Here are five key lessons for salespeople to remember when things go wrong in a real estate deal.

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1. Be careful if anyone tries to blame you for what has happened.

It goes without saying that when problems arise, it is easy for buyers or sellers to try to blame the salespeople for what has happened. In my experience over 34 years, it is rarely the agent’s fault when deals don’t close. You may feel sorry for the clients, but that is all you should feel.

2. What if the client threatens to sue you for what has happened?

Buyers and sellers think that if they threaten a lawsuit, somehow the agent will agree to pay part of their damages to end the matter. Remember, as long as the agent has not committed fraud, they are protected against any lawsuit by their errors and omissions insurance policy, meaning that you don’t pay for your lawyers to defend you. The client will typically be asked to pay at least $5,000 just to retain a lawyer to sue you, with thousands more still to come. In my experience, once clients see how much this is going to cost them, they end any talk of lawsuits.

3. What if the client threatens to report you to the real estate regulator?

Somehow buyers and sellers are of the mistaken belief that the provincial real estate regulators are collection agencies for consumers. Not so. While regulators are supposed to investigate every complaint made against a salesperson or brokerage, they are for the most part looking at whether the salesperson or brokerage followed their duties under the provincial acts for the protection of consumers.

4. How do I demonstrate to the regulator that I have followed my obligations?

Always make sure that your paperwork is properly documented and that you have a written record of it. This includes making sure that the Working With a Realtor, Buyer Representation Agreement, Listing Agreement (and any amendments thereto) and the Agreement of Purchase and Sale have all been carefully explained and signed and copies have been delivered to the client. Also make sure to document any instructions in writing as well, to avoid any misunderstanding later.

5. Always speak to your broker or manager before responding to any complaint or potential lawsuit.

It is always stressful when someone alleges that you made a mistake and that they are going to suffer a loss because of what you did, or trying to blame you for their situation. Resist the temptation to say something you may regret later. Try something like this as an answer: “I am sorry you feel that way. I will review my file and my notes and will get back to you.” Then go and discuss this with your manager or company lawyer and figure out what your next step should be.


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