Keep a Copy — It Will Save You Later

BROKER RISK MANAGEMENT

WEEKLY PRACTICE TIP

Keep a Copy – It Will Save You Later

Q  I am a listing agent on an upper end home listing that just expired.  When I was taking the listing, the sellers wanted a proposal on what I would do to market the listing, so I wrote a letter outlining my marketing plan and presented it to sellers.  After the listing was finalized, I prepared marketing materials, recommended a stager to make the vacant home look presentable, and heavily marketed the property.  We had one ratified buyer who cancelled and the listing expired.  Then the sellers presented me with a bill for almost $5,000 for the cost of the stager which they said I had agreed to pay.  I thought I had agreed to pay for the stager only if it closed and then from my portion of the listing agreement, but I couldn’t find a copy of the listing presentation letter – apparently I hadn’t kept a copy.  At first they couldn’t find my letter either and we had angry words, whereupon they filed a complaint in Small Claims Court.  Just before the hearing, they found the letter wherein I had indeed agreed to reimburse them for the stager from my commission upon close of an escrow.  They did the right thing and dropped the case.  But now I’ve lost a client.

A:  That is an expensive lesson indeed.

We all know that the law requires agents to give clients a copy of all documents signed by them regarding any disclosures, transactions or listings.  But, while it is not required by law, it is always a good idea to keep a copy of all communications with clients.  This is particularly important for any documents which outline important details or facts of your relationship with your client or any transaction documents or disclosures.

PRACTICE TIPS:

1.   Always give clients a copy of any contract documents or disclosures which they have signed.

2.  Always identify documents you are sending, and use a transmittal cover sheet when sending several documents.

3.  Always make a copy of all important documents that you send to your clients or the other broker and put those copies in the broker file. 

            See Weekly Practice Tip entitled “Documenting the Paper Trail”

 4.  Slow down and document what you do – it will save you later.

DO NOT FORWARD TO CLIENTS.  This Weekly Practice Tip is for the exclusive use of clients of Broker Risk Management and their agents.  It may not be reproduced or distributed without the express written consent of Broker Risk Management.  The advice and recommendations contained herein are not necessarily indicative of standards of care in the industry, but rather are intended to suggest good risk management practices.