I thought I had seen it all in the last 12 years, but a new one just crossed my desk.
Real estate is a great example of the concept of win-win. When a seller gets what they want and a buyer gets what they want, usually two agents get what they want too. I guess that really ends up being a win-win-win-win.
Problems arise when one of the parties gets greedy, becomes demanding, inflexible or flat out misrepresents what they can or are willing to do. Honest representations, clear communications, realistic expectations, complete and full disclosures and competent agents will go a long way to making real estate transactions a win-win for everyone.
In a fast moving market where inventory is scarce and buyers are competing for homes, many buyers and their agents are tempted to woo sellers by overrepresenting or flat out misrepresenting their offers. Some of the tactics I’ve seen are buyers who make simultaneous offers on multiple properties when they can only purchase one. They play the offer-counteroffer game until an agreement is reached on one home and then simply back out of the others. Another ploy is to represent the offer as a noncontingent offer when in fact they can’t purchase without selling their current home. Another is to over-offer on a home with the intention of having the appraisal or home inspection provide reasons to renegotiate. Another is to overstate the buyer’s true interest in the home, complete with family photos and poetic cover letters. One more is when an offer is written as an all-cash offer when in fact the buyer will need a loan.
This brings me back to where this story started. Last week we got an offer on a home in Gilroy. The agent called me four or five times over a couple of days wanting to make sure she understood the seller’s needs, and to tell me how much her buyers wanted the home. She sounded very professional and very experienced. A day later her offer was in my inbox, and it matched all the conversations and representations she had made. It was complete with a pre-approval letter on the letterhead of a major bank, and a letter from another major bank showing the buyer had the required funds.
It was late on Friday when the offer was received, so we could not speak to the lender until Monday. Everything looked above board, so there was no reason to suspect anything. Once I reached the lender, our perception of the deal changed: He did not know the buyer, had never worked for the bank on the letterhead and knew nothing about our deal. After further analysis the proof of funds letter was also bogus. The agent or buyer had cut and pasted both the pre-approval letter and proof of funds letter using the banks stationary. Neither was valid.
Once we notified them we had discovered the discrepancies, they immediately forwarded me to a new loan person who would supposedly make everything right. It was obvious they had lied about the pre-approval and funds hoping they could make it right before we found everything out. They were willing to lie about the pre-approval and available funds in order to tie up the house while they sorted things out.
My question to you is this: If your agent is willing to lie or do dishonest things for you, are they willing to lie or do dishonest things to you? If an agent is willing to lie to get you the deal, would they be willing to lie to you about the inspection reports, the termite reports, you’re contractual obligations, the loan terms or further inspections that should be ordered? My bet is yes. I’m pushing 60 and one thing I’ve learned is that you can’t change the stripes on a zebra.
Honesty is not situational and neither is the truth. Realtors have fiduciary duty to their clients and are obligated to treat other parties with an implied covenant of good faith and fair dealing. That means they will deal honestly without breaking their word or using shifty means to avoid obligations.
I thank God for the conscientious hard working and honest Realtors I interact with every day. It saddens me that we have to put up with the few who sully this profession. The commission should never be more important than the client’s best interest.
Choose your Realtor wisely. Choose someone who has the character and conviction to tell you the truth and insist on representing you honestly to the other parties.
Lee Schmidt is the broker/owner of Realty World South County and can be reached at (408) 782-9933 or [email protected].
