Was Jack like this at the other persons house? Did he play there? Was he housetrained there? Was there a husband there that interacted with him? How was the sister and mom? Were they rather shy?
Just trying to get a better picture. Jack may not have been socialized as well as he should have been or he might just miss his mom, sister and human family from there. Is he neutered? An intact male will have "mistakes" ie..marking at 7 months of age, your house is new and smells different and he may be confused, or he may just not be completely trained and it will take some time and lots of patience..hopefully your DH is ready for this as small dogs are hard to catch in the act...
As for playing with the kids, give that time. Have the kids sit on the floor and be calm, see if he comes to them that way. If not, you sit next to one of the kids and let him know that the kids are "ok" but do not force him. Treats are great but I do not let little ones give treats as this teaches Jack that it is ok to take food from a small childs hand which causes stress later when your tiny one is walking around with food in his hands. Just my opinion though.
Hope that some of this helps... |