In 2012, RZI submitted an offer to purchase a property. However, an outdated proof of funds was provided to the buyer, initiating a cascade of problems. Due to a holiday, the buyer couldn’t promptly provide the required proof of funds, resulting in poor communication, a missed fax, and ultimately, the loss of the purchase opportunity.
This bad communication upset RZI and led them to sue the broker that they were working with. Does this instance of poor communication justify legal action?
Cassie, Ali and Danielle share the details on this case and their thoughts. Tune in to hear more!
Transcript:
Danielle: Let’s dive into the details. So, this case is from Georgia in 2016, with the appeal taking place in 2015. It’s an interesting one because it involves different agent roles, which we don’t encounter often. In Idaho, agents can be full agents, limited dual agents, or simply facilitators without representing the client. This setup is less common in states like Washington, which are more buyer-focused.
Ali: Yes, makes sense.
Danielle: RZI Properties contracted Southern REO Associates LLC, a real estate company, to handle their transaction administratively. This means managing timeframes, paperwork, and other administrative tasks without representing RZI. While they don’t owe fiduciary duty, they’re still obligated to provide reasonable skill and care.
In early January, the buyers wanted to make an offer on a property adjacent to their lots. However, a series of mishaps occurred. The agent mistakenly sent the earnest money to the brokerage instead of the escrow company. Additionally, the proof of funds provided was outdated.
Despite efforts to rectify the situation, including urgent emails and attempts to extend deadlines, communication breakdowns persisted. The buyer’s fax of the updated proof of funds was not acknowledged promptly, leading to the seller rejecting the offer and accepting another.
Cassie: Wow, this is a lot going on.
Danielle: RZI Properties subsequently sued Pat and her company. They argued that the lack of communication and administrative errors caused them to lose the property.
Cassie: So, what ends up happening?
Danielle: The case was dismissed, and rightly so. Despite the administrative mishaps, Pat was not their agent and thus didn’t owe them fiduciary duty. While there were certainly communication lapses, they didn’t rise to the level of legal liability.
This case underscores the importance of clear communication and attention to detail in real estate transactions, regardless of agent roles. It also highlights the complexities of agent-client relationships and the potential pitfalls when expectations aren’t aligned.
In conclusion, while the situation could have been handled better, suing Pat and her company was unjustified. It serves as a cautionary tale for both agents and clients to ensure effective communication and diligence throughout the transaction process.
Ali: Very interesting!
Cassie: Thank you, Danielle.
Danielle: Thank you, see you next week!
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