To protect their investment, our private lenders receive:

• First lien position on the property,

• A recorded mortgage and promissory note, and

• Are listed as additional insured on the property’s insurance policy.

When we either sell or refinance the property, the lender is repaid their full principal along with the accrued 12% interest—right at closing. This setup offers private lenders a strong return without the headaches of owning real estate themselves.

When a Lender Backs Out

On one of our recent deals, we experienced a rare situation: our selected lender backed out just one week before closing. As a result, we requested a 30-day extension to secure replacement funding—a reasonable ask given our strong track record and confidence in sourcing another lender quickly.

This deal involved a cooperating agent who brought us the opportunity and represented our side. The seller had their own listing agent.

When our agent submitted the extension request, the listing agent reacted with visible frustration. While we understand that delays can be stressful, we’ve learned to keep emotions out of contract negotiations. Unfortunately, the listing agent allowed his frustration to escalate and took it a step further by directly emailing all parties—including me as the buyer.

Understanding the Rules of Agent Conduct

Professional boundaries matter, especially in real estate where clear communication channels are critical. One key industry standard is:

GENERAL RULE: No Direct Contact with Another Agent’s Client

If a client is represented by an agent, you must not communicate with that client directly—all communication should go through the client’s agent.

NAR Code of Ethics: Standard of Practice 16-13 reinforces this:

“All dealings concerning property exclusively listed… shall be carried on with the client’s representative or broker, and not with the client, except with the consent of the client’s representative or broker.”

✅ Bottom line: Direct contact with another agent’s client is only allowed with explicit permission.

As a licensed real estate broker who values both my credentials and professional relationships, this is a non-negotiable standard. I never contact another agent’s client directly—ever.

How It Ended

Despite the listing agent’s breach of protocol, we remained calm. About 10 minutes after receiving his email, my agent texted me to say the deal was off. I wasn’t upset—we understand that not every transaction will go smoothly. I reminded my agent (who is new to the business) that while this kind of emotional response is unfortunate, it’s up to him to address the professional misconduct if he chooses.

Ultimately, we signed a mutual release and released our $500 earnest money deposit to the seller. No hard feelings—it happens. We strive for professionalism, but we’re also human.

Real estate deals can be unpredictable. Funding can fall through, and emotions can run high. But professionalism, clear communication, and respect for the rules of engagement—especially when it comes to working with other agents—are non-negotiable. By staying focused, calm, and compliant, we protect our business, our partners, and our reputation, even when a deal doesn’t close.