A $40,000 Mistake! How I Recovered and Saved my Reputation

Chris Kopf Sitting on Beach in Thought

What do you do when you make a mistake? Do you own up to it, or do you hide from it? Today I want to pull back the veil and tell you about a mistake I made recently, a big mistake to the tune of about $40,000. But first, to understand the impact of the story I’ll have to take you back to my time at Ohio State University… 

I was a marketing major in a lot of different business classes, but I can remember my finance 620 professor specifically for something he said one day in class. I wrote this down and somehow it has stuck with me ever since. He said,

“In finance, in business and in life, you have the opportunity to eat well and not sleep so good or sleep well and not eat so good.”

In my real estate business, what I’ve found is there’s often an opportunity to cut corners. It can be very tempting. Over the years, I’ve observed some real estate agents that aren’t always as ethical as they should be or that don’t conduct business with the same level of integrity that I try to. I’ve lived by the motto that I don’t want to have any problems putting my head on the pillow at night. I sleep very well.

I’m grateful for the success I’ve had in my real estate business and I think my reputation and my integrity are a big part of that. I don’t cut corners. I strive to be very honest and trustworthy and to take responsibility immediately when I do make a mistake.

So here is my story.

My $40,000 Mistake on a Contract

I was representing a seller on their listing and I brought in the buyer. There was also another agent that had a buyer that was interested. This particular property had previously been under contract for over $2 million. My seller client had come to me and said $2 million was their floor and they would never sell below that. Given that there was a potential for a competitive bid, I decided to disclose that information to the buyer with the seller’s permission. I drafted a contract for a certain number to the buyer and they accepted.

As I’m sure you’ve guessed by this point, that number just so happened to be off by $40,000.

As a real estate agent you’ve taken a lot of continuing education classes so you’ve most likely heard the cautionary tale that typically at some point during the transaction, a buyer and a seller will end up talking. So it just behooves us as the real estate agent to never have a scenario where we have secrets with one or the other that we don’t want the full party to know about.

How I Owned Up to it and Made it Right

And so I was in this situation and I just felt terrible because I had made a mistake. A big one! After sitting for a moment with a pit in my stomach, I dusted myself off and contacted the seller. After great consideration, here is what I decided to say:

“Hey, in an effort to give guidance based on your approval to disclose the selling floor. I made a mistake and the number that was on the contract to buy and sell that I just sent to you is $40,000 above what it was supposed to be. I’m going to call the buyer and make this right. The difference will come out of the commissions on the transaction and won’t affect the number that shows on the settlement statement for you at the end.”

The seller was really taken aback and respected that I would do that and was understanding and agreed. I then called the buyer to let them know and they said “Well I would have never even known that. That’s very honorable.” They had had the opportunity to work with other agents but said that they had appreciated the level of information I was able to provide to them and had wanted to work with me specifically

Ultimately, this transaction cost me $40,000. It was my mistake and I felt terrible about it, but I made it right. And I feel so much better knowing that. It reminds me of the saying “If you cast your bread upon the waters, it shall come back to you”. I believe that to be true. I’m in this business for the long term and my reputation and integrity will always be more important to me than any commission on any one transaction.

The Moral of the Story

If you ever find yourself in a situation where you’re wondering what the right thing to do is, I hope you’ll remember my story. Have the confidence and the courage to make the right decision and own up to your mistakes quickly and do the right thing. You will sleep so much better at night. We all get busy and have a lot of balls in the air. In my case, I should have spent more time reviewing the contract. I had family in town at the time and was involved with a number of other transactions. I was playing in a member-guest golf tournament and was showing multiple properties that weekend. I thought I had checked the contract thoroughly before sending it off, but evidently, I did not.

Building a reputation of integrity and professionalism can take years, but it only takes one small mistake to tear it all down. So that’s my story and I hope it helps you to make a difficult decision you may be struggling with either now or in the future.

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Real Estate Coach Chris Kopf
Chris Kopf- Top 1% Coldwell Banker Agent, Speaker, Author, Global Luxury Marketing Specialist