3 Mistakes New Agents Must Avoid That Have the Potential to Blow Up a Deal

Eager to close deals, new agents will dive into the deal-making process glossing over some critical aspects that have the potential to blow up the deal. While it is true that even seasoned agents make costly mistakes, there are some mistakes that can and should be dispensed with from day one. Such mistakes can not only blow up a deal, but they can taint an agent’s reputation, especially if the mistake becomes public knowledge. However, learning fast and moving quickly to counter mistakes and mitigate effects of such mistakes can help reduce the repercussions of making such mistakes. In this article, we go through three such costly mistakes that have the potential to blow up a deal. New agents, these mistakes must be avoided at all costs.

Lack of Authority to Sell

This is a classic mistake most new agents make, and it always costs them a sweet deal. An agent works with a seller through the sale process. Everything looks great and the seller has accepted the offer and the buyer has the funds ready. When in the final stage and it is time for the seller to sign the sale documents, it emerges the seller has no legal mandate to sign over the house. As it may very well turn out, the house may belong to a different entity such as a trust or is held as security for a loan or late mortgage payments. In such a case, the mistake the agent made was not to ask and verify whether the seller has the legal mandate to sell the property. Doing this at the very beginning can help avoid such a costly mistake.

Making Verbal Agreements

This is another classic mistake new agents tend to make. In a quest to finalize a deal, the agent will make and accept verbal promises that are not documented in the sale documents. After doing this, complications arise when these verbal agreements must be honored. In most cases, cost aspects that were not considered and other challenges make it hard to honor such agreements. What results is either a legal battle or one party walking away from the table at the last minute because of such agreements. To avoid this, always make sure all agreements are properly thought through and documented. Making a verbal promise just to convince a buyer or seller is a sure recipe for disagreements and a blown-up deal down the road.

Lack of Buyer/Seller Education

Lenders are finicky about the fine print. If something does not add up, they will quickly pull financing, leaving the buyer and seller high and dry. As the agent of record, either working with the buyer or seller, it is your duty to ensure both parties are well informed as to what their obligations are throughout the sale process. Lack of this education will lead to costly mistakes like improperly filled documents, incomplete supporting documents and other issues. Getting all parties properly advised is a strategy that will avoid such a last-minute pulling of funding, something that can scuttle a well-orchestrated sale.

Conclusion

Costly mistakes cannot be 100% avoided. However, it is possible to minimize the possibility of such mistakes happening. To recap, one, always ask and confirm that a seller as the mandate to sell the property, two, never make verbal agreements or promises just to close a deal, they will come back to haunt you, and three, educate and inform both buyers and sellers on what is required to successfully conclude a sale. If you can knock out just these three mistakes, you will avoid lots of blown up deals and red-faced moments in your real estate career.