Buyer beware

Two recent vignettes –

Lender story: Three days before closing, a Charlottesville lender, who had not previously given a written GFE (Good Faith Estimate) to the Buyer, somehow added ~$3,000 in mystery fees. Only when pressured by the Buyer’s Agent who had another reputable lender take over the loan, did this lender magically find a way for those “fees” to disappear.

Realtor story: Buyer who has representation goes to a builder’s sales office. Agent on site tells the buyer that, if she chooses not to have Buyer Representation, they can negotiate a “sweeter deal.” At no point does this agent mention agency.

“Agency” means every relationship in which a real estate licensee acts for or represents a person by such person’s express authority in a real estate transaction, unless a different legal relationship is intended and is agreed to as part of the brokerage relationship. Agency includes representation of a client as a standard agent or a limited service agent. Nothing in this article shall prohibit a licensee and a client from agreeing in writing to a brokerage relationship under which the licensee acts as an independent contractor or which imposes on a licensee obligations in addition to those provided in this article. If a licensee agrees to additional obligations, however, the licensee shall be responsible for the additional obligations agreed to with the client in the brokerage agreement. A real estate licensee who enters into a brokerage relationship based upon a written brokerage agreement that specifically states that the real estate licensee is acting as an independent contractor and not as an agent shall have the obligations agreed to by the parties in the brokerage agreement, and such real estate licensee and its employees shall have no obligations under §§ 54.1-2131 through 54.1-2135 of this article.

Moral to the story? There are questionable standards being used by so-called “professionals” out there. A good Buyer’s Agent can help navigate and advise appropriately.

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And dammit, that these people are out there seeking to take advantage of the unsuspecting consumer really pisses me off.

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5 Comments

  1. Builder Sales Rep December 17, 2006 at 13:30

    Mr. Duncan-
    How can you write something so biased? Your inability to cite specific examples only magnifies a growing misconception that all builder representatives are crooked, selfish, and “seeking to take advantage of unsuspecting consumers”. How untrue. Typically I find your blog to be well thought and insightful. Taking two slanderous stories and attacking your partners in this industry will certainly not assist in creating a healthy real estate atmosphere in central Virginia. I challenge you to mature you way of thinking and instead of pointing fingers, accept that there are crooked people in EVERY profession. Yes, Mr. Duncan that even includes real estate agents. Why don’t you post a story about crooked real estate agents? Until we all start to accept that fact, I’m afraid we’ll never be able to work towards a truly healthy real estate market here in central Virginia.

  2. Jim Duncan December 17, 2006 at 13:55

    Thank you for visiting, reading and commenting.

    I agree that there are crooked real estate agents and crooked people in all professions. That is an unfortunate reality. That and the fact that a relative few can impact the collective reputations of so many, myself included.

    I have found however, that there is very little appropriate disclosure of agency relationships at many (not all) new construction sites, and when a fellow Realtor tries to negotiate buyer’s representation out of the equation, I find that offensive.

    There is too little agency disclosure right now. I showed a listing of mine yesterday and clearly stated that I was there as the Seller’s representative. Curious, I asked whether they had been calling listing agents to see houses and whether any other agents had done as I had and disclosed their agency relationships. None had.

    Your inability to cite specific examples

    Please see the two examples in the original story.

    Regarding whether the stories are slanderous or not – I argue that because they are true, they are not slanderous.

    It is our duty to disclose for whom we work. Not doing so is negligent and harmful to all of us.

    I have posted stories about less-than ethical agents before, and will continue to do so.

    I do have to work with ethically-challenged Realtors from time to time; but I hesitate to call them partners. We are all obligated to cooperate, but I choose my “partners” carefully.

    Perhaps as the real estate profession becomes more transparent and with conversations such as ours, those who are ethically challenged will find their way into other lines of work and consumers will become more informed and therefore empowered to ask the right questions.

    My challenge to you is this – rather than accept that there are crooked people, do something about them. This is my way.

    Again, thank you for your time and your comments. I truly appreciate both.

  3. Builder Sales Rep December 17, 2006 at 15:38

    Thank you for your timely and thorough reply. Perhaps I misinterpreted your original comment. It appeared that you blatantly attacked sales representatives employed by a builder. Your response however, made it seem like you had more of an issue with ALL builder representation, including licensed agents.

    As a result of my frustrations I came across quite harsh. I viewed your post as another harmful and ignorant attack on my profession. I do apologize.

    The thought that a builder representative (real estate agent or not) would try to sell a home by urging a consumer to opt out of their buyer representation is offensive to me as well. I am frequently asked from agents and consumers if buyer representation will affect a builder sales representative’s income in any way. It doesn’t. They want to know if there’s any reason to not have an agent on the deal. I can’t think of one. In fact, if I had it my way, I would have a real estate agent as a part of every single transaction. Having another knowledgeable person involved in the deal only makes things easier and provides the consumer with the highest level of service. But, like you said, it is unfortunate that actions of “a relative few can impact the collective reputations of so many.”

    As an employee of a builder outside of central Virginia, I feel consistently faced with adversity from many real estate professionals. Recently I was astonished to see a widely distributed community flyer from a broker that painted builder representatives as selfish and consistently working in the best interest of only themselves. It was clearly an attempt to generate traffic for their buyer agents by making the public feel like they would be cheated if they went into a builder’s office alone. It may work, but I ask: at what cost? What is shocking is that this is not the first example I have seen where an agent tries to paint builder representatives as the untrained, ruthless enemy. I don’t understand the need for competition in that scenario! Again, I apologize to you because I viewed your original blog entry as another form of attack.

    I do agree that conversations like these will only strengthen the professional landscape within real estate and ensure that consumers are well equipped for their next home purchase. For that, I thank you.

  4. Waldo Jaquith December 19, 2006 at 13:31

    I don’t know much about real estate, but I certainly didn’t take Jim’s comments to illustrate anything more than that there are crooked folks out there. It hadn’t occurred to me that he might be picking on a particular group and, even re-reading it, I just can’t see it.

  5. Jim Duncan December 20, 2006 at 09:09

    I actually also emailed the author off-line thanking him/her for the comments and discussion. This is the text of the email (I have removed the links) because I really don’t court controversy!

    Thank you for taking the time to visit my blog yesterday and for your thoughtful comments. These are two other stories that I have written that you may find interesting. I didn’t cite them in my response because I think it’s best to occasionally let sleeping dogs lie, as it were.
    [links removed]

    Again, thank you and I do hope you stop by again.