cleared up and you’re moving forward.
You put together a battle plan for the listing and meet up with your new clients to discuss strategy. You’ve got some good ideas, and they all go over well with the sellers. At this price, you know that you’re going to have to put in a bit more work than your usual listing, but you know that once it closes, all the extra time and money spent will be well worth it.
The plan you’ve come up with is multi-faceted, and you’re eager to get the listing up for everyone to see. You’re going to spend a bit more than normal for the photos, and plan on getting a top-end company to photograph the house and create a 3D virtual home tour. Obviously, you’re going to post the listing in all the usual spots, but you realize that this home calls for a bit more than that. You decide to spring for a web-developer, and the house now has its own website to market it to the masses.
Things really start popping as soon as the listing goes up, and quite a few potential buyers come through the house in the first week of showing. While you’re happy with the action that you’re getting, surprisingly no offers come in. You quickly jump into action, soliciting the showings for feedback. Maybe there’s something that you missed, so you try to figure out what’s holding back the massive waves of offers.
While you do get a lot of positive feedback, there are a few things that stick out to you. As the previous owners have already moved out, the simple fact that the house is empty makes a house of this size feel cold and uninviting. And then there were a few potential buyers that questioned the accuracy of the reported square footage. At first you felt pretty sure that the previous appraisal report was correct on its square footage numbers, but now you’re not so sure.
You think about your options and call your sellers to discuss. While they’re open to your new ideas, obviously they’re not interested in footing the bill for your marketing efforts. Again, eyeing that eventual payday at the closing table, you pull up your real estate agent pants and get to work.
The square footage thing isn’t too difficult to get around, but it does involve spending your valuable time back at the house, pulling measurements, making sketches and crunching numbers. Once you’ve got that solved, it’s back to work, getting the house staged for the next wave of showings. Staging’s not cheap, but you know that at this price point, it’s almost a necessity.
You quickly clear all those hurdles and get to work on the upcoming open house. You really hate doing these things but can’t deny that they sometimes produce a quick sale. A few strategically placed signs, sandwiches, desserts and door prizes later, and you’ve got more valuable feedback. Everyone loves the house. And now that it’s staged, it really looks much better than the pictures posted in your original listing. Well, you know what that means: more money for more pics. A few bucks later and the listing, video and website all look as nice as the newly staged house.
This one is quickly turning into a full-time job.
Then it happens. It all went by so fast, you hardly even noticed it. A few showings; another open house or two; a couple of low-ball offers, and suddenly your listing agreement is about to expire. How could six months have gone by so fast? It seems like only yesterday you were writing checks for pictures (the first time), and now you’re hoping to get your sellers to sign up for another six months. Man, time goes by so fast.
But the conversation takes an unexpected turn for the worst. They really appreciate the work you’ve done, but this other agent says she can get it sold much faster than you. She told them that you’re just too old, and really didn’t know how this new, younger real estate market works. She assured them it would be sold within the month. And she’s willing to accept a lower split than you.
Blindsided. Ouch. Sometimes you really hate this industry.
Then you get the call. You wonder, how can someone have the gall to ask that. The nerve of some people.
It’s your client’s new agent. She says that it looks like you’ve done a really good job on this listing, and she’s sorry that things didn’t work out, but now she’s on the case. So, don’t worry, she’s going to take really good care of your previous clients.
But, the real reason for the call is that she would like to get a few things from you. She likes your pictures, video and website, and was wondering if she could have them, since you’re not using them anymore. The sellers told her about the market analysis and sketches you did on the house and getting those items from you would really help her out too. And let her know who’s handling your staging, because she can probably save some money if she just keeps the same set up that you’ve already got going. And the while you’re at it, could you send her the copy you wrote about the property for the ads you put in the real estate magazine and website. Oh, and if you could send her any info you have about previous offers and potential buyers, that would really make her job easier too.
To top it all off, she ends up selling the house (in less than a month) to the brother-in-law of one of the potential buyers you were working with when you had the listing.
Time passes; your anger begins to subside, and you’ve (almost) forgotten about the bath you took on that listing. Until, one day a certified letter arrives at your door. It’s from the new buyers’ attorney. Apparently the new buyers had a professional measure their new house, and his numbers don’t line up with the ones that you got when you measured it during your listing period, and they want some money from you to make up for your apparent error.
Wow. That’s certainly a nightmare scenario, and I would never wish that on any one of my agents.
But, if you think about it, that’s exactly what can happen when an agent “shares” a previous client’s home inspection report with a new buyer.
All the hard work, time, money and (mental and physical) energy that you put into listing that house was a loss. You made all of the investments and someone else reaped the benefits. And then you were blindsided by a lawsuit from someone you’ve never even met; someone you’ve never even worked for.
That’s the same exact scenario faced by a home inspector when an agent gives away (or sells) their home inspection report to someone it was not created for. An inspection report is intended for one person only: the person with whom the home inspector has a contract. When the initial purchase agreement falls apart, and the report is given to a new buyer, not only is it against the law, basically it’s stealing from that home inspector. The same as another agent taking everything you’ve done on a listing and getting all the benefits of your work without compensating you for what you’ve done.
Worst of all, the new client, who doesn’t know the original inspector, is now relying on the information that inspector produced to make a decision about a home purchase. And because the inspector doesn’t have a contract with that new buyer, the inspector has no legal protection if the new buyer decides to sue for any perceived problems they have with the inspector’s work.
And since our home inspection contracts are written to help protect the real estate agents that refer us to the initial home buying client, the agent that provides the report to a new buyer is also without adequate legal protection when there is a lawsuit related to that inspection report.
All the work, all the effort, all the outlay, all the liability, without any of the benefits.
Doesn’t sound like a good deal, does it?
So, next time a new buyer (or their agent) asks for a copy of someone else’s home inspection report, please think twice about giving (or selling) it to them. Contact the home inspector and ask them how they would like to handle the situation. Many inspectors will offer a consultation to the new buyers at a discounted rate from the original inspection (with a new contract, obviously.)
You wouldn’t want someone else profiting off your hard work, so please don’t do it to someone else.
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Thanks, Joe
