Difficulty with Realtors® – Is This the Lowest Low for One of Them?
Realtors® can be blessings or curses to investors. They are seriously overworked, under paid and over-regulated and, frankly, there are just too many of them. Some make great money but the National Association of Realtors® says that 87% fail their first year. The median income is just over $45,000 annually. Nearly every Realtor® I have spoken to became an agent so they could get closer to the market to make money as investors.
Most investors have learned that some listing agents are so desperate for sales that they are not truthful all the time. We listen tentatively to what they tell us. However, we have learned not to believe them all the time. New investors get taken by this Realtor®Speak because they believe that an agent has experience and commands respect as an authority figure and professional. This may not always be the case.
As investors we have agents play all sorts of tricks on us, mess with our minds and outright lie to us. Here is an example of an interaction that happened the day I wrote this article: I have changed or omitted the actual prices in this exchange to protect the identity of the listing agent, his closing company, the Student and the seller.
The Student made an offer $60,000 below the asking price. The agent replied that she had numerous higher offers. The investor would have to come up $50,000 to have her offer even considered. We instructed the Student not to go up in her offer. The next day the agent called back. The agent said that if the investor complied with a couple of stipulations she would submit her “low” offer to the seller.
We told the Student we were suspicious with “What happened to all those higher offers?”. We joked that maybe, just maybe, there weren’t any other offers above the Student’s. The agent sent back the Student’s contract. The agent casually mentioned in her email that the seller had requested some changes. We expect this but here is where things got very dicey.
The “seller” supposedly requested using another escrow and closing agent. The inspection period was reduced to a very few “business “ days. Finally open assessments would be prorated at closing instead of paid in full at the closing by the seller. The only real deal killer was the shortened inspection period.
But then the Student, who is also a broker, asked if we had ever seen a seller use a pdf editor to change parts of the contract. I asked what she meant and she went on to explain that numerous contract clauses were carefully changed or erased. The new contract was nearly impossible to tell the changes without being very familiar with the FAR/BAR contract.
We have always crossed out and initialed contract changes or outright omission of clauses if it was necessary and both buyer and seller initialed the changes. You will see this yourself sometime in the future if you haven’t already. The proposed changes are very obvious. Not so with this agent’s intentionally edited contract.
What we don’t expect to see, and we never have before, is for an agent to literally edit the clauses in the contract that was approved and mandated by the Board of Realtors® and the BAR Association to be used. Changes can be made but by strikethroughs or by addendum. They should not be done by editing text and submitting the new contract to an unsuspecting buyer.
If you are an agent, broker or an official of the Board or the BAR, we will be happy to submit the email chains and the edited contract for your scrutiny. We are very willing to comply especially if you will prosecute the agent and the closing agent who also appears to be involved. How many buyers or sellers have already been taken advantage of in the past? Will some of the readers of this article be next? Be careful out there.
To your limitless success,
Real Estate Mentor Program Founder