What Selling Real Estate in the 1970s Was Like

Selling real estate in the 1970s bears little resemblance to today.

Selling real estate in the 1970s was as different as Red vs Blue states today. Many years ago, on a faraway planet known as Orange County, California, I once primarily represented investors and created the craziest home buying concepts that were almost always accepted without question. Looking back, I possess fond memories of this time, when many agents were considered pioneers, innovators, although, in some cases, crooks; and because of the latter, I’m glad the 1970s are history.

A real estate agent could do just about anything she could conceive in real estate. For me, personally, I’m capable of conceiving a lot. I suffer from imagination overload. There were few laws in the 1970s, except for usury and Fair Housing, which governed agent activity.

I’ll share some of these unusual 1970s concepts and practices with you, in hopes that you will realize how far we have come today in real estate, and not that you want to do any of this yourself. The first thing was my buyers never signed a purchase contract. Buyers were not involved. They signed an assignment of contract from me. I wrote all of the purchase contracts in my name or assignee. I decided the best way to purchase the property and when the offer was accepted by the seller, I presented it for consideration to the investor.

We didn’t have a fax machine. Copiers, the size of small cars, utilized huge drums. We dialed black rotary phones and called sellers from the newspaper. MLS consisted of a large book published once a month, with small weekly updates.

Just about all of the financing was creative, mostly subject to, with a few lease option sales, land contracts and wrap-arounds. I sold second trust deeds after creating the paper from thin air, pocketing a 20% to 30% discount and using the instruments as down payments on property I didn’t always assign away. Some of the homes I kept for myself. We also picked up loan proceeds by writing it into the contract, until lenders included verbiage to stop it.

When selling real estate in the 1970s, in the purchase contract, the buyer obtained a loan of $100,000, delivered $96,000 to the seller, and the difference, if any, of loan proceeds above $90,000 was paid to the buyer’s brokerage. This was on top of the real estate commission. All parties would agree to this. Blows my mind. Against the law today.

Today, an assignment of contract is unusual, and if I spot a buyer trying to wholesale a property like that, I’ll advise the seller not to take the offer. It’s generally not in the seller’s best interest. Besides, double escrowing or picking up a property through an assignment is rare in a seller’s market, but it doesn’t stop seminar gurus from teaching this old / new practice to the young impressionables and special little snowflakes.

I never inspected properties when selling real estate in the 1970s. This was before The Easton vs. Strassburger 1984 decision that held agents and real estate brokers have a duty to conduct a reasonable inspection. My transactions were fast and furious, we typically closed in a week. Cash flow ruled, but if you couldn’t get cash flow, negative cash flow was OK with 7% down and straight notes for equity. My entire practice was based on my ability to negotiate and to negotiate well.

The 1986 Tax Reform Act put a halt to a lot of investing (no more tax write-offs for negative income), and the 1991 downturn in the market pushed a lot of investors out of the marketplace. Years go by. Things change. Markets evolve.

Every so often I receive an offer like one of those from 40 years ago, and of course I send it to the seller. But I also explain in detail what it is. In fact, we received one of those types of offers a few days ago, trying to lowball 80 cents on the dollar in a seller’s market and wholesale it out, OOffda. I think this means seminar groups are in town.

I’m probably one of the very few Sacramento Realtors who survived selling real estate in the 1970s and the creative financing fiasco that time period entailed. Let’s just say we’re much better off today. If you’re looking for a top producer in Sacramento to sell your home, call Elizabeth Weintraub at 916.233.6759.