Many agents believe that REALTORS are really held to higher standards. Let us put this theory to the test.
So, here is the story… To be exact, below are two stories.
Story #1
I received the email from a Board member of one of the condo-hotels. He received the contract for sale and purchase for approval concerning a unit in the condo-hotel, and he is supposed to approve the buyer.
What’s the big deal?
The big deal is that the unit, which was sold about a year ago for, let’s say, $50K is now being sold for nearly 3 times more.
Did the prices go up this much in one year?
No. The prices went up, but nowhere near that dramatically…
I checked local MLS, no listing. I am being told that the listing is in Orlando Regional MLS, not where the property is, i.e. Daytona Beach. However, the listing agent is local.
The Buyer does not have an agent. What shocks here is the contract price. There are several units for sale in this condo-hotel, and you can get a double unit for nearly half of this price.
Of course, we can argue about the values, but my sixth sense is telling me that the Buyer is clueless about the values, and the Listing agent is exploiting the Buyer’s naiveté.
COE, as far as I remember, would prohibit any REALTOR to turn to the Buyer and ask whether the Buyer understands that s/he is agreeing to pay way over double for the property.
Whom do you think COE is protecting in this scenario?
Story # 2
A few days ago, the listing of a residential condo popped on MLS for …$57K. There is one listing in the complex now and it is for $123,900. Two units are under contract and the asking price on those was about $125K.
This condo is a shell, quite some work has to be done, but the price is ridiculously low. My guess is that it could have been sold for about $85K. We are talking about close to $30K loss to the Seller.
I contacted one of the investors, sent the offer, no answer. Next day the agent called me back. The unit was already under contract, it was gone. The agent was completely overwhelmed. She got about 25 cash offers, her fax was working non-stop, she was not able to answer the phone, her email exploded…
She feels happy. She put the property under contract in one day. She, probably, would be bragging to Sellers at her listing appointments how she sold a condo in one day…
Does she understand, that she screwed the Seller big time?
I doubt it.
Some thoughts
If it were up to me, I would, at least in Florida, make the following rule: if only the Seller is represented, then the agent/broker automatically transitions to transaction broker.
I know that many people cringe at the idea of one agent working with both the Seller and the Buyer. But it is not the problem. The problem is when one side is represented and the other is not, it is how you do things. A transaction broker would have to be equally fair to both parties:
“The State of Florida makes it clear that any Transaction Broker must provide a limited form of representation to both parties in a real estate transaction.
This limited representation includes:
Dealing honestly and fairly
Accounting for all funds
Using skill, care, and diligence in a transaction
Disclosing facts known about the property that might affect the value of the property
Presenting all offers and counteroffers in a timely manner
Limited confidentially – unless waived by a party.” (See here)
In cases like these, COE protects the agents and allows the public to get screwed.
Ethically screwed…
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Image by Christopher Michel via Flickr.com/creativecommons
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