It may be hard to believe, but I receive calls regularly from buyers and sellers that have become
estranged from there realtor or feel they are being taken advantage of by the realtors involved in the sales transaction. Here are some examples:
Listing agent lists property for a seller. An offer eventually gets accepted by the seller for $150,000.00. The bank on behalf of the buyer conducted an inspection and the appraisal came out at $135,000.00. Despite the contract specifically providing for the right of either party to cancel in the event the property did not appraise for the full purchase price, the seller?s agent told her THAT SHE HAD TO SELL THE PROPERTY FOR WHAT THE PROPERTY APPRAISED FOR AND THIS WAS A VERY ESTABLISHED REALTOR!!!!! The seller felt something was wrong and called me. I reviewed the contract with her and?the standard MLS Board Approved Real Estate Contract provides for cancellation in the event the?property does not appraise for the full purchase price. In this case the seller did not want to sell the property for $135,000.00 and at this point was being harassed and belittled by her own agent and the seller was at her wits end. I contacted the realtor and let her know the seller was now being represented by an attorney and that the seller had made the decision to cancel the listing and that she was being given 48 hours to take her lock box off the door and pick up her sign. The realtor was mad and put up an initial fight but after realizing she was wrong on the appraisal issue. Realizing the degree
to which the relationship had fallen apart with the seller, she cancelled the listing, took her lock box off the door, and picked up her sign.
Buyer agent was representing a buyer that was buying her first house. First time home buyers are by far the largest group that get taken advantage of by realtors. In this case a home was looked at and the buyer initially stated that she liked the home but did not feel like somewhere she could consider home. The realtor suggested the buyer write an offer just to put the house under contract and to give her the option to buy it should she decide to go through with a purchase. An offer was made and accepted. The buyer repeatedly called and attempted to communicate with her realtor to explain that she did not want to go through with purchasing the property. Despite the buyer?s pleas for a cancellation, the realtor kept moving forward with the sale. The buyer knew there was a problem and did not know where to turn. She contacted my office and I communicated with the realtor and explained that she was the agent, not the principle, and that she must follow the instructions of the principle ? the buyer. Eventually the sale was called off and the buyer went on to find a new agent and successfully purchased
a house she felt she could make home.
Seller had an agent. Seller fired the agent and a cancellation agreement was signed by all the parties. The seller then found a buyer FSBO, wrote up a contract, and took the contract to a title company and showed the agent from the title company the cancellation. The underwriter for the title company mailed a letter to the fired agent and requested a letter from the agent stating that they were not owed a commission. The agent refused to provide the requested letter, despite clearly having no right to a commission. With a closing date rapidly approaching the seller got worried and contacted me. I contacted the agent and was unable to persuade the agent that a commission was not due. Ultimately, we decided to terminate the title company and went to another title company that did not make a ?no commission due? letter a condition of issuing title insurance. The sale went through perfectly, and the agent did not get paid the money she was not owed!
It is important to understand that realtors only get paid if they conclude a sale. Therefore, at times realtors do and say things that are not in their client?s best interests to earn a pay check. In addition to the need to earn a paycheck I have also noticed the following characteristics tend to exist when realtor disputes arise. The common characteristics I have seen involving realtor disputes are:
- Age ? buyer is either very young or very old.
- First time home buyer ? typically a young couple that have never purchased a house before.
- Self-Dealing ? Agents talk to a seller to start a listing and realize the seller is expecting to receive considerably less than the true fair market value of the property. Instead of explaining that to the seller so the seller can make more money, they themselves or through another party purchase the property for the discounted amount AND EARN A COMMISSION!!
- New Agent or Inexperienced Agent ? The agent does not know what to do and instead of
making the buyer or seller aware of that they hedge their answers or give incorrect information that eventually hurts the buyer or seller due to lack of representation
- Misrepresentation ? The agent will hire their own inspector, their own contractor, or even their own lender, to make the transaction easier for the agent to earn a commission, not better for their client.
- Agents that sell properties they own ? Sometimes agents will sell properties they personally
own and not explain that to the buyer.
- Small towns ? Buying or selling a property in a very small town where there are very limited
options for representation and all the realtors in the town know one another.
- Old homes or homes that have challenges ? Instead of explaining to the buyer that the home is old and therefore may have wiring problems or plumbing problems, or that the grading of the yard will create flooding into the property in cases of hard rains, they push the buyer to buy for a commission and do not fully explain these challenges to the buyer.
Being a real estate agent is not easy. They only have income if a transaction completes. Real estate agents have bills to pay, just like the rest of us. Real estate agents do not have an unlimited amount of time, just like the rest of us. Real estate agents are not bad people, its just that the incentives and motivations for a commission can sometimes cause them to withhold, distort, or misrepresent important information that a buyer or seller need to make the best decision.
If you are in a dispute with a realtor call our office. We will evaluate the merits of your claims and provide you alternatives. We will contact the realtor?s broker if necessary, and will take whatever other steps that will lead to creating a more favorable outcome for you.