In any bag of apples, there is always a bad one and a few that are too mushy to eat. While you may be upset that your bag isn’t perfect, you haven’t put that much into it. At most you can spend another $4.00 and buy a new bag of apples.
Unfortunately, when it comes to real estate, you’re buying or selling perhaps one house every 5 to 7 years. More to the point, your home is typically your single largest investment. So a bad agent can not only make the transaction more difficult, it can ruin the whole home-buying or selling experience.
What’s worse, when it comes to real estate, a few bad apple agents have the potential to taint an entire industry.
But the fact that there are a few incompetent agents around giving everyone else a bad name isn’t new. But as a consumer, you should be on the lookout so you don’t wind up on the short end.
Some recent examples of behavior giving brokers a bad name include:
In Atlanta, a homeowner recently complained that one agent was bringing down the property values of the whole block.
“One agent has several for sale signs up in our neighborhood. She gives the appearance of being the only game in town. But what she’s really doing is buying these houses for her own portfolio from the sellers who gave her the listing,” said one homeowner who is president of his homeowner’s association.
While not illegal, the effect has been to artificially drive down prices in the neighborhood.
Another twist on this is the real estate agent who promises to purchase the house for a certain price if it doesn’t sell within four weeks. While the agent does put up a for sale sign, the property never quite makes it into the multiple listing service. At the end of the month, the agent buys the property for a below market price and then flips it for an easy profit.
One Los Angeles homeowner wrote an offer to purchase a house owned by a real estate agent who worked for a well-known firm.
The inspection turned up a host of problems, including a broken pipe in the drainage system.
The agent asked his gardener to cover it up, but the gardener refused. So, the agent hired the handyman to replace the pipes. However, the handyman snapped an existing pipe, replaced the broken piece, and left the drainage system looking as though it had been fixed.
After moving in, the homeowner discovered a handful of problems the agent knew about but failed to disclose, including earthquake damage, aesbestos, flooding problems, and environmental problems.
“The problem is that we used as our buyer’s agent an agent from the same office as the seller. It was a dual agency situation and we weren’t properly advised,” said the homeowner, who has purchased more than 7 other properties in the past 20 years.
In addition, during the negotiation of the contingencies and the inspection problems, the homeowner received a fax in the mail where the seller appeared to agree to everything.
“But at the top of the letter, in very tiny writing, was a sentence that was a full contingency waiver. If I’d signed that letter, we’d have been sunk,” he added.
The cost to fix the damage is more than $75,000. The real estate company is currently negotiating a settlement.
“When you have a dual agency situation, it can work out fine. Or there can be real problems. But either way, it leaves the impression that things were handled badly,” said the homeowner.
For the high-quality, informed real estate agent, it’s another ding for a professional that already doesn’t get enough credit for the good it can do for home buyers and sellers.
Jan. 3, 2000.