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Real estate horror story: How one person can can cause nightmares

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Real estate horror story: How one person can cause nightmares

Dimitri Kalkounis

After 19 years in corporate leadership roles, Dimitri transferred his business experience into creating a successful real estate company...

After 19 years in corporate leadership roles, Dimitri transferred his business experience into creating a successful real estate company...

Sep 12 11 minutes read

Gather ‘round the fire kids, and get your marshmallows ready, because you’re in for spooky tail of nightmarish proportions! Imagine a real estate deal that should have been perfect, but then a series of horrible events perpetrated by a malevolent lawyer who acted so unprofessionally, some wondered if they came from... the below place.

Of course, we’re only kidding a bit here. But this story has an important lesson: Surround yourself with a team of dedicated professionals who will work for your best interests, especially when things get unbelievably tough. And sometimes they will get tough. Like in this true story I’m about to tell you here.

Our story starts with a happy couple. They’d recently had their first child and they’ve realized the house we helped them move into a few years back was starting to feel a bit small. It was time to upgrade.

No rush though, they wanted to take their time to find the right forever home. We take a couple months to casually look when, one day, we find the perfect house. No it wasn’t haunted, if that’s what you’re asking. That’s not the scary part of the story. In fact, it was almost new, well built, shiny and clean!

It had everything they wanted: A private driveway, a garage with an entrance to the house ( you know, for those cold days bringing in the groceries), a master bedroom with an ensuite bathroom, a soaker tub, in fact it had three other bedrooms, each with their own bathroom. It’s the kind you see in design magazines. It even had a walk-in closet with a window. I know! Amazing, right?

How could such a place stay on the market for long? Well, actually, it wasn’t on the market. They saw the house, and it was up to us to approach the buyers. Even though they’d just build the place a few years back, we made them an offer that made them excited. We worked with a great mortgage broker who is able to help the mortgage approval along, even though the wife wasn’t working because of mat-leave. We get through the home inspection. We even have the permits and city inspection reports provided to us from the sellers and their real estate agent. We had a firm deal on a dream home that wasn’t even for sale! How could anything be more perfect than this?

All we needed to do was submit everything their lawyer.... Enter our client’s lawyer.

If you’re not familiar with the real estate transaction process, the house only becomes the buyer’s after the closing date and the money changes hands. Lawyers are needed to make the exchange and further protect the clients interests. We usually can recommend two or three law firms whom we’ve worked with before and know to be extremely competent (or with any professional, really). But the clients say they’ve got a lawyer. So no problem, right? We send everything over, and wait.

And wait.

“Did you receive the package?”

A few days go by.

Nothing.

So we wait some more.

Nothing.

A week goes by!

This isn’t right. We should have heard from the Lawyer by now.

We contact our clients and ask if they know what’s going on. They explain they’re a friend of the family, they have known them forever and they don’t do a lot of real estate law so they must be busy with other stuff…. “It’s coming” the clients tell us. “We just have to wait.”

Okay… But too busy for a call? An email? A text? No one is that busy. But we need to trust our clients. So we wait. And wait some more.

The clock is ticking and without the Lawyer doing their job, the dream home will be lost. We call the clients again.

“Hey, can you call your lawyer? They haven’t confirmed they have everything. Are they going to be okay for closing in 3 weeks?”

“Yes, I spoke to them,” the clients say. “But they have a bunch of issues with the paperwork. They’re emailing you.”

“Umm... Sure, happy to discuss,” we’re thinking. But why is this the first we’re hearing about it?

Sure enough, we receive an email with a list of items they’re taking issue with in the paperwork. These are small things, but forget email, they may never respond, I’m taking a five-minute-call-to-clarify.

So we try calling. No answer. We call the buyer, and they’re able to set up a call later on that evening. That’s right, they were too good to take our call the first time and had to have their client demand a phone call on their behalf.

The scheduled time comes and we start talking. The issues, as we already knew, aren’t really issues. This was our first battle with the unprofessional Lawyer. It was hellish, nightmarish, insane, almost driving us to the brink of madness! Here’s a short paraphrased sample of what our side of the conversation was like:

“No, there’s no apartment in the basement… Yes, we know there’s a fridge in the basement... Yeah, but that doesn’t turn it into an apartment, it’s just a beer fridge there isn’t even a stove or kitchen… Why are you yelling at me? ... Yes, we’re aware of the city regulations regarding basement apartments… Did you even ask your clients if they’re looking for a home with a basement apartment? Because we did, and they’re not interested in using it that way… We can take the fridge out of the basement if it will make you happy… Wait, are you just reading the paperwork now?… ”

It was crazy! Eventually the battle ends and our clients call us to ask for advice.

“Should we fire our lawyer?” they asked.

This puts us in a tough spot. On the one hand, it’s not my place to make decisions for our clients. On the other, we’ve got a clear unprofessional pattern and the clients need help. I have only one option: Give facts and let the clients decide.

“But I will caution you,” I said.

“Your deal closes in three weeks. If they keep delaying and acting in this manner, it could mean serious trouble for you.”

And I mean serious. They’d already sold their house, knowing that they’re moving into another. If things fall through, they’ll be homeless or worse owe thousands in damages.

“So if you are going to change, change now,” I advised. “If you trust them to not let you down, and finish the job, let them finish the job.”

They kept the lawyer.

That’s when things become unheard of.

A week goes by, and the phone rings. It’s the mortgage broker.

“Dimitri, I just got a call from the bank,” the mortgage broker tells me.

It’s one of the big five major banks here in Canada by the way.

“They said our client’s lawyer is not accepting the banks standard paperwork for the clients mortgage.”

“Excuse me?” I said. I can’t believe what I’m hearing!

“They’re asking the bank to alter their contracts. Their standard documentation.”

No one does this! This is the bank we’re talking about here. Who does this lawyer think they are? This is a special kind of crazy.

“I’ve never had a lawyer ask a bank to change their mortgage contracts before,” the broker explains.

“Never! Don’t worry i'm dealing with it” the mortgage broker explains.

Some time passes...I get another call.

It’s the seller’s agent on behalf of the seller’s lawyer.

“Hi, Dimitri, its three days to closing,” they say.

“We are having an issue with buyer’s lawyer. They’re refusing to send paperwork to our lawyer unless we release private and confidential information to them on the sellers that are not relevant to the transaction.”

I’m thinking, “You can’t be serious! Is this some horrible hidden camera show?”

They continue on the line and I’m listening in complete disbelief.

“Frankly, they are unprofessional, unethical, and once this transaction is completed, our lawyer we will be taking them to the law society on their actions. I’m sorry but if your buyers can’t close because of this issue, the seller will be seeking compensation. Can you speak to your buyers and let them know what’s going on? They may not be aware of this situation.”

This is where the nightmare reaches its fever pitch. Not only is this Lawyer trying to buffalo the bank, they’re bullying the sell with three days before the closing date, putting their own client in legal jeopardy? It’s like the Lawyer wants to torpedo this deal. So I call the clients, they tell me their lawyer has ghosted them. It’s been over two weeks and no answering their own calls. Did I mention it’s three days until closing?

Luckily, this story has a happy ending.

We setup our clients up with a new lawyer from our list of vetted professionals. We work with the seller to negotiate an extension on the closing date. They agree, quite happily in fact, since they want the deal to go through just as much as our clients do, even extending our extension by a couple days as a show of goodwill. But it turns out, we didn’t even need it. Working with the new lawyer, myself, the mortgage broker and the seller’s team, we were able to close within the three days.

It’s a cliché to say “a chain is only as strong as its weakest link,” but in this instance we had a link that was actively working against us. They lacked experience and context and had completely the wrong attitude.

This kind of story highlights the need to build a solid team of professionals around you when you’re buying or selling real estate. I’ve shared this story to many in my field and their jaws drop.

“Why did you stick around?”

“Why didn’t you just walk away? Your part of the transaction was completed.”

That’s not what we do. What would have happened if we did walk away? Our clients would have been completely helpless, potentially left without a home and a big fat lawsuit on their hands. That’s just not right!

We’re interested in building and maintaining relationships, not getting a commissions check and getting out. Everyone who knows me can attest to that.

If you surround yourself with a great group of people who know what they’re doing and are willing to work for what’s truly in your best interest, then you’ll never have to suffer this kind of nightmare transaction in your life.

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