how to deal with a broker who messed up a deal

I am still fuming. I was working with a broker to purchase my first investment property. It was not lendable, and I told him that, but he still went ahead to arrange an appraiser. Then the broker dissappears. Two weeks later he tells me that the property cannot be qualified for conventonal loan, so we have to start all over again with hard money loan. I sent applications, paid fee, then he dissappears again. Despite the fact that I started the process 6 weeks before the closing, he tells me that he cannot close on the date, and he needs another 3 weeks. After some nagging and talking to his boss' boss, this went down to 2 weeks. I am bound to pay $100 late fee per day, and they are saying nothing can be done. Seller is now quite nervous and contemplating not to accept the postponement of the closing and walk away with my ernest money. So my dilemma: I want them to make pay at least a part of the penalty that I have to pay. if not, I want to walk away and work with a new lender, but since I only have two weeks, it may be too tight for a turnaround. I cannot supress the urge to somehow get back to this idiot, but don't know what to do. Is there a place I can file a complain officially? :pissed:

Edited: 06/26/2010 at 04:18AM

Jared Christiansen

Real Estate Investor · Fort Wayne, IN

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Dec 18 '07, 04:29 AM

Not exactly sure how you can get back at this guy besides walking away and chalking it up to a learning experience. What ended up happening?

Edited: 06/26/2010 at 04:23AM

Calixto Urdiales

Residential Real Estate Agent · Los Angeles, California

1,466 posts
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Dec 18 '07, 06:46 AM

This happens from time to time but I would say your best bet is to move on a write it off as a loss at the end of the year. The thing is you can talk to your Lawyer and take them to court for negligence and seek reimbursement & pain and surffering. This however may be a long and gureling process and will probably be more of a headache than to just find a new properties.

Sorry about what happened and i hope it all works out.

Edited: 06/26/2010 at 04:23AM

John Pestorich

Commercial Real Estate Agent · Fresno, California

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Dec 20 '07, 09:33 PM

Why did you let him disapear? In my experience, the squeaky wheel gets the oil when it comes to lenders.

Edited: 06/26/2010 at 04:24AM

Ken Mitchell

Real Estate Broker · charlotte, NC

99 posts
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Jan 04 '08, 04:48 AM

In NC, the seller can't walk with your earnest because you went beyond the closing date unless someone specifically wrote into the contract that " time is of the essence" , which basically means that either party can hold the other to the closing date specified in the original contract.

not much you can do with the broker except throw him under the bus every chance you get....

Edited: 06/26/2010 at 04:27AM

Michael Shores

Commercial Real Estate Broker · Marianna, FL

7 posts
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Feb 14 '08, 08:12 AM

forgive me for offering advice so long in waiting, but i feel that you may benefit by it in your next deal.

in florida, the seller cannot walk away with your earnest money as long as you showed good faith attempts(being at least 3 lenders) in obtaining financing and your contract was contingent upon applying for and receiving financing during your closing period. (you may want to ask an attorney if this applies in maryland via a universal contract that is used by realtors in MD) if you did not order the appraisal via a verbal or written agreement with the appraiser or agent to allow the agent to hire them, then the agent might have been stuck with paying the appraisal fees.

it does sound like you have little recourse against the agent, unless you wish to carry it a step further and involve an attorney. however, i think you would be spending more money to get back at the agent than it is worth. however, the best approach to dealing with an agent's severe mistakes is to attack their reputation in the business and tell everyone you know how crappy of an agent they are. after all, harmful word-of-mouth advertising is more difficult to overcome than official complaints.

obviously, in your next deal, work with another agent. i strongly suggest that you add plenty of contingencies to your offer. make it contingent upon the appraisal price, financing, home inspection, WDO(wood destroying organisms)--mold is a form of WDO and since most houses contain mold, regardless of its condition, (usually in the bathroom around the shower, toilets, and sinks in the form of mildew-an organism usually classified as mold)this clause allows you to squirm out of most deals. make sure to point out to the seller, agent, lender, and all parties involved the transaction that you have discovered mold in the home and you should gain leverage in the transaction. most inspectors will overlook it in their walkthroughs, but make sure you find some during your pre-closing buyer walkthrough.

again, make sure to give yourself plenty of contingencies. in a market like we have now, sellers will acquiese to your demands.

i hope this helps in your next transaction.!

Edited: 06/26/2010 at 04:42AM

Minna Reid

Real Estate Broker · Southington, Connecticut

675 posts
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Feb 19 '08, 01:31 AM

Your state likely has a real estate commission you can complain to. It is their job to investigate the complaint and bring forward any " charges" if necessary.

Edited: 06/26/2010 at 04:43AM