Bernice Ross
As Realtors, we often deal with volatile situations where emotions are running high and disputes are common. What steps can you take to limit your exposure in each transaction that you conduct and if you must go to court, increase the probability that you will prevail?
If you have ever served on a jury, been sued or participated in a Board of Realtors arbitration, chances are you witnessed this phenomenon first hand. In fact, sometimes the testimony from the warring parties is so diametrically different that they seem to be describing two entirely different events.
Elizabeth F. Lotus, one of the most respected experts in the field of memory research, has spent decades conducting extensive research on eye witness testimony. While juries tend to believe what eye witnesses report, her research demonstrates how false memories are created.
In one of her most compelling studies, subjects were given accounts of four different events, three of which they had experienced and a fourth that was fiction. A relative of the person provided realistic details for the false story. After each person read all four stories, the person was asked if they remembered each event. About one-third of the subjects reported partially or fully remembering the false events.
Based upon this and subsequent studies, Loftus concluded: “Just because someone says something confidently doesn’t mean it’s true. … Some 75 percent of the wrongful convictions for rape and murder, including a number that led to people being scheduled for execution, were based on eyewitness testimony.”
Best Practices for Protection
Given the current research about how memory works, it seems fair to say that our memories are much more fallible than we realize. This means that we often get the facts wrong simply due to how our brains are wired.
To minimize the risk of being involved in a dispute, here’s what to do:
Procuring cause: Commission disputes, especially over procuring cause, are extremely common. In most cases, having your buyer sign an exclusive buyer agreement as soon as you agree to work together is the best way to show that you are owed the commission.
Even if the buyer refuses to sign an exclusive buyer agreement, most states require that you establish your agency relationship when you first start working with the client. Avoid taking the buyer out to see property or writing an offer until the agency documents are signed.
To further protect yourself, use Google Maps or other mapping applications to lay out your showing itineraries including exactly when you showed the property. Also, be sure to note in your CRM or calendar the specific time you contacted the listing agent to arrange the showing.
Name, date and time of all showings: It’s common for listings to have a six-month protection period once the listing expires. If the seller lists with a different agent, be sure that both the listing agent and the seller receive a list of the buyers who saw the property while it was listed with you. To enforce the provision, FedEx the seller and the listing agent with a written list of the buyers covered by the protection period. Do this no later than the day the listing expires. In most cases, if one of those buyers purchases during the protection period, you’re due a commission.
Use digital signature apps that offer transaction tracking: If you’re not using a digital signature app such as DocuSign that offers transaction tracking, start doing so now. These apps provide a powerful digital paper trail that includes every email, text and document that is sent during the transaction, to whom it was sent and when it was opened. If there’s ever a dispute with a client who claims they didn’t receive something or know about something, you will have indisputable truth as to exactly what happened.
Document, document, document: When you’re busy, you seldom think about documenting what happens during your transaction. If you’re not in a regular habit of doing so already, if there is even the slightest chance of a dispute, document even the smallest details. Make notes of any conversations you have with those involved, send an email/text summarizing your understanding of what happened and if it’s incorrect, ask the people involved to share their version in writing. This is another way to create a digital paper – use it!
Disputes are part of our business, but if you take the steps outlined above, you’re much less likely to experience a dispute – and if you do, you’ll be much more likely to prevail.
Bernice Ross is a nationally syndicated columnist, author, trainer and speaker on real estate topics. She can be reached at Bernice@RealEstateCoach.com.
