Courtside

The Situation: My client listed her house through me and we received an offer from the client of another agent. With the offer was a pre-approval letter from a mortgage company - a MUST in this business. Everyone was thrilled.

The Initial Problem: When it came time for the commitment, the mortgage company said she was not eligible, not for any changes, just that they were not approving her.

The Initial Solution: As the listing agent, I was furious with the company. This had happened only once before in my career, and then I knew (afterwards) that the client had lied (not a good thing) on the application. I called the manager of another branch of the company to complain and he took on the problem, personally paying for a new appraisal because his company had promised that she could get a mortgage. The mortgage agent took another position in a local bank.

The Wait: All this took time, but we all stayed with the buyer, and she spoke with tenants and told them how great it would be when she was the landlord.

The Closing: Sort of. Two days before closing the insurance company she had chosen declined to insure the property, saying that it did not meet their standards. She refused to close, and asked for her $1,000 deposit to be returned.

The Solution: Small claims court. A year later, after the claim was brought by the buyer, her case was heard. The house had sold for less than her offer, the seller had to pay taxes and insurance for another three months, and the contract specifically stated that if the buyer did not follow through then the deposit would revert to the seller. The judge felt that splitting the deposit, as the seller had offered initially, was the best solution.

The Lessons: 1 - A contract to purchase a property is just that - a contract.
2 - Nothing is sold until the deed is recorded.
3 - Small claims court does settle disputes, and provides a sense of "being heard."