Sponsor A Child

Saturday, March 24, 2012

When Verbal Agreement is Not Good Enough

I was told this story by a real estate negotiator (REN), C.  They were in a co-broking deal.  One prospective buyer wanted to buy an office, and said that after the SPA, he wanted to move in and rent from the owner as a tenant.  The owner's REN said, that is of course not a problem; in fact, the owner would even let him use the office for no rent since he was the buyer and it was only for a few months. Based on this, the buyer was very happy, he didn't even negotiate the price very much, and then booked the unit with his deposit.

Then when the SPA was about to be signed, the owner refused to have the buyer move in with the so-called "no rental" before the completion of the deal. The buyer was disappointed, the owner was adamant with his decision, so much so that if the buyer refuse to sign the SPA, the owner can then forfeit his 2% deposit.  The buyer then confronted C (the co-broking REN, not the one who promised the free rental deal). C then spoke to the owner's REN and asked about this breach of promise. The owner's REN said, "Well, nothing can be done, there is nothing written on the agreement as conditions to the sale".  C was furious, and told him: "Look here, although it was not written, you said it, the buyer heard it and I was there. How can you do this?  Try to persuade the owner."

At the end, the owner still refused to allow early entry into the office, the buyer had no choice but to wait out the completion of the sale (because he didn't want to lose his deposit).
C, from then on, was very careful who he co-broke with, and tried to look after his client's interest rather than go through with any difficult deal.  While there are 2 types of RENs, the ones who don't care about anybody other than themselves, and the ones like C, who would really look their client's interest.
The lesson for all of us here is, whatever is promised, get it down in writing.


  1. a verbal contract is valid and binding but it is a bit difficult to prove.
    take this as a lesson.
    sad for the buyer.

  2. Agreed, Anie. No point arguing who said what later on, just get it agreed and signed.