BiggerPockets

The ABOR Balance Of Power Shift

Monday, December 19

One of the things I used to preach consistently to my old coaching students was that contracts have very little meaning if they are below a certain dollar amount. This proved to be the case this week when I had a lot transaction where my funds were stuck in escrow because of a screw-up by the seller's Realtor and broker. The long and short is that the Realtor failed to have the seller fill out the net sheet correctly, which caused him to flip out just before closing when the HUD-1 came out. I originally thought that I would be screwed by the situation because my funds were sitting in escrow and were held hostage due to the stalemate between the seller's broker and the seller. Fortunately our broker was able to figure out a way to get the thing closed limiting the amount of commission he had to forfeit. I immediately placed a complaint with ABOR, our local board of Realtors and was surprised at how the situation was handled. I was expecting very little, but the complaint was taken extremely seriously. The enforcement person passed things on to the Ombudsman who called me the next day. The Ombudsman is mediating the claim with the seller's Realtor and broker and we expect to get made whole in the transaction. The most surprising thing is that I learned that the seller's broker had the following things hanging over her head: 1. The effort in fighting the claim 2. Possible additional education hours 3. A valid claim on her record that could increase E&O insurance 4. Possible fines So what was a situation where our funds would have been stuck in escrow and we would have had to sue for specific performance turned into a situation where we had the balance of power. Instead of worrying about a negative NPV situation of suing a seller with our money held hostage we closed and now will likely receive our full commission on the deal! In summary I am quite impressed with ABOR and how the transaction is turning out. It is nice to have a solution for the small contracts problem!

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