By Sara Huebener
The Star Tribune article in Saturday's paper on the Carver couple who packed their boxes and quit their jobs the day they received a $10,000 earnest money check as downpayment for the sale of their home, sadly, was misleading to consumers. The earnest money check bounced, and the home sale fell through, causing the sellers to blame the buyer's realtor for the $20,000 they allegedly lost as a result of the failed sale, slating the reason as the buyer's agent's failure to conduct a background check on the buyer before submitting an offer on the property, which was located in Carver.
First of all, I want to state that we have no affiliation with either of the agencies involved in the story, so are not partial to either agency. Secondly, we feel badly for what happened to the seller and understand that their situation was truly unfortunate, if not quite uncommon. Realtors do everything possible to avoid these types of scenarios.
That said, my first thought on this is that it is the job of the loan officer, not the buyer's agent, to make sure that the buyer has the financial means to purchase a home. Realtors rely on preapproval letters from the buyer's lender to verify that the buyer is qualified to purchase a home, and for the dollar amount for which the buyer is qualified. We do take measures to attempt to prequalify the buyer based on a series of questions used to determine motivations, but the true preapproval must be done by a qualified loan officer. In the story, the buyer's agent had received the preapproval letter and submitted it with the offer. In this case, the buyer's lender was from out of state, which is not uncommon, however most realtors prefer that the buyer is working with a reputable lender who is known, trusted, and local.
In this case, it turned out that the buyer was a convicted felon with numerous evictions - three in this year alone. While loan officers do not conduct criminal background checks, often times factors associated with criminal behavior reflect on credit scores, which can raise red flags for loan officers. Clearly in this story, the loan officer was a fake. And in that regard, I would argue that the buyer's agent did have some liability in verifying the legitimacy of the lender, but in conducting a criminal background check, probably not.
The article said the buyer wanted to move fast, and the story made clear that the sellers packed their house and quit their jobs the day the earnest money check was submitted, despite the fact that their agency continuously warned that the transaction was risky. I am not sure that the blame for this falls on the buyer's agent. It seems to me that the seller was equally eager to move quickly, perhaps because the offer was for full price with a quick closing date. If the seller's agent felt the transaction was shaky, she should have communicated that to her sellers. If she did indeed communicate that to her sellers, then the blame for quitting their jobs does not lie on the buyer's agent.
My final thought on this is that agents (buyer's agents and seller's agents alike) have no incentive to have clients enter into purchase agreements that are "no good". Not only is it a huge waste of time, but dealing with the aftermath is a headache as well.
What happened to the Carver couple is unfortunate, and we hope people realize that this is an uncommon situation. Regardless, the Star Tribune was somewhat misleading in how they presented the culpability of the agencies involved in the story.