I'm not the first to lament what stupid things some agents do to tarnish our profession. Incompetence, malfeasance, shoddy standards and putting their own needs ahead of the client's have been well documented. It isn't much fun being the first licensee the person speaks with after a bad experience with their last agent.
Earlier this evening I met with a home owner who had just ended a 6 month listing contract with another broker. His experiences made me sad, to say the least. The curious thing was how a well priced, beautiful home like his could have expired unsold. The answer was that it WAS sold, but the deal died after he'd been in contract for 2 months. The instances of poor brokering and bad advice just kept piling up as he explained.
- After he accepted an offer on the home, someone knocked on his door with a $30,000 check. They had been trying to reach his agent but couldn't get a call back. They wanted to buy the home. His broker never returned their call. So, in desperation the buyer knocked on his door. It was too late, as contracts had been signed not long before.
- The buyer's downpayment with the signed contract was half what they agreed. His agent told him that they shouldn't worry over such a detail, as it would close in 45 days anyway.
- The buyer applied for an FHA loan, but the contract forbade that sort of financing, because it was a condo in a complex without FHA approval.
- The buyer pumped the contract price up $20,000 to finance a seller concession without disclosing their need for a concession in the beginning. His agent told him not to sweat this, and that it would close quickly.
- The house under appraised. When the seller's attorney demanded proof, it was found to have appraised out just fine,
- The buyer was turned down for a loan after the house had been off the market and under contract for the previous 2 months.
- Given the bad faith displayed by the buyer, the seller decided not to release their downpayment. His agent screamed that he could not do so. The seller wondered aloud who the listing broker worked for. I don't blame him, nor does his attorney.
- When the discussion of extending the expired listing came up, the seller wanted to renegotiate the commission. The broker told him to take it or leave it.
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Hi Philip,
Thank you for an informative post. A few bad apples causes nagative image to real estate professionals.
John Pusa
Sad to say that in most states the "multiple choice exam for licsensure takes only a 75% correct to pass and be licensed to wreck havoc in some home owner's or buyer's life.
My questions is, what remedies are available to that owner/seller and will they avail themselves of these remedies??
Probably not. They won't even take the time to file a complaint with the BOR or Real Estate Commission/Board of that state.
They should but probably won't.
Philip,
I enjoyed the read but not the situation. I got a kick out of Lenns comment #2
"Sad to say that in most states the "multiple choice exam for licsensure takes only a 75% correct to pass and be licensed to wreck havoc in some home owner's or buyer's life."
That license does have a lot of responsibility.
If I remember correctly you have to get over 80% correct Multiple Choice Answers in NJ to pass. Not much better in term of entry standard...
Philip? I have seen this too as agents are reluctant or slow to call back if they have a ratified contract. It is unfortunate because he would have had a back up contract in place. In this time of our markets those back up contracts are coming to fruition.
You forgot one other person to blame. That is the loan officer who was handling the buyer's loan application. The contract should have been read so the loan officer should have been aware that FHA financing was not an alternative. Even if the condo complex was not FHA approved, it was still possible to get spot approval for that complex. Finally, why did it take 2 months for the loan officer to finally realize that this borrowr would not be approved?
Here's what I don't understand: The house under appraised. When the seller's attorney demanded proof, it was found to have appraised out just fine... Isn't there a remedy for lying?
Mike in Tucson
Mike- It's all agent doubletalk. A problem with the appraisal morphed into an issue with the FHA eligibility of the complex, which morphed into half a dozen other issues which 3 blind mice would have done a better job of preventing.
J Phillip, I make my livbng listing expired listings. It's sad to say the least. There is no reason for any listing to expire. Price it right. Do the job right. And get it sold. It's simple.
The sellers in your example got screwed.
Hi Philip! That is unreal! Here in NY you need to get 70% or better to pass and get your license. But, the test is really hard. Too bad we can't test for honesty and integrity. Consumers should file complaints with their state but most never do. Why? That in itself amazes me.
Great post Philip and have a great day! :)
I feel like there are bad eggs in every profession. We deal with people at a most critical time and our bad eggs get amplified because of it.
Many agents thru their actions ,CLEARLY represent THEMSELVES first in every transaction !!!!!!!!!!!!!!!
It's too bad that the other agent really wasn't properly supervised. This is the sort of behaviour that is objectionable, and if the broker were involved things might have been different.
The again, the broker might be just like that too!
Brian, The broker is worse.
Phil--this is a tale we hear too often. Unfortunately, stupid and lazy are in every profession. Most unfortunate of all is that in our profession stupid and lazy can have devastating ramifications. Fortunately, the seller has now crossed paths with one of the "good ones"...best of luck to you and your seller!
Regarding Lenn's observation, I have to agree. It often seems that the pre-licensing education most are given is geared toward simply "passing the test", leaving them with a license and just enough knowledge to be dangerous.
J.P.:
A $20,000 seller's concession and a downpayment half of that agreed to - the seller should not have signed the contract of sale. I think the seller's attorney should be added to the list.
I agree that the standard to pass the test and get licensed is too low. Poor or completely lacking broker supervision only compounds the problem.
Good grief, this agent missed just about every place in the contract it could fall apart. Amazing that the agent actually thought the seller would relist, but even more amazing that the seller would consider doing so, even with a lower commission. This deal was out of contract right out of the gate with a deposit less than agreed to - that alone should have entitled the seller to retain the deposit. And "underappraising" - I believe that's called fraud.
a great example of one thing after another. Never get behind this guy in a grocery store
Tony
Phil, where the heck was the buyer's attorney. The seller read the contract, no? Saw the concession and still signed??? The seller didn't use a real estate attorney who then didn't pick up on the discrepancy's??? The house under appraised but then he found out that it didn't. Phil honestly I would love to hear the other side of this story because frankly some of it sounds a bit odd. It wasn't just the broker but the attorney who was incompetent as well plus it doesn't sound like this seller fully understands what happened. I had a second buyer come forward and knock on a door as well but the contracts had already been signed and it wasn't true that they have ever tried to reach me, just wanted to go behind me.
There are a lot more inexperienced agents out there than experienced ones. Sounds like that transaction had inexperience on both sides... and the lender's side too. Best you can do is show your clients that "not all REALTORS are the same." They deserve a smooth clean sale. Good luck.
Pam
There are a lot more inexperienced agents out there than experienced ones. Sounds like that transaction had inexperience on both sides... and the lender's side too. Best you can do is show your clients that "not all REALTORS are the same." They deserve a smooth clean sale. Good luck.
Pam
Yikes! That's terrible. I find it amazing. It's really NOT that hard to follow and document the outline of a contract...
deposit (check)
inspection (check)
loan approval (check)
appraisal (check)
etc. (check)
It's like a grocery list. As one thing is completed - to the term of the contract - you check it off and move on. *eye roll*
For the life of me, I still can't figure out why a buyer would say "I'll pay $XX earnest money and then only give half!" Unbelievable!
Poor sellers - They now have to start all over, only this time, with the added distrust of their new agent. Distrust doesn't help any situation.
Poor buyers - They just don't realize how this hurts them as well. All the times that their credit is checked by this agency and that company reflects negatively if there are a lot of them. To start all over again means their will be a slew of new lenders, etc. checking their credit.
Poor previous listing agent - He/she now has the stigma of a listing that expired due to their ineptitude at doing their job correctly.
Poor Philip - You've got to deal with all of this baggage and do an even better job than you normally would so that you can help restore the seller's faith in real estate professionals. You have an uphill battle, my friend. I wish you all the best!
Emcee
There are so many bad agents out there that get in the way of the transaction, they need to learn that they are agents of their clients not the principals, too many times i get a immediate response, my client will never ....
Never make decisions for the client, be available, communicate and be professional.
Sadly sellers often think selling a home is a piece of cake. Unfortunately, some agents do as well. A lot of work and expertise go into it. One wishes that there were a fair way to warn unsuspecting customers of the few bad apples out there. I am afraid that NAR, and our state & local associations do little to police our ranks. Frequently it takes the state or an attorney to get them to mend their ways or get out of the business.
Philip,
There is a positivie to all this. You got the listing and will do a great job, and yes there is a blog post and many of us commenting. Thanks
This is the kind of agent that makes it tough for the rest of us. What a horrible situation!
And why in the world consumers don't report to the Real Estate Commission is beyond me. NAR and our state and local associations can't do anything to vet the bad apples if they go unreported!
Have to agree that one of the worst feelings in the world can be when you are the first agent a client or customer is talking to after a bad experience with another realtor. The natural instinct is for one to feel like every realtor is basically the same and if you have been messed over by one another will do exactly the same
Sounds like the agent was representing his/her best interests only. I am never amazed anymore when I hear the stories of incompetence. Good thing they are connected with you now.
This is another classic example of an Agent working for themselves and not the client and forgetting they actually work for/represent their Broker who has not instilled in their Agent some Best Working Practices or if they did, regularly check they are maintaining them.
Philip: Another horror story from the trenches of our profession. It amazes me how much some in our world simply do not know. They know how much they will get paid, or want to be paid, and that's about the extent of their workign knowledge. How sad that a seller had to go through this.
I hate it when agents put us in a bad situation like the one you just wrote about.
Any solutions?
As agents, I find most of what we do is damage control, so not surprising in this situation at all. It's a shame it couldn't have gone better for the seller, but at least now he has you!
Ohhhh so it sounds like he knows some agents in my town.
A bad review posted on such sites as Active Rain or www.IncredibleAgents.com, will sink bad agents faster than the Titanic. More people should take steps to warn people about bad agents and praise good ones.
Hi J Phillip, What an amazing tale of shoddy work. All of us suffer at the hands of these idiots !
Sounds like a mess and your right it makes us all look bad.
I feel your pain. I think we all have had similar experiences and wonder why is the other broker even here?
What a shame. It only takes one to make us all look bad. I have a feeling though, that this seller will have restored faith in all of us due to your diligence and hard work.
Good luck. Show him how we SHOULD be.
If only more people filed complaints with the local BOR, maybe some of the bad agents would leave or be kicked out of the profession. Hawaii contracts have a timeline for satisfying loan contingencies. A prequal letter is usually submitted with the offer. If an appraisal comes in low the seller or seller's agent should get a copy of the valuation page if the buyer wants to renegotiate the sale price. If the buyer really couldn't afford a loan on this house, his/her agent should have advised them to select a more affordable property. One of the agents in my office says that he has clients with "champagne taste but a beer budget".
I'm with Lenn! Especially the part about needing a 75 to pass. As my Dad used to say...do you want to fly on a plane where they pilot only passed the safe landing test with a 75??? Scary!
Phil, I really believe that even now, there are some agents in NY that defer the whole deal in its entirety to the lender and lawyer, and don't look back until it falls apart. Based on the agent being upset about retaining the deposit, he can't possibly have been aware of what had transpired (WITH THE CLIENT THAT WAS PAYING HIM FOR FULL REPRESENTATION)...heaven forbid, or could he? Sad is right!
If I were a consumer, I would report things I deemed were violations to the state's real estate commission. People always need to be held accountable. When I hear these types of stories from sellers directly, it makes me cringe.
Philip -- When I hear stories like this, I cringe. It's embarrassing to hear that this sort of treatment exists and continues. Certainly does make our job harder. And is even more frustrating when you hear it's the same agents doing this over and over and over...
What's that saying about one bad piece of fruit ruining the the whole bunch? Cept there's a huge bunch, and lots of bad fruit. Slowly, the good fruits are getting sorted from the bad. I definitely think the next few years will see a rebirth of quality in this business.
You left the most important part out... did you get the listing?
Okay, but did you get this listing?
Wow! Amazing what some will or will not do!
Philip,
Sadly few days go by where I'm not embarrassed to hear what other agents do or don't do. Tomorrow morning I was due to meet with a seller in circumstances far too similar to what you describe. The pending contract on the home isn't fully nullified yet, so we postponed. Seller and the attorney are actually further impressed that I in no way would get involved while there is a contract of sale in play. I aced that R.E. test...
And may I further say the seller contacted because she "likes my style" as communicated in my blog.
You and I will show our new sellers what a great agent can do...
This is a great example of why we need to adopt agent ratings systems that measure the real performance of agents, not just sales production. Products like QSC allow consumers to give feedback about their agents. You can't game the system because it is only sent to people who have actually bought or sold a home with the agent. If an agent consistently performed like the one you describe here they wouldn't be in business for long because consumers would give them such bad ratings.
I think it's time we as an industry embrace agent ratings. The 'cream" will rise to the top and the moldy milk will be tossed out as it should be.
I actually do not believe that story. Remember, buyers are liars, but sellers are worse! There has to be a different side to this. No agent is that stupid.
And for those of you who work in franchise offices, keep in mind that what you do can ruin things for someone very faraway. I work for CENTURY 21, but had a dickens of a time getting some sellers/friends to get beyond the bad service of a CENTURY 21 agent in Minnesota. They liked me, but were so turned off by their past experience that they did not want to list with a C21 office again. Did not matter that we were in separate states and that each office, as they say, "is independently owned and operated". So a rotten apple in Oregon can lose business for someone in Texas or Georgia. Sad but true. Doubt that this will make a poor agent straighten up and fly right, but it is a sad fact of our profession.
PS Cannot say I agree with a ratings system for agents. We tried that in education and trying to come up with a way to fairly and accurately measure performance was impossible. I was the director of a school and saw poor teachers reward while the best ones were slighted. Trust me, we are not ready to go down the ratings road. In the end, nature will take its course. Bad agents will get what's coming to them in the end and good agents' reputations will spread.
You have to wonder what's going on when other agents are happy that you've returned their phone calls. I guess there's just more chaff to shake off the wheat yet.
What a sad commentary...really, but I wonder the affect this has on the sellers and buyers that read our work here? Not a judgment just wondering.
Thanks fr your replies- I remain in contact with the seller, and we'll speak again today regarding listing with me. Questions really do abound with this- what his attorney advised him, etc, but it goes without saying that his level of suspicion is quite high.
Philip - I'd like to say that I'm shocked, but I"m not. Follow up and Follow Through is one of the most important responsibilities of a real estate sales person.