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A Twist on Buying a Home Using the Listing Agent
Buying a home using the listing agent is a rookie move.
Are you thinking about buying a home using the listing agent? Sometimes buyers in Sacramento arrive at this silly thought process through desperation and not necessarily through dishonest intentions. Especially in our present market of low inventory in Sacramento. Stats from our trade association says buyers typically have to write two offers to buy a home, meaning they are successful 50% of the time on average, and I’m just thankful those odds do not constitute my professional experience. If a buyer loses out on a home, often the buyer blames her buyer’s agent.
Is it the buyer’s agent’s fault? Depends. Did the buyer’s agent suggest a strategy the buyer ignored? A strategy that would have resulted in the buyer purchasing the home? Then it’s the buyer’s fault for not trusting and listening to her agent, and let me add if you, as a buyer, do not trust nor listen to your agent, what in the hell are you doing working with that agent? Agents are a dime a dozen in Sacramento, and perhaps you should find an agent you do trust and respect. Without trust and respect you have no fiduciary relationship and, without fiduciary, you are doomed.
In these types of situations, sometimes buyers think about a buying a home using the listing agent because they think the listing agent will give them an edge. What kind of edge, you may ask? Information about the seller, mostly. Or they think the listing agent will compromise her ethics because we’re all just snakes in the grass anyway, and will do anything to get paid both sides of the commission. There are a few snakes in the grass in this profession, especially the hot bed of snakes in Orange County (JK), but I prefer to call them unsupervised. For the most part, unethical listing agents are few and far between. Plus, ethical listing agents make up the majority and won’t share personal information about the seller anyway.
I read a series of comments on a public website, generated by a prospective buyer about buying a home using the listing agent. That buyer’s take was agents who say it’s not a good idea to use the listing agent are liars. Further, the elephant in the room is that buyer also believes a listing agent will screw over her seller in order to accommodate the buyer’s offer, which is against the law. That’s a messed-up and confused buyer. Yet it goes to show what some buyers erroneously believe. One bad apple does not rot the entire tree.
Much as I may rally on about why buying a home using the listing agent is sort of a stupid and pointless idea, I have yet another twist that recently came to my attention through an unsolicited email. A buyer wrote to ask about a dual agency situation. Apparently the buyer had decided that buying a home using the listing agent would give him an advantage. This was a fixer upper the buyer intended to later flip. The listing agent made a future listing a contingency of the purchase, of all things.
Yes, you read that correctly. Allegedly, the listing agent, as a condition of dual agency, forced the buyer sign a side addendum promising to pay a certain percentage of commission and promising to list the home through that agent when the buyer was later ready to sell. Seems to be in direct violation of the Realtor Code of Ethics, which states the agent must put the interests of the parties above her own. But perhaps that agent was not a Realtor. Not every agent is a Realtor and there are differences between real estate agents and Realtors. Moreover, it most likely violates California real estate law, on top of a possible breach of fiduciary with the seller.
My advice to buyers in Sacramento is don’t look at hiring the listing agent. A competent buyer’s agent will extract MORE information about the seller from the listing agent than you EVER will anyway. Great agents have skills you don’t. There is no advantage. And I say that as a top listing agent in Sacramento who consistently closes a phenomenal number of sales. Find the very best buyer’s agent, an agent with a long track record of providing superior negotiation skills, and you’ll be light year’s ahead of yourself. If you need a sharp Sacramento buyer’s agent, I can suggest a few. Call Elizabeth Weintraub at 916.233.6759.
How a South Land Park Realtor Lost Credibility
All Realtors and not just South Land Park Realtors should practice ethics.
The obvious risk management question about relaying a story concerning a South Land Park Realtor who lost credibility (and most likely misplaced his ethics) is whether the person telling this story could be liable for talking about it, and let’s just say the best defense in any situation is the absolute truth. Before you ask, I have also considered filing an ethics complaint against this individual, but a) I am not the ethics police, and b) a first-time violation is a small fine. In my mind, it’s better to bring this action into the open in hopes that another agent won’t be so inclined to do it.
It started with an offer on my South Land Park listing above list price, with about 40% down, prior to our first Sunday open house. I had no record through the lockbox that the agent had even showed this home. Not good. The purchase offer also expired in less than 24 hours. I used to use that trick myself back in the 1970s, and it worked well then, but demanding a fast answer doesn’t work so well in today’s world. It shows aggression for little reason. Moreover, the seller will simply issue a counter offer, which starts the clock again.
As the South Land Park listing agent, my suspicions were aroused by all of this, but then I tend to question everything that seems a bit out of normal. We sent a counter offer.
The South Land Park Realtor replied to report the counter offer was “a deal killer,” because he wanted to use a different title company. First, often when a buyer insists on choosing the title company in Sacramento, which is against normal local custom, it sends up a red flag, at least to this experienced agent, that there could be something the buyer doesn’t want the seller to find out about. Not always, but it’s a possibility. Further, who uses words like “deal killer” anymore? Our transactions are not “deals.” Then, the South Land Park Realtor mentioned he was showing the home “again” on Sunday to the buyer, and there was also a new home that came on the market he would show. Implying the buyer might possess second thoughts.
It made me wonder even more strongly if perhaps he had not shown the home at all in the first place, but that was not the primary issue.
My Elizabeth Weintraub team member held the home open on Sunday, among many homes in South Land Park open that Sunday. We had a stupendous turnout. I asked my team member to keep an eye out for the South Land Park Realtor and his buyer, to try to find out where the other home on the market was located — because I could not find any home anywhere in the vicinity that was like my listing in South Land Park. I wondered if he had lied to me about the new listing. Sure enough, the duo came through the Open House and my team member gave me the name of the street they had mentioned, where the other “new listing” was evidently located.
I love my team!
Hmmm . . . the only home on that street was pending. Very similar to my listing in South Land Park. I’ve done business with that listing agent, so I called. The listing agent answered his cell. On a Sunday no less. Asked if the name of that particular buyer meant anything to him. Why, yes, he was in escrow with that buyer on that particular home and had been in escrow for about a week. Holy toledo! The deposit had been cashed, too. The deposit was the same check number the buyer had submitted for my listing in South Land Park. What? My jaw dropped. Unbelievable.
That could be a trust fund record violation, which is heavily regulated by the California Bureau of Real Estate. I would not want to be standing in the shoes of that South Land Park Realtor, and neither should any other agent in Sacramento.
By this time, we had multiple offers on my listing in South Land Park. We issued the alleged buyer a seller multiple counter offer, asking the buyer to cancel the escrow at XYZ title company for that particular property, providing the buyer could not afford to own both homes, and to submit a new deposit check for this transaction. We also requested release of deposit. If the buyer truly had no plans to cancel our transaction, the buyer would release the earnest money deposit, and it was the only way the sellers would feel safe accepting that phony offer.
I’m fairly confident the South Land Park Realtor was a bit astonished to realize we were on to his tactics and discovered his deception. Not only that, but his actions could have placed his somewhat prominent buyer into a difficult legal situation. The moral is a buyer should not ever write offers for more than one home, because it can breach the good faith covenant inherent in purchase contracts and lawyers say it is against the law. But if you’re such a moron that breaking the law doesn’t matter to you, for crying out loud, don’t submit an identical deposit check and possibly violate DRE regulations on top of it.
This home in South Land Park sold at full list price to sweet buyers who deserved it. To buyers represented by a wonderful South Land Park agent who was a sheer delight to work with. We’re going out for cocktails next week at Riverside Clubhouse to celebrate. We’ve never met. It’s a good idea to maintain relationships with other agents in the industry. This other South Land Park Realtor is not an agent I can honestly recommend to anybody, and that’s a shame. Call Elizabeth Weintraub at 916.233.6759 if you’re thinking about selling your home in South Land Park. I’m resourceful, and I get to the bottom of nonsense in this business.
A Blessing in Disguise is Rarely a Mistake
There are all types of real estate clients in Sacramento who routinely make a mistake.
Except when I am predisposed, like at a movie theater or on a plane, I answer my phone. It’s rarely a mistake. I missed a call yesterday from a caller who rang twice while I was at Tower Theatre watching Brooklyn, the screenplay by Nick Hornby, about an Irish girl in 1952 (the year I was born) who moved to America. Touching, beautiful, sweet story about loss, love, discovery and strength, watching this young girl mature, blossom, develop confidence. When I got back to my home office, I considered calling back the no-message caller but instead decided to cut back the hydrangeas before it got dark and cover up the cactus garden. We were in for a freeze in Land Park.
Minutes after opening the back door my phone began to ring. Where did I leave it? I frantically searched, dashing from the kitchen into the family room, following the ringing sound and there it was, lying in the cat condo of all places along with my bluetooth. Hmmm. It was the same guy who had called twice earlier. He was very excited about the house he had just toured and expressed gratitude that I had forced him to go see the home without me.
What? Who was this? I let him talk. He obviously had called me by mistake because I had not talked with him earlier. I did not tell him to go see a home, and that’s not the sort of thing I would do anyway. I would never send a buyer over to a home without an agent present, that’s just poor customer service and laziness. He continued rambling that he wanted to sell his home in Fair Oaks. Sure, we can do that, I promised. I’m a top producer in Sacramento who gets top dollar. What’s the address? He gave it to me.
That’s when he said that he wanted me to also represent him to buy the home on Alex along with listing his own home because “it would make things easier.” No, not really, I countered. It’s just as much work to sell your home as it is to help you to buy a new home. Just because you’re the same person doesn’t mean it’s not twice the work. I knew where he was going with this, and just let him blab. He stumbled and seemed at a loss for words. “Well, it’s easier for ME,” he finally says. Why? Because you can call the same agent, is that it? Thinking to myself: he’s already called a different agent thrice and has no clue that I am not that agent. Yeah, yeah, that’s it, he says.
Then he rattled on about the price of the home on Alex. “You said there was some flexibility in that sales price,” he insisted. Well, no, I would not have ever said a thing like that. Because that would violate the Code of Ethics, and a listing agent can’t say such a thing to a potential buyer. This is when the caller probably started to realize that maybe he wasn’t talking to the listing agent. He said, it doesn’t matter because the listing agent is friends with the seller. Some friend to the seller that is, I ventured.
That’s when he hung up.
How to Contest a Fannie Mae BPO for a Short Sale
Contesting a Fannie Mae BPO for a short sale is easy.
Agents in Sacramento often come to my website for answers on short sales, and finding out how to contest a Fannie Mae BPO for a short sale is no different than anything else. Buyers and sellers use my website for the same information. What I don’t do, however, is interfere in another real estate agent’s short sale transaction — especially when their clients run to other websites desperately searching for information and beg other agents to answer their questions, just because we may happen to participate in online discussions. Consumers don’t know the difference between being in escrow and asking other agents for advice versus being unrepresented, and some agents don’t either.
Being a Sacramento REALTOR means I must adhere to the Code of Ethics. Any snot-nosed agents complaining that a high profile Sacramento Realtor interfered in their transaction could land anyone of us before an arbitration hearing — simply out of spite or jealousy — so I don’t give those jerks the ammunition. Despite that, I hate to see buyers twisting in the wind because their agents don’t have the answers, so I often offer to speak with their agents if the clients will ask their agents to call me.
A buyer in escrow and posting on Zillow last week asked the question of whether she could contest a Fannie Mae BPO for a short sale. I wanted to answer her question, but instead suggested she ask her agent to get in touch with me. I’m not going down that path of giving advice to somebody else’s client. There are plenty of other agents who a) don’t care about the Code of Ethics and b) give lousy advice, anyway. Unfortunately, her agent never called me and she apparently did not contest the Fannie Mae BPO, so she lost the opportunity to challenge.
I’ve worked on Fannie Mae short sales for years, and they’ve always been the same. Overvalued BPOs. Some homes may eventually even appraise by the buyer’s lender, which is probably why they do it, but some don’t. I guess Fannie Mae takes its chances. But the fact that has not changed is that the Fannie BPO is rarely reflective of value nor is it the appraisal. This is the thing that people confuse. They think that the BPO is the appraisal, and it is not.
I verified my bogus BPO value suspicion when the Fannie Mae appraiser called for access to a short sale in West Sacramento. I let it pass in conversation that I do not hold him responsible for the over-inflated value that Fannie Mae will most likely inflict on this home, and that I realize his appraisal will be less and reflect the true market value. He collaborated that statement. Replied, yes, agents get angry with him and believe he gave Fannie Mae the wrong value when he did not.
Sure enough, Fannie Mae came back and asked for 15% more than the sales price. Unlike the poor buyer on Zillow, we did not rollover. I contested it because it was wrong. I submitted an invoice from a licensed contractor detailing all of the work that was needed to bring this home up to the standards of homes that were selling for a higher price. The home reeks of pet urine. I submitted comparable sales and in detail explained why adjustments were necessary to some of the higher priced, turnkey homes, which this home was not. I asked the buyer’s agent to prepare an addendum and state his opinions right on the addendum so Fannie Mae could see it.
I did this not so much because I represent the buyer because I do not represent the buyer, this Sacramento Realtor represents the seller. I did this because once the short sale is approved and the buyer’s appraiser gets her hands on the value, I’d have to do it again anyway.
As a result, Fannie Mae backed down on its demand and reduced the inflation by about 10%. Now we could come to an agreement and move forward with the short sale.
How Are These Sacramento Real Estate Things Still a Thing?
My experience of working with agents over the past 40 years shows that you can’t change a narcissistic real estate agent, no matter how much that agent might desire to change, if the agent is clueless. It’s generally cluelessness that causes a self-centered agent to say silly things. After all, agents are not immune to ignorance in any greater numbers than any other person in the world. It’s the bell curve distribution. You’ve got bad doctors, bad politicians, bad school teachers, bad law enforcement officials, and bad real estate agents, along with the good.
Some agent implied recently that she felt the REALTOR Code of Ethics is an over dramatization of the industry and appeared as though she preferred to pick and choose which Articles to adhere to and ignore the rest. Because this agent must operate in a vacuum, dancing alone to tunes in her head that only she can hear. Or, perhaps she is not a REALTOR because only REALTORS must adapt the REALTOR Code of Ethics. You can’t change agents like that. They don’t want education. How is it that some agents are not a REALTOR? How is that still a thing?
Earlier this week another agent said she was not submitting an offer for her buyers on a short sale listing because we would make her promise to stop writing offers for that buyer. Duh. It’s a good thing we avoided getting tangled up with that disaster, but how is this type of ignorance still a thing? After 10 years of Sacramento short sales, how are real estate agents still under the goofy impression that it’s a worthwhile endeavor to write a bunch of offers for a buyer when a buyer can purchase only one home? It’s a waste of time for everybody involved, including the buyer’s agent. And it’s considered against the law.
Let’s see, Ms. Shit for Brains . . . you want to write an offer on an Elk Grove short sale but you don’t want to commit to waiting for short sale approval? You want us to accept your buyer’s offer, remove the home from the market, submit the entire short sale package to the bank, advise you weekly on our activities, negotiate the short sale, resubmit endless financials and, after 8 to 12 weeks, while the foreclosure doomsday clock is still ticking for our sellers, finally produce a short sale approval letter only for your buyer to announce that she has purchased a different home?
You want to waste the time of all of these dedicated people: the Sacramento listing agent, her team members, transaction coordinator, escrow officer, title officer, the buyer’s lender and the sellers’ entire extended family on the off-chance that maybe your buyer will elect to perform at the 11th hour? What are you thinking? Where is your head? How is this still a thing?
Granted, some agents list short sales that they should not be listing because they did not qualify the sellers for the short sale or it’s priced inappropriately or they are using a third-party vendor for negotiation, but that’s not the case with this Sacramento Realtor. I have closed more short sales since 2006 than any other agent in a 7-county area. My short sales close. That’s because we choose to go into escrow with strong buyers who are committed to closing, and because it’s doubtful you will find a more qualified Realtor in Sacramento to negotiate your short sale.
But, seriously, after all these years, how is this attitude toward short sales still a thing?
