By Dave Robison
My brokerage had one crazy month a few months ago. We had five buyers who failed to perform on a contract and lost their earnest money. Now in Utah, getting the buyer’s earnest money is supposed to be as easy as the buyer’s broker writing a check in about 24-48 hours. But in all five cases it was a fight, with hours of discussions and arguments. In the end, our sellers received their checks — although, in some of the cases the buyers and their agents were very bitter about turning the money over to the seller.
In the midst of the stress, there was one agent in particular who shined through. I believe this person will always be more successful than others (and he is, actually). His attitude reminds me of the attitude held by one of the most successful people I have ever met: Bill Child.
Bill Child sold his furniture store called RC Willey to Warren Buffett. Bill met with me and several friends and told us his story. I also read the book written about him: How to Build a Business Warren Buffett Would Buy. The great thing about Bill is that his attitude toward working with others never changed from the time he took over RC Willey to when he sold it.
Bill took over the business when his father-in-law died. He didn’t realize it at the time, but the company was laden with customer service problems, debt, and tax burdens. Bill turned all that around. For example, the company had sold an appliance that later became known to have a defect. There wasn’t a manufacturer warranty or guarantee on the product, but Bill wasn’t about to let his customers down. He took on the responsibility himself to do the repairs on all the units, even though he knew it would make his company go in the red. Most companies would just blame the manufacturer and keep their money in their pockets, but Bill’s customers were his No. 1 priority and he took the responsibility himself when legally he didn’t have to. He cared more about his relationships and his customers than he cared about profits.
Now, I don’t know the details about all the conversations the agents had with their clients regarding deadlines and earnest money, but I do know the particulars on a couple of the transactions. We can argue that the clients should have read the contract and been aware of his or her duties, however, one particular agent believed in something different. The agent told me that it was his fault because he didn’t advise his client of the looming deadlines, nor did he advise his client properly on his options at the time of the deadlines. As a result, the agent said he would pay the damages himself. In one of the other cases, the agent didn’t even know they had lost their client’s earnest money. The agent and his broker didn’t understand the specifics of the contract. They let their client lose the earnest money and didn’t cover it for them.
Which instance would give the buyers confidence about working with the agent in the future? Which situation would create more referrals? I’m grateful for the agent that took responsibility because they believe in raising the bar in real estate. That agent believed in the Bill Child way: Taking care of your customer even if it means losing money on your bottom line.
By the way, the agent who took care of his client ended up helping that person purchase a more expensive house! The other agent’s client who lost their earnest money…isn’t buying anything now.
Dave Robison, known as “Utah Dave,” is broker/owner of UtahDave.com Neighborhood Experts.