patrick.net

It's a shame when licensees in any profession use the system to enrich themselves at the expense of their clients. It reflects badly on the group as a whole. I'm sure there are those who break the rules everywhere, but for the most part, agents here in DC Metro seem to play fairly. Undoubtedly, there are honest, hardworking Realtors in CA as well.

I don't believe it is in a client's best interests to have an agent represent both buyer and seller even when the licensee isn't a party to the transaction. When agents are buying and selling properties while representing clients as buyers and sellers in those transactions, there's certainly a conflict of interest. It doesn't sound as if that is what actually occurred in Buyerbeware's story, although the agent seemed to infer that she'd list a property in order to achieve a low price for the buyer, which would certainly seem a breach of duty to the seller, something that didn't seem to bother Buyerbeware when initiating a relationship with the agent. (A foreclosure can't be listed as a short sale as a foreclosure is already owned by the bank, so I'm assuming Buyerbeware meant "pre-foreclosure")

In Washington DC, there are some licensees who also rehab and flip properties as a sideline. It's a perk of the business to be able to quickly ID good properties, offer quickly and turn them at a profit, using expert knowledge of real estate to do so. That doesn't mean there's any dishonesty involved. As long as relationships between the licensee as a seller and as a representative of a buyer in the transaction are separate, this shouldn't be a problem, especially when the buyer is represented by another qualified agent.

In addition to rises in property values based on location, desirability, demand and supply, the last "comp" value changes values for the neighborhood and homes are typically priced above the comp price in order to leave room for negotiation. This, per se, is not dishonest or a game or scam. Were you the seller of these properties, you would likely agree! The actual sales price doesn't show on public records until the transaction has recorded, and lenders and appraisers have to deem the property worth the sales price. In cash transactions, a buyer can pay whatever they wish for a property. It becomes their liability. Also fair.

Any person can buy property at a trustee's sale and flip it, including Buyerbeware. If the licensee represents her parent in those transactions, there's no conflict in that. Were my mother purchasing and selling property, I'd hope she'd use me as her agent, too. Buyers need to be aware that listing agents don't work for them, they work for the seller and will do what is legal and fair to make a profit for that seller. It is telltale that Buyerbeware noted that he/she should have called the listing agent and asked for a showing of the home her agent wouldn't schedule for a tour. The listing agent represents the seller. Why call the lister when the lister represents the seller? What Buyerbeware should have done is phone his/her own agent's broker, state that the agent was refusing to show a property, and ask the broker to assign another agent to do it immediately. The broker "owns" the client, not the agent. Buyerbeware could have used that opportunity to change agents, or brokerages altogether.

The agent's offering to "buy" a short sale listing should have been enough to warn Buyerbeware off that agent in the first place (sounds like there was greed involved on both sides here).

Inter-related activities can become a type of scam if licensees cross the line, and as with any transaction, it actually is up to the buyer to identify and back off from any transaction that seems unscrupulous. Buyers should act decisively when encountering these types of infractions and practices, by immediately "firing" the agent, reporting the behavior to the agent's broker, refusing to participate in transactions in which the licensee is involved, and by reporting the incidents immediately to the real estate board along with substantiation. If you feel you've been taken advantage of, file a formal complaint.

All that said, if you are a buyer in a competitive market, you need to step up. Real estate agents will tire of giving you the same unheeded advice and touring you endlessly at their expense. It is a drag on their time, which involves research and preparation as well as touring time, and prevents them for allocating that time to another client who will step up. Real estate agents are not utilities or charities. They are not your friend. It is a business. They need to manage their time and budget just like any other business. Find a BUYER AGENT. Buyer agents typically don't list property (I list only for my buyer clients, and then I will not represent a buyer for purchase of that property), have complete loyalty to their buyers, and are aware that buyers cost more time, effort and expense than sellers (listings). They, too, will put a limit on it if you're not realistic.

BTW, Cash offers are stronger than those with financing because the seller doesn't have to worry about the buyer qualifying for the loan, or the lender's appraisal coming in low. That doesn't mean that a much higher purchase price offer won't be accepted instead of a cash offer. It depends on how confident the seller is in the buyer's creditworthiness and in the ability of the property to appraise at that price.

It IS worthwhile to work with a good real estate agent. Every step can not be found on the Internet, and most buyers and sellers are not equipped to handle this important transaction themselves. A lot of what we do isn't witnessed by buyers and sellers; endless hours of research, paperwork, previewing, communication between buyer, agents, title, lender, etc. and, of course, touring. We are not personal assistants, we do represent multiple clients, and we are human and do make mistakes. Don't you? Often our hard work averages us minimum wage after expenses. I work 7 days a week, 12-16 hours a day. I care about my clients and do everything possible to acheive their goals.

It's tough out there right now, for buyers and sellers. It's a confusing market with ups and downs and each micro-location is different. Find a dedicated agent who will work hard for you and appreciate them. Things will work out.

or not find agent at all. I disagree with susanisaacsrealtor and think that an educated buyers no need real estate agent to represent them (or misrepresent them). You can represent yourself, don't be fooled by the realtor's that this is extremely complicated process and you need someone to guide you. Furthermore if you don't have an agent as a buyer you get get a further price reduction equal to half of the entire commission the seller has to pay to both agents. This is on average is an additional 2.5 % of the asking price.

repo4sale says

ALL DEALS WITH REALTORS ARE “SUSPECT” AKA NOT FAIR.
AVOID THE REALTORS AND YOU ALWAYS GET A BETTER DEAL.
I KNOW, BEEN IN REAL ESTATE SINCE 1976, OVER 650 ESCROWS.
114 COURT CASES OVER LIFETIME AS LANDLORD/PARALEGAL/PRO-PER!
AVERAGE GROSS PROFIT PER DEAL 1167%, ONLY BECAUSE I DON’T USE A REALTOR.
PS: I’M THE LARGEST LAND BUYER IN CALIFORNIA THAT IS A “PERSON” NOT CORPORATION.

OVER 3000 ACRES IN LAST 18 MONTHS…
27% IRR PER MONTH FROM 1999 TO 2008!

Are you sure you're not APOCOLYPS**** in disguise?

even if the realtors want, how can they be 100% honest? They can't because it would be against their interest? They won't sell anything and won't make any money without adding some "spice up" whether they think it is needed. Yes, the good ones struggle, but this a profession that honesty is not a value. Don't use realtors, do it yourself!

susanisaacsrealtor, I agree we all humans and make mistakes. However when buying house a month ago my agent made "mistake" by "forgetting" to send me the updated property taxes which apparently went up with $1000 per year compared to what listing agent had on the sheet. This is over $30,000 over the life of 30 years loan without adding any interest? How is that sounds to you? Would you still call it honest mistake if it will have to come out of your pocket? It is a way more than a negligence, it is careless and mean? Does she cared about her clients? I don't think so!

I know it's hard to accept something like that. I request updated property taxes and back tax info from the title company to be sent directly to the buyer, so hopefully it never will happen! I think things in CA are done a little differently. I can't speak to the actions of other agents, but I do know a lot of really good and caring agents here. There are some disappointing ones, too.

I am 100% honest (sometimes too honest!) and I make a decent living. My clients are loyal and appreciative and they refer friends and co-workers to me. I take that responsibility seriously.

I do think the CA and FLA markets are quite a bit different than ours in DC (DC, by the way, has some of the most pro-buyer laws in the U.S.) and practitioners vary accordingly.

Some of you on this site are really smart people who are perfectly able to handle your own real estate transactions, and you should. But others are simply unwilling or unable to acquire the knowledge and experience necessary for their one or two lifetime transactions. They have full time jobs and familial responsibilities, and are overwhelmed even by the touring process. For the majority a GOOD real estate agent is a bonus, not a liability. I hope those of you who need one can find one!

Thanks for all the lively debate. I enjoy reading this blog.

When I look at a foreclosure I only work with the listing agent.

#1) The listing agent of the foreclosure has the most information about the property.
#2) The listing agent is doubly motivated to sell the property to their client because they get both sides of the deal (i.e. double commission)
#3) If I really wanted a property I would consider offering the listing agent a commission bonus (independent of what the Seller is paying) of 2% at the close of escrow. The at close of escrow is the key because during escrow you could find out information from inspectors that makes the property unacceptable.

Great advice rmacdon1

repo4sale says

I have 4 semesters of Calculus! 650 escrows! 114 court cases, daily work on 4 computer screens!
Read about 25,000 to 35,000 pages a year on Economics, real estate, law, finance, banking & litigation! I listen/watch CNBC daily for about 2 to 8 hours while I work on my 4 screens & 4 multifunction HP Laserjets! I close about 30 escrows a year and drag race & fish weekly!

Holy Crap. You have 4 multifunction HP Laserjets??? And you drag race too?

susanisaacsrealtor says

Undoubtedly, there are honest, hardworking Realtors in CA as well.

Then use your connection and show me one, at least one!

repo4sale says

joshuatrio says

repo4sale says

ALL DEALS WITH REALTORS ARE “SUSPECT” AKA NOT FAIR.
AVOID THE REALTORS AND YOU ALWAYS GET A BETTER DEAL.
I KNOW, BEEN IN REAL ESTATE SINCE 1976, OVER 650 ESCROWS.
114 COURT CASES OVER LIFETIME AS LANDLORD/PARALEGAL/PRO-PER!
AVERAGE GROSS PROFIT PER DEAL 1167%, ONLY BECAUSE I DON’T USE A REALTOR.
PS: I’M THE LARGEST LAND BUYER IN CALIFORNIA THAT IS A “PERSON” NOT CORPORATION.

OVER 3000 ACRES IN LAST 18 MONTHS…
27% IRR PER MONTH FROM 1999 TO 2008!

Are you sure you’re not APOCOLYPS**** in disguise?

I have 4 semesters of Calculus! 650 escrows! 114 court cases, daily work on 4 computer screens!

Read about 25,000 to 35,000 pages a year on Economics, real estate, law, finance, banking & litigation! I listen/watch CNBC daily for about 2 to 8 hours while I work on my 4 screens & 4 multifunction HP Laserjets! I close about 30 escrows a year and drag race & fish weekly! My goal is to die a Billionaire! Been to 68 countries researching investments, laws, politics, filled 5 passports, 4 world trips & my own personal Dept. of Homeland Security Travel ID#! State of California gave me a SELF INSURED DRIVERS ID#1949! Please post what you do daily that is not “median or average”???

You're full of yourself too !

tatupu70 says

Holy Crap. You have 4 multifunction HP Laserjets??? And you drag race too?

Nigerian scammer?

It is not even funny anymore to me when a realtor says "I am honest" but others in his profession aren't. LOL.

Not what I said, bubblesitter, It seems to me, also, that if you go into any relationship--business or otherwise--with an intense level of distrust and negativity, it would color that relationship to a great degree, and not in a good way. Perhaps you are one of those really smart people who should handle their own transactions.

susanisaacsrealtor says

Not what I said, bubblesitter, It seems to me, also, that if you go into any relationship–business or otherwise–with an intense level of distrust and negativity, it would color that relationship to a great degree, and not in a good way. Perhaps you are one of those really smart people who should handle their own transactions.

So who is to blame for the negativity? I guess banks,MG brokers and Fed right?

Four computer screens? Are you challenged by the taskbar or something?

Are we talking about blame for the market in general, Bubblesitter? I'm not an expert on that. Anyone who conributed to fraud and less than scrupulous deals, I suppose. Who's to blame for your individual troubles? Only you can answer that.

I disagree, Mr. Fantastic, and unless you personally know every real estate agent in the business, that's not a statement that should be made. I've had good and bad experiences with people in many professions as a consumer, but don't damn the entire profession for a negative one. Instead, I try to learn what I can from the experience and go into the next one better prepared. I also take a level of personal responsibility. As consumers, we need to due our own due diligence, whether it is choosing a representative, or following advice. There's a limit to real estate agents' responsibilities and duties and if there are any questions or concerns beyond those lines, buyers and sellers need to consult an attorney or CPA for added information.

Bashing people indiscriminately isn't an answer to anything. What do you do for a living? I'm sure there are people who denounce almost every profession.

I suspect some of the critics of BuyerBeware on this post are real estate agents...
hmmmm...

Don't touch that. WHAT DO YOU DO? You touch it.
Don't look, it'll scare you. WHAT DO YOU DO? You look.
The picture says scary don't look, but the wording says: It's beautiful, spacious, has great flow and a PEAK A BOO VIEW, perfect for the family (not theirs). WHAT DO YOU DO? You go with them hand in hand.

Why do car dealer salesman make you follow them...? It's control and it's all based on the theory of opposites. When you ride with your realtor in their car, you've already lost half the battle.

When you do not exercise your due diligence by doing your own homework, then you can only expect them to sell you what they are able to move. They lead and you follow.

Car dealerships operate the same way. They have a manufacture price and the MSRP price. We see that manufacture price and we're led to believe that the car really cost exactly that and that the dealer isn't making any money on it outside of that. GIVE ME A BREAK. This is the conjured illusion of a master.

This illusion only exists so long as all dealerships play the same game. The moment one goes rogue it all goes South. There are overhead expenses that in some cases, cost more monthly than the houses that we're looking to buy. Then you couple that with payroll, insurances and the immense taxes. It's impossible for a dealer to make all their profits on service alone. The only ones in the know, are those who are on the inner most circles. Simply said, they can't trust some of their most trusted , because their human.

This is also true for the Real Estate business, even though I went off on a tangent. The real estate business operates in much the same way, even on the tier of those in charge (the banks). Think of it all in terms of concentric circles. The further out they are, the less expensive they are. The realtors/brokers/bankers try to keep the concentric circles as dense as possible. This allows them to keep prices higher on the outer rings.

The outer most rings are the outer most reaches of territory with controlled pricing. The closer to mecca you get the more expensive. Profits and the likes are based out of the center of the rings (bullseye/mecca) When they lose control of each outer ring the prices and profits drop. These guys (realtors/bankers/brokers) are all swimming up stream and the power of the flow of water is gaining immense strength. That's when they revert to drastic measures to stay in the swim for survival.

They want these outer most rings to remain high for as long as they can. It allows them to bank as much as they can and all at the detriment of anyone who they can get their hands on.

THERE'S TRUTH TO THE UNITED WE STAND AND DIVIDED WE FALL. THAT'S HOW THEY OPERATE. If we're to stand a chance on normalizing the market at all, then we too need to stand together and lead them as opposed to being lead. After all, we are their employers. When my buck stops paying them their paycheck stops. Remember, they're to blame for all of this. They represent the root and not the branches. I for one am going to hold off on buying a new home until the market really normalizes.

Ok guys, I give up trying to convince you that all real estate agents aren't corrupt or evil! They're aren't, but I can see your minds are made up. I am not, btw, "employed" by a broker. We are independent contractors who rely on our repuations for referrals. That is how we make a living. Here, anyway, reputation is very important. My license is held with a boutique DC brokerage that would sever a relationship with any agent who DID do the things you suggest in this blog. Marketing is one thing, breaking the rules, laws or acting in an unprofessional manner is another. I wish you all luck and hope things improve for you soon. : )

Please understand that realtors do not have your best interests at heart, they have their own. Also, you will often not be privy to a house until the realtors, bankers, builders, appraisers and their friends and relatives decide they don't want it. Good luck.

Nomograph says

I’m starting to think the OP is BS.
Look at that area on Redfin:
http://www.redfin.com/search#!lat=34.689968643041496&long=-118.15727233886719&market=socal&v=6&zoomLevel=13
It’s foreclosure city, and most houses are listed for less than 150K and have been sitting on the market for months and months. It’s a bloodbath out there and this guy can’t buy a house with straight-up cash?

Well, it could be that those are just the listing prices, and the realtors are working as a cabal to make sure all closings are above the sales prices.

A buyer's agent has a direct conflict too. The buyer wants to spend as little as possible for the house. The more the buyer spends, the higher the commission for the agent. Totally conflicting.

Ok, so the squabbling goes on and on. Is there a way to bypass the sellers agent and deal directly with the bank? Surely, someone must know the alternate loopholes to jump through. The agents and others in charge of these places are obviously not doing their job fairly, much less ethically.

Why do we need to go through the agents to get into some of the inventory? Maybe we need a law put in place that makes banks deal directly with knowledgeable and qualified citizens, despite the existence of realtors and brokers.

WE CAN'T ALL BE WRONG!

Excellent explanation of the conflict inherent in being a buyer's agent!

You people complaining about agents are either lazy, cheap, or both. Get your own license or STFU.

For gods sake it takes 2 weeks of classes to get a license - some people have been on this site complaining about agents for FIVE YEARS! hahaha. Take the time you would normally spend whining and complaining and get educated. Start here: http://dre.ca.gov/exm_home.html

At peak fraud (2006) there were 500,000 licensed agents in CA. Its pretty easy.

This sounds like the behavior of *most* of the Realtors and agents I've met. Buy direct if you can, bank or other owner - if you buy from a Realtor you are supporting supporting the liars and thieves who destroyed our economy for a commission.

"Without even knowing her, I can almost guarantee that Susan has watched a client of hers enter into an unfavorable contract without uttering a peep so she could get paid. Therefore when her professional responsibility demanded it, when state law required it, she did not use her professional capacity to represent her client. That’s the bottom line."

Another personal dig? Really? And here I thought we were going to be friends. : )
I'm happy to say that I have more than once derailed a transaction that could have closed when I learned something about the home that wasn't in the clients' best interests and I always "peep", though I'm not always listened to.

I see that what this is really about is not wanting to pay commission for a service you (personally) don't value. If I understand correctly, this is primarily about reaching banks directly on foreclosures. You'd rather tour the homes yourself and make your own deals. The system isn't set up that way so yes, that would be frustrating for you. You'd have, at least, to go through the listing agent. If I were in the bank's position, however, I wouldn't want to deal with a lot of calls, emails, incomplete or inaccurate submissions. So there would have to be a website or something that would channel those offers in and make sure they complied with criteria. Banks have those websites (I've submitted to them through the lister) but obviously no public access.

SO... one of you enterprising people should create a .com for that! (and an app) I'm sure it would be wildly popular! And if it was well conceived, banks would probably love saving the commssions too. Laws vary, but if an entitiy has a broker on staff to list properties on their behalf, I believe it is ok. The bank's on staff broker or your .com's broker would have to list the properties.

Part of the problem I see with not having real estate agents is access to properties for viewing. For security reasons alone, sellers can't just open the house to anyone at any time. How do you see that working?

susanisaacsrealtor says

I see that what this is really about is not wanting to pay commission for a service you (personally) don’t value.

The Merriam Webster online dictionary has a lot of definitions for service. Here's a couple of them:
9: the act of bringing a legal writ, process, or summons to notice as prescribed by law
10: the act of a male animal copulating with a female animal

Am I correct that you feel real estate agents are responsible for buyers' finances and personal decisions? That's not my function. I supply clients with the best resources and information I can to facilitate their home purchase, but I can't make their decisions for them, nor do I want to. I'm not allowed to give legal or financial advice, so that's also not my function. I don't get involved in their financing decisions, nor am I privy to their financial details. I request that they're prequalified by a reputable lender before touring.

I have enough respect for my clients to honor their decisions and choices. I don't treat them like children, nor do they want me to. On the rare occasion that I truly feel a client is wasting my time, I have a talk with them to see what their real motivation is. Sometimes that results in my withdrawing as their agent, or in our mutual agreement to postpone further touring until their issues are resolved. In those cases, we continue to monitor the market and listings. Most of my clients are very conservative in their choices and I applaud that.

This is not an easy job no matter what you think, and it requires far more hours and expense than most people realize. But I like helping my clients and I'd rather be doing this than something else. If that's "spouting", so be it!

susanisaacsrealtor says

nor am I privy to their financial details.

Man alive ! (Or should I say, Woman alive !).

A realtor who will work with me without trying to size up my financial in his/her mind and direct me to showings and "coach" me on the offers appropriately. I couldn't find a realtor like that in San Jose when I was a buyer a couple of decades ago. That was why I got so turned off by them that I did my own shopping, then hired a lawyer who specialized in such matters for the transaction for a reasonable fee.

I see your point about the system and I also see the potential for the conflicts you detail and for dishonest dealing. But again, not all people are the same. I'm responsible for my own actions. It's not a problem for me to put the clients' interests first. Sorry you can't imagine that. I actually can't imagine agents doing some of the things you all have described.

Lol, well you were smart to think of that solution then, and I hope it worked out well?

Hasn't anyone seen the movie "Lord of the Rings"? Man can't be put in the position of wearing the ring, because his inner self will always be revealed when push comes to shove. You say you can't imagine that and that you do put your clients interests first, but will you pull your client out of a bad deal, when your mortgage is also due, and the money must come it, or will you just let one, or two slip by? Or, will you take the bullet for sake of what's right is right and what's wrong is wrong? If you are that exceptional individual, then maybe we all need to stop waiting for Superman too, because you're already here.

Hi,

I've been reading this blog for a few years and have been looking since about 2005. Duh, to me this mess was obvious and bound to happen when hi tech people started getting laid off in around 2001 after the dot com bust lame bs. I was witnessing the carnage first hand as private equity firms bought up companies and jobs were flipped to India by the thousands at a time. I'd inherit years of other guys work and watch them leave literally crying, with McMansions and kids in college, bitchy wives too... bye. I learned not do do it, salaries were too low and at huge risk for hi tech folk. If so many of us were at risk even that was enough to start to break things down.

Anyway, it's awesome that real estate agents come here, they must HATE this site! lol

I never thought to look at the comments but I'm finding it hilarious how many reeealtors seem to come here. They must hate this site that comes up first for "housing market" in Google.

Susan, thanks for writing lengthy posting. I enjoyed reading it. Your posting cleared up some of my suspicions regarding DC housing market and what realtors think about certain things. That does not necessarily mean I agree on every point you made or I disagree on everything though, I appreciate your posting and your time here in this forum.

I think you're specialized in upper mid to high end residential property in better part of DC and northern VA, and you don't seem to mind what cloth they wear or what car they drive. If so, that's good. My wife and I went to openhouses numerous times, and what we were looking for was the realtor, not the house itself. We're blue jeans and slipper kind of people, especially in Sunday afternoon. We don't really know why those realtors we've seen so far like to talk only with those people that wore tie and shinny shoes in Sunday afternoon though, we didn't really care either.

And you know what? All the business card we recieved for years, except only 3, went directly to trash can. I think you're relatively better than most of them, and I do hope someone is keeping your card in his/her wallet.

Lol!! You write well, Solver. I will take the bullet, and have quite a few times, maybe because I'm older and I was raised with the standards of the Cleavers, Reeds and the Greggs, I don't know. If I had to depend on a pending closing for my mortgage payment, that would be my problem, not my clients'... and that wouldn't make me superman, just logical (and a bad budgeter, I suppose!)

Things seem to be a lot worse where you are and perhaps thats why I find these scenarios foreign. We're lucky to be in a region that has a consistently good market.

I don't hate this site, icape, I'm learning a lot! I subscribe to Patrick's newsletter and post a lot of his links on my site for my buyers. Thanks for letting me participate.

Well thanks, seaside! I actually specialize in the under 750K pricepoint. I spent more time this week with two 170K - 190K buyers than those in the 4's to 7's because those homes are much harder to find here. It's hard to give everyone the same amount of time every week if I just tour on weekends, so I tour 7 days a week. I'm glad my clients don't mind MY car... it doesn't get washed as often as I'd like due to the crazy schedule. My first tour tomorrow is at 8:30 a.m. an 1.5 hours from my home in seriously bad DC morning rush traffic, so I'm going to BED now! lol

Are you a grown up or what? Its 2011 and you expect REALTARDS/REALWHORES to work for you? Never sign an exclusive buyers agreement. Work them all and work them hard...

http://www.rollingstone.com/politics/news/why-isnt-wall-street-in-jail-20110216?source=patrick.net&print=true#main

Has anyone read from one of the new links? Rolling Stone did a piece on Wall Street and Patrick just posted it.

Not to throw this forum off on a tangent, but this is a really good article. It's just to bad that that America is no longer a fair nation. Truth, justice, freedoms... are all gone. We're doomed and we allowed it all to happen.