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THE NEW TWIST THAT ENABLES A PERSON TO LIVE IN A HOME HE CAN'T AFFORD.

By
Real Estate Agent with Bill Cherry, Realtor 0124242

In Texas, our MLS published listing documentation specifically shows whether the owner would consider leasing the home as well as selling it, and it also shows the home's current tenancy -- owner, tenant or vacant.

A new quirk seems to have developed in this sparse market.  I don't recall it ever being so prevalent in past downturns.

Co-op agents are setting up appointments and showing homes as though their client is a qualified buyer.  In reality, the client is looking for a home to lease.  The co-op agent doesn't reveal that important piece of information to the listing agent, but instead infers that his client is a qualified buyer.

The appointment is established, the homeowner or tenant straightens up the home for the showing, then leaves for an hour or so so that the agent can show it to his client.  If the client doesn't like the home, the agent just reports that as feedback.  If the client likes the home and would like to lease it, the co-op agent seems to frame it as follows:

"My client really likes the house.  He's expecting a check for the sale of his business in Chicago, or the settlement of his uncle's estate.  He'd like to rent the house and close the purchase when he gets this money."

There is little likelihood that any of this about a purchase is true.  The client wants to lease the house until the owner realizes that the sale isn't going to go through.  Meanwhile, the home has been off of the market for at least a year, and is now being held hostage by a tenant.  You see, the owner finds himself having to make a deal to extend the lease, month to month or until the home sells, because at this point he needs the tenant's rent.

I have had this happen to me several times, twice within the past week.  In both cases, my clients didn't fall for the ruse. It seems highly unethical to me, but so far I've chosen to not file a complaint.

BILL CHERRY, REALTORS

DALLAS - PARK CITIES

OUr 45th Year

214 503-8563

WEB

 

Comments (9)

Courtney Cooper
Cooper Jacobs - Seattle, WA
206-850-8841

Hi Bill - I have had this phone call as well - interesting isn't it?

Aug 03, 2010 02:18 AM
Bryan Watkins
LRA Real Estate Group - Mesa, AZ

Bill, I had not heard of this before, but will watch for it here in the Phoenix area. thanks for the heads up.

Aug 03, 2010 02:21 AM
Katherine Fornale
REMAX REALTY 9 - Howell, NJ
SFR, GRI

Highly unethical!  I have seen several listings in our MLS that specifically state "only show to qualified buyers" so it must have happened here as well.  If I ever face that situation I would certainly advise my client not to go for it. 

Aug 03, 2010 02:25 AM
Matt Stigliano
Kimberly Howell Properties (210) 646-HOME - San Antonio, TX

Bill - I've had the call, but on the other side - someone calling looking for a buyer's agent and then as I dig deeper, it turns into them looking for a leasing agent.  It doesn't help that many homes are dual listed as rentals and sales and with so many people struggling with credit, I hear a lot of people asking about lease-to-own (something I never recommend to my clients) - thinking that they can just pay rent in lieu of a mortgage payment and that it works exactly the same.  The ballon payment that is attached to these deals often makes it impossible for the tenant/buyer to actually get back on their feet enough to make such a payment, which is why I find them to be so risky.

Aug 03, 2010 02:29 AM
Patty Purdue Laforte
Realtypath LLC - Salt Lake City, UT

One of the neighbors to one of my listings (which is also listed) just got an offer where the people are moving from overseas and need to be in the house in the next week.  I guess they originally asked that the sellers move out 3 days after the offer was made so they could move in before closing since school is starting soon.  I don't know who their agent is but they are working hard to get out of the home in the next week and move all their belongings into a storage unit and themselves into a relative's spare room.

I was flabergasted - who in their right mind would do this before closing!  Maybe these people aren't actually coming from overseas and if they are will they qualify for a mortgage their first week in the country with most likely a new employer?  What are the chances that this will all go through and they will close on the house as opposed to being renters who may not pay rent and then fight eviction leaving the sellers without the funds to purchase their next home.

I'll tell you what - if this doesn't all go through as planned, I would hate to be that agent.

Aug 03, 2010 02:31 AM
Larry Lawfer
YourStories Realty Group - Newton, MA
"I listen for a living." It's all about you.

This is a good post Bill, thank you.  I have a house for sale and was approached by a prospect, not represented by an agent, who asked me about lease to own.  I spoke to my seller who shared the story that they did that with their last house and were burned. The tenent came in and in 6 months trashed the house and disappeared with no closing.  This is a difficult situation and one where honest agents will be forthright. Asking more questions is always the right thing to do.  After a while you get a sense of people and if you don't feel honesty keep asking questions. The liar will always string themself up.

Aug 03, 2010 03:16 AM
BILL CHERRY
Bill Cherry, Realtor - Dallas, TX
Broker & Wealth Coach

Thanks to each of you for sharing.  It's jusdt so darned outrageous.

Aug 03, 2010 12:59 PM
Lynn911.com ~ Dallas Real Estate Agent Top Team
Dallas Houses for Rent Dallas Apartment Rentals Lynn911.com - Dallas, TX

Bill great post however I UNSEASONED agent for leasing for fact I handle MUCHO amount in leasing I refuse show any home UNLESS it on the market for lease OR lease purchase I don't have time to waste on homes on market strictly for sale. Dallas Apartment Locator, Lynn911.com, Dallas Aparment Finder, Dallas Apartments for Rent, Dallas Apartment Rentals

 

 

Aug 09, 2010 10:06 AM
BILL CHERRY
Bill Cherry, Realtor - Dallas, TX
Broker & Wealth Coach

Lynn, of course that's what you should do.  That's your market and your specialty.

On the other hand, it's not mine.  I stopped entertaining and encouraging cockamamie deals after I had spent zillions of hours helping the RTC disposed of all of the S&L junk they had in the Houston area.

For me today, a prospective buyer either has the money and financing in place or he doesn't.  If he doesn't, I pass him on to someone else to mess with. 

But in any case, if the listing information provided the public and agents says that the property is not for lease, I can't for the life of me understand why an agent would infer his client would be a buyer when in reality, he knew all he'd be (at best) was a renter.

Aug 10, 2010 01:11 AM