Can Someone Else’s Stupidity Hurt You?

A few years ago I was in a battle with a buyer for $2,000 in earnest money. The buyer decided to wait last minute to complete inspections (not something I recommend). Thereby the inspection report was delivered the day the option period ended.

The buyer’s agent submitted a repair request and an option extension along with a termination letter at 11:55pm local time. The repair request was minor, have the AC unit serviced by a licensed professional, so I agreed to complete the request but not to extend the option period. The buyer agreed but when the AC technician found no issues with the system the buyer wanted to call a “friend” to have a closer look at the unit. The “friend” was a salesman for a HVAC company (conflict of interest?).

The “friends” report was slightly different than the inspectors to say the least. He recommended I install a brand new AC unit (a system they sold) totaling $8,500. When I declined to install the system due to the AC functioning properly and meeting the inspector’s requests, the buyer wanted to terminate the agreement. It was clear the buyer and I met eye to eye on terminating the agreement, but what about the earnest money?

It was clear the buyer and I met eye to eye on terminating the agreement, but what about the earnest money?

The buyer and the buyer’s agent thought the buyer should get the earnest money back due to the submission of the termination notice at 11:55 pm if I didn’t agree to the inspector repairs. I agreed to the repairs and didn’t extend option. In other words, I completed everything a reputable home seller should. But the buyer and the buyer’s agent saw things differently. They believed the “friend” and his conclusions to replace the AC unit, stating I didn’t fulfill my requests and therefore earnest money should be returned to the buyer. Since we couldn’t agree we turned to the contract. My realtor knew the contract like the back of her hand and she knew we would get the earnest money back due to a line item in the contract that states, “Notices under this paragraph must be given by 5 pm (local time where the Property is located) by the date specified.” They submitted all the paperwork at 11:55 pm. Thereby I received the earnest money from the buyer for tying my house up for +20 days.

This isn’t the fault of the buyer. It’s the buyer’s agents fault. The buyer hired the agent with the intention the agent’s expertise could be leveraged to safely and effectively purchase a property. Unfortunately in the real estate business there are low barriers to entry (even for realtors), meaning any bum with no/low credentials, and even less morals, can take advantage of innocent home owners.

To home owners and investors alike, complete your due diligence on everyone you hire, even if they are a friend or family member. I’m talking about everyone from the roofer to the cleaning lady. With today’s technology it takes little to no time to Google the person and/or company. There’s no need for you to lose thousands of dollars and endure unneeded stress because of someone else’s stupidity. Remember, “When a man with experience meets a man with money, the man with the experience ends up with the money and the man with the money ends up with the experience.”