A recent personal experience has triggered this post. I will start out by letting you know that this is likely to be more of a rant than an educational exercise, but I feel the words need to be said and at the very least, I will vent and feel better.
My wife and I are looking to buy a new house here in Palm Beach County Florida. I will tell you, past experience we have had with the “professionals” we have encountered has taught us a great deal. Florida isn’t known as the fraud capitol of the country for no reason and given what I do for a living; you would think I would be in a position to find quality people to work with. Clearly, I have yet to develop the proper skill set, but after this recent experience, I think I have it figured out. Let me explain.
Since a large number of transactions here in Palm Beach County are short sales or foreclosures, you do get used to the fact that homes will be listed at below market prices and provide a limited window for people to make offers, or even be placed in a position to enter almost an “auction” like situation. Not that this is a bad thing, certainly if the process is transparent, no complaints from me on that count. It is when you start to see that the “highest bidder” was not the person who got the house. To make matters even worse, the very professionals who are engaged to handle the process are often the people who either know nothing about the process, or ignore the corruption of that process.
I have two recent situations that have really got me questioning if there is any professional integrity in the local real estate community? Here are the two situations I speak of and I will let you decide if I have a case here. First situation was a short sale put on the market at well below its value, $299,000. Property came on the market on a Saturday, bids were being accepted through Monday, and the sellers would make their choice by Tuesday afternoon. After viewing the house and looking at recent sales in the area, I offered $350,100 for the subject property. By Tuesday evening my agent had called to say that no choice had been made and as soon as they knew something, we would be notified. It was Thursday morning when I was told our offer wasn’t accepted.
While disappointed, we kept looking. While searching the internet for homes a few weeks later, the same property is once again on the market, this time listed at $349,200. The listing states that this is now the bank set price and that offers will be accepted for 48 hours. Imagine my surprise. I had a firm offer in for more than the bank asking price, “lost” the prior bid, and now the house is back on the market for LESS than my offer. I once again called my agent who spoke to the listing agent. It appears that the seller of the house wanted to negotiate a private deal for all the appliances, light fixtures, closet units, etc. All things that were listed as not being conveyed with the house, but could be purchased from the seller and help reduce possible damage to the property by their removal.
So let me get this straight, I have to buy the things from the house that should have come with the house from the seller, or they won’t accept my highest offer, which is more money than the bank is willing to accept for the property? Really? My agent speaks to the listing agent and gets back to me saying that my offer satisfies the banks requirements; we just need to take care of the seller so they accept my offer. Now I guess I don’t have a choice here. If I want the house I have to buy the stuff from the seller. Not fond of the idea, but I don’t get much of a choice. So I tell my agent to find out what the seller wants for the property and let’s see if we can put together a deal. Next day I am told the sellers have accepted an offer, not mine, and that the house is off the market. Very fishy if you ask me, but we move on.
We locate a home, not a short sale, just a seller trying to sell a house. The property is listed at $479,000. Given the area and the condition, the property is much more likely worth $425,000 to $450,000. I offer $400,000 to get things started and the counter offer is $458,000. Nice to see solid movement, so I come back with an offer of $425,000. This is met with almost an instant reply from the listing agent that there is another offer, but if I want the house, I can have it for $448,000. My reply was for them to take the other offer, because I wasn’t going to go that high.
A few days later, the property appears as available for $459,999. I once again call my agent to find out what happened to the “other” deal. I am told that it fell through. Really, in just a few days, what could have happened? So I tell my agent to offer $430,000 on the house. The counter is $450,000, and I counter with a final and best offer of $440,000. The seller comes back at $443,000. I tell my agent that I am as high as I am going and if they want to lose the deal over three grand, I have no challenges with it.
My agent comes back and states that if I am willing to use the listing agent’s mortgage company for my loan, we have a deal at $440,000. Seriously, do you have any idea what I do for a living? Do you think I am going to throw my L/O under the bus to put this deal together? So I ask my agent about this and the reply I get is astounding. I am told it happens all the time and that some of the time when closing happens, the people are shocked at the terms and conditions of their loan.
So I ask all of you, where is the professional integrity? Is it no wonder so many people have such a low regard for the real estate and mortgage profession when things like this are allowed to happen and nobody does anything about it?
If the seller in my negotiation was willing to “give up” $3,000 in order for me to use his agent’s mortgage company, what could possibly been the motivation? They certainly weren’t going to match the terms I had from my current lender. Since my credit package was already underwritten and approved, couldn’t be an issue if I were going to qualify for the loan. Since I had a guaranteed close in 30 days or less from my lender, it could not have been about timing. So I ask you; what could possibly been the motivation behind such a condition?
I also need your opinion on why my own agent acknowledges that this happens, yet it doesn’t seem like anyone ever complains to anyone about it. So here we go, I am going to forward this blog post to my local real estate board and to the Florida State Attorney’s office to see if they think this is how business should be conducted in Florida.
Integrity is not an option as a professional. If I am wrong, and the local real estate board and the State Attorney think that what took place is acceptable, then I will accept their findings and continue to write, speak, and educate as many people as I can about raising the bar of professional integrity because, in my opinion, the industry needs to do better.
What are your thoughts?