They say an oral contract is not worth the paper it’s written on. Someone should have said it to a young real estate broker I know. It might have kept him out of the jam he is in now.

With the facts more or less accurate, here is the story. Embarrassed by the whole affair, my associate made me exclude his real name. Wouldn’t even help me with some follow-up fact checking.

So I’ll call him Otis, which coincidentally is my cat’s name.

Otis was hired to sell the family home of a friend he’d gone to high school with. He is around 28 now and has held a Colorado real estate license since 2018.

Otis also signed a buyer rep agreement to help the family purchase a new home. They had their eye on nearby new-builds.

What a great gig. He envisioned closing two deals and collecting maybe $30,000 in commissions. Otis is not full-time real estate. His regular occupation is a physically demanding job that often takes him out of town.

He listed the family home in late 2024. It was not a great time for sellers. Denver’s total sales volume that year would be the lowest since 1995.

Showings were scarce, with the home priced at $510,000. Otis believed it was overpriced by $50,000. In a few steps, the price was cut to $485,000.

Meanwhile they shopped for new homes. Soon the family was ready to buy from a big home builder. I’ll call it K2 Homes.

Securing that contract would be the easy part. Developers everywhere were motivated to sell, offering generous incentives like finish upgrades and interest rate buy-downs.
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Here the details get murky.

As they negotiated the purchase, Otis and his clients stipulated one thing. They would need a contingency. If they failed to sell their old home, they could terminate and get their $10,000 deposit back.

“Oh yes, it’s in there.” The K2 Homes salesperson said words to that effect, assuring them that the crucial contingency was contained in the contract.

(Cut to the chase—it wasn’t. That contingency was not worth the paper it was written on.)

They signed, and Otis continued to market the old home. The price was still high, at the insistence of his clients.

The clients made other missteps, according to Otis. They ordered custom upgrades including a floor plan revision. Their purchase price would increase by six figures.

The old home did not sell. A lowball offer came in and the family scoffed. Better to stay put and walk away from the new-build.

The builder said okay, but kiss your earnest money goodbye. Otis and his clients protested, but the missing contingency was still missing.

Put yourself in the seller’s place. You’ve bumped your own build costs by thousands of dollars. If you were ever amenable to a termination without pain to the buyer, that door has closed.

In apologetic texts to the clients, Otis admitted his mistake: He should have read the contract more closely.

They fired him. His listing agreement was spiked as well. The clients have been threatening to sue him to recover their $10,000.

Further firings followed. Otis’s employing broker let him go. He tried to contact the K2 salesperson who, he says, misled everyone about a contingency that didn’t exist. He aimed to explain all the factors and beg for a deposit refund.

But that person was no longer employed by the builder. We can only wonder why.
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Realtors do carry a kind of malpractice insurance called Error and Omissions. Problem is, Otis’s E&O policy had a $10,000 deductible. A successful claim might be no better than a wash.

Colorado realtors must use a standardized purchase-and-sale form to complete real estate transactions. That is, except when dealing with new-build developers, who often use their own contract.

The builder contracts are less buyer-friendly. There are fewer ways for a buyer to walk away. For example, many don’t even have appraisal contingencies.

Worse for realtors is that those contracts are not all the same. In the standard form, the absence of an essential detail is more evident. The right box isn’t checked; a key deadline date is missing.

It’s not that a builder can’t ever add a home-sale contingency. It does happen.

But I’ve been in Otis’s shoes. When negotiating with a builder, you’re on their turf, sitting with their salesperson and your client, maybe tired after a long day of showing homes; going over a detailed contract point by point on a big computer screen.

There is no excuse for overlooking key details—even if you’re being misled by an unlicensed sales agent who is not long for the company.

But hey, stuff happens. That’s all Otis can say now to his unhappy former clients.

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