Shady agent tricks competition…win a $10 Starbucks card!

December 4, 2006

At a social event over the weekend, I got into a conversation about real estate with another guest (not difficult, since it’s on everybody’s minds!), and the discussion unfortunately turned to dirty tricks played by some agents. Even more unfortunately, both the other guest and myself had seen quite a few such tricks, me from within the industry, and he as an interested observer.

creepy_realtor.GIFSo…I‘ve decided to sponsor a “Shady Agent Tricks” competition! The rules are pretty simple: In the comments to this post, submit your entry for something shady that you’ve seen an agent do. It can be something illegal, unethical, or something that’s technically neither but still smells funny. You may not name any agent or mention the agency for which he/she works, or describe them in a way that could identify the person (e.g. here’s something that is regularly done by the agent who dominates the XYZ neighborhood). The competition ends this Saturday at midnight PST, and the judging panel (that would be me) will select the winner, who will be awarded a $10 Starbucks card. The four runners-up will be honored with the glory of being mentioned on my blog plus a linkback to their own (if they have one.) The competition is open to both Realtors and civilians.

Why, you might ask, would a professional Realtor want to expose some of these tricks on his own blog? Isn’t that just bad publicity? I think of it differently. More publicity about shady agent practices is good for consumers, and by extension is therefore good for all consumer-friendly practicing agents. I certainly expect some objections to airing our industry’s dirty laundry.

Here are my entries for the competition…

1) Difficult to show double-dipping trick — Listing agent makes the property nearly impossible to preview or show: open house lasts only an hour; property never gets shown on broker tour; agent convinces seller not to use a lockbox; property only available to show with 24 hours’ notice. Result: Property languishes on the market for several months and then — whowuddathunkit!! — the listing agent comes in with his own buyer. He convinces the seller to take the deal, and pockets the full commission. The listing agent definitely wins, and the seller is left scratching his head about why so few showings happened on the property.

2) Late-to-the-MLS double-dipping trick — Listing agent takes the listing on Monday and markets the hell out of it in the weekend papers plus Craigslist. Mysteriously, the listing doesn’t make it to the MLS by the deadline that week for it to make the local broker tour (where dozens of local brokers will see it and make recommendations to their clients about it), and in fact the listing is still not on the MLS by the following Monday. Due to the intensive marketing, and a dozen street signs, the first open house weekend is flooded (mostly by unattached buyers, since the ones with agents who for the most part rely on the MLS to tell them about new properties weren’t aware of this one) and — voila!! –
the listing agent presents an offer from one of these unattached buyers to the seller on Monday, who accepts it. Again, the listing agent pockets both sides of the commission.

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Image courtesy of creepylawyer.com

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Written by Kevin · Filed Under Bad Realtors, Crooked realtors, Deceptive realtors, Dirty agent tricks, Real estate, Realtors who give the business a bad name, Sleazy realtors 

Comments

12 Responses to “Shady agent tricks competition…win a $10 Starbucks card!”

  1. wendy kandasamy on December 4th, 2006 1:16 pm

    On the listing side, the agent agrees to a lower commission rate. When the first offer comes in, the agent withholds the offer until the sellers agree to increase the commission rate.

  2. Tori Stamps on December 4th, 2006 9:03 pm

    Found you at Active Rain! Great idea! Here’s my doozey!
    ~~~
    I was working as a Buyer’s Agent for a co-workers parents. Their price limit was up to $1 million (nice first clients, eh?). We had scheduled 3 homes to visit and they ABSOLUTELY fell in love with the 2nd one. They were ready to write an offer then and there, no questions, no concerns. Did I mention this was a cash sale?

    We still had an appointment, so we decided to go to the 3rd just to confirm that the second one was “it.” I’m so excited, I can’t stand it. The listing agent meets us at the 3rd listing and starts asking my buyers questions like which houses they’ve seen, etc. When they mention how much they like the 2nd house, the listing agent (for the 3rd house) says what a lovely home it is, it’s just too bad about “that industrial park they’re putting in down the road.” My clients FLIP OUT! Come to find out, it wasn’t an industrial park, it was a business park with over 200 acres of green space surrounding it. Oh - and it wasn’t just “down the road” - It was 5 miles away on a completely separate road! It took me 2 days to unearth the truth and by this time the clients had cooled off so much that they never did end up buying. Needless to say, I had a nice conversation with the listing agent of the home that lost the offer and told her everything. Sadly, these 2 women were friends! *eesh, with friends like that who needs enemies!*

  3. Christine Kani on December 4th, 2006 10:10 pm

    You can afford it, just increase your deductions trick–
    As a buyer, you have to be very careful to distinguish the difference between approvability and affordability. Agents will encourage you to get approved at the maximum, and in the heat of bidding, you get pushed higher and higher, yet nobody is worried since you can be “approved”. Even though the loan advisor shows the cash flow is barely affordable, the agent tells the buyer that “you can afford it, just increase your payroll deductions.” At the end of the day, the buyer has to either refi into a negative amortizing loan to keep the payments low enough or sell!

  4. Marlow Harris on December 4th, 2006 11:14 pm

    I inherited some buyers who were working with another agent, but they had wanted to sever their relationship with her, as they had decided they just didn’t click. When they called and told her they didn’t want to work with her anymore, the other agent billed them for the complimentary fruit basket she had sent them.

  5. Franz on December 5th, 2006 10:19 am

    The first one I thought of is more stupid than shady, but I’ll share anyway:

    An associate of mine took a call from a nice lady with a home to sell. While talking to her on the phone, he looked in the MLS and saw that the home had just been listed for two weeks then withdrawn the day before. In our market, brokers rarely release sellers from listing agreements early, let alone after two weeks, so he asked what the story was.

    The problem occured at the first open house. The seller left, the agent came with signs, brochures… and her dog. To start, she let the seller’s dog out of its kennel to play with her dog. Then she let both dogs outside to go play in the backyard. After the dogs were both covered in mud, she brought them back in the house.

    The seller came home just in time to see the agent’s dog take a shit on her living room carpet. Needless to say, the agent’s company immediately released her from the contract.

  6. Chris Iverson on December 5th, 2006 11:19 am

    This is more a shady lender story, but the two go hand in hand. Before I entered real estate (and knew better), the mortgage broker for a home I was buying suggested that I pay “points” up front on the loan, which shows on the purchase contract. He then would refund the points as non-recurring closing costs on an Addendum, which the bank wouldn’t see. He explained the benefits to me were: 1) I could write off the additional points on my income taxes 2) It made for a more attractive offer.

    the agent I was using knew he did this, and thought it a great service to her clients. It felt fishy and so I did some research online. In fact, that constitutes lender fraud which has a couple benefits that he didn’t explain. 1) It is a felony, punishable by a fine and imprisonment (saving me mortgage payments I guess). 2) The mortgage broker, agent and client are all culpable. 3) Lender fraud is such a large issue in California that the Justice Department has recently opened an office in Fremont specifically to work these cases.

    I fired the broker and found someone more reputable. In hindsight, I should have fired the agent as well.

    I don’t have time or typing skills to share all the stupid agent stories I have. Let’s just say there is a reason that the California Association of Realtors is expecting a 20% drop in membership in the next year.

  7. Jeremy Lindston on December 10th, 2006 11:21 pm

    This concerns a dangerous possibility that exists in our work to protect our clients and responsibly complete real estate sales transactions.

    An agent represented his client to me and my seller as competent to make her offer on our listing. Her lender, a loan broker in Southern California, had approved 100% financing on this purchase and she made an offer much higher than the other offers we had received on the property. Because of the firm assurances given us by not only the agent but the lender himself to whom I spoke on the telephone, we accepted the offer. The buyer owns another home locally which she planned to keep and had made that purchase with the help of this same loan broker, who was also the friend of her adult son. So there was positive history with this loan agent and we, and she, trusted him. Thus we entered the 30 day escrow period with a non-contingent agreement.

    Shortly before the close of escrow we learned there were additional documents required by the lender’s underwriter and escrow would be delayed one day. Other issues then appeared and now the escrow was to close 3 days later. We were told the loan documents were being emailed and they never arrived. Daily we tried to communicate with the lender to no avail. When he finally re-emerged he expressed dismay at the hold up and offered new assurances.

    Two weeks passed with daily promises that were all broken; by that time we had involved the brokers of both companies involved, as well as their legal departments. We attempted to convince the buyer to apply for another loan through a local lender who was indeed prepared to give approval. To no avail. What we finally learned was that her loan broker in Southern California had promised rates and loan fees which were not ones that could be matched through any other lender. Thus, though she could get the loan elsewhere, she could not afford the normal costs of 100% financing.

    And, it turns out, her friendly loan broker could not provide those rates and points either. He had lied to her, misrepresented the entire offer of financing and was too cowardly to confess this to her, leading her to believe he could still provide the service she needed.

    This proved to be very expensive to my client, the seller, who then had to face putting the home back on the market and accepting a lower price than what we had originally anticipated. Thus he was damaged far more than the 3% of the purchase price which was being held in escrow and which is now his only recourse.

    The lesson here for me was multiple: never accept a lender located out of the area and not a nationally recognized organization. Always look very closely at 100% financing. And when the offer comes accompanied by a pre-approval letter note who has written this letter and how competent the maker of that letter is to follow through with his promise.

    And be very suspicious of people who promise everything and then refuse to answer their telephones.

  8. Robin Fonseca on February 13th, 2007 10:07 am

    I am currently purchasing my first home and was greatly excited….notice I said was! My realitor is great she is a friend as is the woman processing my mortgage. I am 26 so this is huge for me. My income is not that high I am in the mid $60,000 range. So, I wanted something that would not make me house poor. I found a great house a little further from my job than I had hoped but otherwise perfect. The selling realitor however has made this a nightmare so far. At first he tried to tell me I had to use his mortgage company if I wanted to buy the house…then it was I had to use his appraiser. Well I said no to both and of course he had to deal with it. He has continued to become ruder as the process has gone on. I am paying all of my closing costs and the house price was set w/o any reduction. My realitor and mortgate person are both waiving their fees for me to make it easier to buy…His response was if he did the mortgage and appraisal it would be a guarantee that the hom eloan would be a breeze. Still I declined. He also guaranteed us the home would appraise for at least $10,000 over the selling price. Well I got my appraisal today and it is actually $5,000 less than the purchase price! This man is horrible. We are trying to rework the numbers because it is a great house but he will not budge. So goes my dream of homeownership it may seem. He is the most unethical, unproffessional, and rude man I have ever dealt with. I actually broke down and cried because of this. My loan has already gone to underwritting so I am unsure what will happen next. This response is in the hopes that no one will ever use this type of “proffessional” and will not have the same unfortunate experience as I have had. Good Luck to all that buy or are looking to do so. Ask your friends and family about the realitors they have used, call the other agents broker, call the BBB if need be just research first is my lesson….

  9. Ken on March 23rd, 2007 6:01 am

    Maybe this isn’t the worst, but it ticked me off. I’ve been looking for a few months for a buyer in a particular town. I check the MLS every day. Yesterday I found one on the same street as one the lost in a bidding war a month ago. Day 1 on the market, no photo yet. I call the Weichert agent, I tell her I’m driving out to preview and take some photo’s to send my client. That this is right where they want to be. She says she is going to take photo’s in the coming days. I change the batteries in my camera, go out, take the outside photo’s. I call the agent from the front of the house and ask if it would be o.k. for me to preview. She calls back and says the homeowner is still cleaning, and to just bring my buyer back that night. So I send my client the outside photo. He writes back that he thinks he saw this at an open house a few months ago, what was the deal. I pull it up and it was withdrawn 2 months ago. Now the price was lowered, but hey, I’m another agent. She could have told me that I could find all the pictures and the virtual tours on the old listing rather than make me go all the way out there, take photo’s, then look like a fool to my client who had to tell me it was on before. ( in order to get the listing to go back to zero days on the market apparently she changed the address from ” North …..street, to N. ….street. You could have a little courtesy between agents, we’re all busting our butts out there in a tough market.

  10. Ken on March 23rd, 2007 6:19 am

    Hey Robin,

    That’s a shame what you went through. I don’t know if you wound up working it out or not, but in that case the “solution” is usually for the seller to lower the price to meet the appraisal, for the seller to pay for a new appraisal that hopefully will be higher, and/or for all parties to kick in an amount to make up the $5,000 in lower commissions etc. Since your agent already removed her commission because she is a friend, the seller was ahead of the game on that one. What you don’t say is how much the house was and what the offer was. If it was full price or close to it, the seller would have to consider not paying 1/2 the commission a huge incentive to just end this thing. Even if the house was say $200K, that’s probably $5K he’s saving right there. So I don’t see how this couldn’t be worked out.
    You may have a reason to be upset with the seller’s agent, but then again maybe not. Sometimes agents do have appraisers they know give “good” appraisals. It might be that they get a lot of business from one source, or they are more familiar with the area etc. The move here could have been to bring in the agent’s appraiser, and if he appraised it higher than you pay him, if not the agent or seller does. You really can’t blame the agent for the low appraisal if you didn’t take his advice on the appraiser. Appraising is not an exact science, just like pricing a house for sale. One agent may say $200K, the next may feel it’s worth $210K. Now I’m not saying you don’t have a right to be upset, as I don’t have near enough info. But you did go your own way on the appraiser, and since it did appraise close to the number it had to, I don’t think it’s really justified to blame that on the agent. No one can be that accurate on the price of a house. His mistake was “guaranteeing the appraisal”, if that guarantee was for any appraiser and not just his. Good luck to you.

  11. gotmylisting on September 18th, 2007 7:56 am

    Heres one that just got me, I got an offer from a listing agent that she would sell our house, even in the current market where everything is for rent. Her garuntee was that someone would make us an offer within 67 days or she pays us 1% of our asking price in cash, well week one already an offer and we got right up to everything and the “buyer” coulnt get her approval letter to anyone, she never got approved in the first place. Turns out after some curiosity and detective work on my end, she used this fake buyer to make an offer that she couldnt back up, and has done this several times in the past.

  12. Laura on September 30th, 2007 12:50 pm

    I was working as an agent/broker’s assistant for a little while. I was working on my FIRST sale with a friend of mine who wanted to buy a cheap income property. Of course my broker was aware of my intention to find my friend a house, and being that he was always looking for a good deal himself, he started to call my friend with negative comments on the property to try to convince him not to buy. My friend ended up pulling out of the deal (he had already submitted the offer) because of what he called my “shady boss”. I was furious and ended up quitting shortly after that. In the end, my own broker did end up buying that house for a much lower price to suit him perfectly. After that, I left the business and I still find it hard to trust anyone in a business built on greed, not service.

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