10 Tips for Settling Disputes Without Going to Court

March 1, 2007

Between attorneys’ fees and time spent in case preparation, going to court is often a no win even if the ruling is in your favor. Try these options instead.

1. Go to the source of the trouble. If there’s a dispute over the property’s condition, getting all the parties and the arbitrator if one is involved to meet and discuss the issue at the actual site sometimes gives everyone a chance to see the actual damage and resolve any issues.

2. Put the issue in perspective against the greater benefit of reaching an agreement. For example, if a seller refuses to make a repair requested by a buyer, you can present the cost of the repair as just a small reduction in the profit the seller will realize. Or point out to the seller that the cost and inconvenience of making a repair are small compared with the need to begin conducting open houses and showings again if the offer is rejected.

3. Appeal to people’s sense of fairness. Most people are reasonable, so use an argument such as, “If my clients agree to pay an extra $6,000 for the house, it seems only fair that you’d be willing to leave the custom draperies in the bedrooms.”

4. Keep good records of who said what and when. Sometimes disagreements occur because people truly don’t remember what they said or agreed to. Keeping careful, detailed notes is an excellent way to remind individuals of past agreements and prevent disputes. One easy way to keep notes on hand is to create a folder in your e-mail program for each transaction, then file the pertinent e-mails there. E-mail notes to yourself about phone conversations and verbal discussions and file in the same folder.

5. Assume the best. Always operate on the assumption that the other party is acting in good faith and that the dispute can be resolved.

6. Talk it through. Make every effort to negotiate a dispute between the parties before it escalates and ends up in arbitration or court.

7. Keep it cool. Getting angry and making personal attacks or using aggressive tactics to bully the other party will only escalate a dispute.

8. Take a break. Stop discussing whatever it is you disagree about and give everyone a chance to cool off. Sometimes that can diffuse the dispute before it gets too serious.

9. Ask each party to the dispute what the ideal solution would be. Although all parties won’t get just what they desire, this exercise often helps identify the real issues of conflict.

10. Honor your obligation to arbitrate. REALTORS® are required by Article 17 of the NAR Code of Ethics to arbitrate contractual disputes with other REALTORS® and with their clients through their local board or state association. Requests for arbitration are generally made by a REALTOR® principal. For other disputes, the Better Business Bureau (www.bbb.com) also offers a dispute resolution service, as does the Counselors of Real Estate (www.cre.org).