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Double Dipping and Doing the Right Thing!

Every agent in real estate occasionally is blessed to sell a home and get both sides of the deal, but what about the agent that does this all the time? There is something wrong with this. I'm sorry, but the longer I am in real estate the one thing that gets me crazy are unethical agents. Listing agents that double dip and push away better offers because they want to get both sides of the deal. It is sickening, self serving, unethical and may sometimes be illegal. I have had several run ins with other agents both personally and professionally that drive home their main intent. The listing agent pushes away other agents from a co-oping position so they can take the higher commission themselves. This does not mean the seller will net more money, it is just that the listing agents will make a higher commission.

Several years ago I wrote an offer on a home in a very hot real estate market and bested my own offer with a 25K competitive bid that would top other offers, and included a $2500 topper that would exceed the highest legitimate bid. My offer was rejected! (Thank you God!) Instead, the listing agent brought in a contingent offer with a higher bid price but based upon a contingent sale of the buyers home which he was also the listing agent. Guess what, the other home did not sell. If I fast forward this. The home finally closed months later for 50K less than I offered, but the listing agnet double dipped again. How odd!

More recently in Atlanta area I saw a great foreclosure in an old neighborhood of mine, and I really liked the price. It was a steal. The listing agent said do not show the home, I've gotten several offers, all of them can work out. Well, low and belold this is 5 months later and the home is still for sale, and now with an even lower price!

There was another agent that we used to deal with in Atlanta that was a steep discounter. We finally found out what her modus operandi was. When an agent would call to show the "Active" listing, the sellers would tell the agent that was calling to make an appointment that the home was under contract! It wasn't...they were keeping the activity up on the home so the agent could get both sides of the deal. It is worse than a variable rate commission, it is fraud. The one consolation is that the greedy homeowners were the biggest losers in equity! They tend to also make more mortgage payments, while they wait for the perfect fool to come buy. Price drop after price drop is also part of the game! The other part o the story is dual agency - and that has many of its own issues.

My question is "Do these agents even have a conscience?" "Are the sellers morons?"

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Posted by Jim Crawford ~ Atlanta Real Estate-ABR E-PRO on 11/11/2008 09:49 AM

Comments (36)

Listing Agents - Fraud, Ethics and Both Sides of the Deal! in the ActiveRain Channel

real estate ethics, fraud, dual agency, double dipping, both sides of the deal, listing agents, under contract, game playing, ethics, illegal

Originally posted at: Atlanta Real Estate | Atlanta Housing News for Real Estate: Double Dipping and Doing the Right Thing!

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36 Comments on Double Dipping and Doing the Right Thing!

NOV

2008

Hi Jim! What you are describing is ILLEGAL in the state of NC! Unfortunately there are many unethical agents out there doing this--one would think that with the limited buyers in the market, agents would be less greedy and encourage their Sellers to work out the FIRST Offer! Conversely, I guess that the market has pushed some to become MORE greedy and are poorly representing their Sellers.

We have a firm here in Charlotte that offers their agents an in-house bonus if they sell one of the firm's listings. This has been going on for quite sometime and they are avoiding penalty with a legal loophole. Many times their agents will phone last minute to see a home--obviously that their buyers in the car are asking to see because it wasn't on their list! In my opinion, this is steering but, they get a LARGE portion of the listings in Charlotte because they sell the Sellers on this in-house bonus! The rest of us are just waiting for someone to admit that they're practicing this so that we can put this very old, poorly respected firm out of business!

Debe in Charlotte

Debe Maxwell (Helen Adams Realty) Unfortuanatley most agents are new in the business and have no clue what is really taking place. What you desrcibed is a sad reflection on the times we live in.

Some listing agents become masters of manipulation. I have worked closely with several of them. Many sellers are susceptible to any number of listing agent manipulations. I have agents discourage my showings also, mostly because I actually use a qualified, expert home inspector.

Many firms offer in-house "bonuses".

I hate to say it, but our industry needs more regulation and oversight.

But, not from the government. We need a watchdog organization.

God bless the ethical!

Most brokerages are listing companies.
Agents are taught from real estate school to "list to live".
Agents don't give a fig about agency and few understand fiduciary.
Agents tell buyer and sellers that they will be "fair".
Shall I go on???

The only way this will be solved is separate licensure for listing and selling brokerages.

Unfortunately, not in my lifetime.

Richard Barbee (Realty Executives Assoc) I really would have assumed that is what NAR is for, but they really do not get involved unless someone catches the agent red handed.

Lenn Harley Homefinders.com MD & VA Real Estate Thanks Lenn. I totally agree with you. I just had the time to vent a long lasting resentment!

I have seen some such agents. We are supposed to have the office telephone number on signs and these agents just have their own telephone numbers and they are top agents by being unethical.

GITA BANTWAL, REALTOR BUCKS COUNTY, PA HOMES (ReMax Centre Realtors) There are many ways they can accomplish this. One is signs, advertising and Blind Branded Websites to do not list agents name or affiliations. Buyers can only contact them. In many states the brokers phone number and address have to be on all ads.

Jim,

I love this post and your question, "Do these agents even have a conscience?" "Are the sellers morons?"...To operate like this is an indication of AMORALITY...their consciences are SHUTDOWN, and they no longer can discern right from wrong!!! Thanks, Fran

Definitely unethical. I think we would have a hard time proving the agents intent, unless they show a pattern of constantly doing this.

Hi Jim, years ago before I had any idea what I was doing (and I may still not have a clue), I sold a house and the Realtor played lots of games that I was uncomfortable with so she could get both sides of the deal. I even found out after the deal that the buyers had made an offer on a different house and she failed to correspond with that Listing agent so it would fall through... and she could bring the buyers to my house... which she had listed.

In the years since, this is what I have learned.

1) The industry has some great people that do a great job for their clients and all others involved.

2) The number of entities involved in most transactions (agents, buyer, seller, closer, title, surveyor, appraiser, lender, termite bonds, inspections, etc) creates an environment that can protect the incompetent and/or the unethical. These folks can easily point the finger at all the others and the buyer or seller rarely understands enough to know what the truth is or what to do if they are unsure. These are also the people that create the air of distrust in the public, since people are more likely to share the story of the disaster than the story of the success.

Good post! G

Fran 'The Title Man' Gaspari Title Insurance-PA & NJ (Patriot Land Transfer, Inc.) Fran I guess their god is the 'dollar!"

John Walters (Specialized Real Estate) - No this is pre-meditated. This is as dirty as you can get. A couple we know listed with the agent. This was her listing strategy. She offered them a lower commission, but only if she got both sides!

Glenn Phillips (Management, Coach, Speaker) (RealSource) Perfect! "One bad apple can spoil hte barrel!" Most full time agents I know are hard working, very above board, and highly ethical. A lot of the newbies that come on the block do a lot of illegal tricks. These are the ones that make a fortune in the business and two years later they are being sued. Since I als coach and meet loads of agents, I am suprized how many are super hot and within a year or two their license has been revoked.

I think it is always best for seller and buyer to have their OWN representation. Unbelievable these agents you referred to would provide such a disservice to their sellers.

Colorado Springs Realty Patricia Beck (Prudential Professional Realtors, GRI) I agree with you. I can understand an occasional double dip every few years. It is not as common as some make it appear. Other than that, seperate representation seems very wise.

Jim, we have very little double dipping in these parts. There are some buyers who think that by working with the listing agent they'll get a better deal. And sometimes they do. I almost always refer buyers for one of my properties to a trusted colleague so they can be propertly represented. Around here, too many of them are lawyers.

Just as frustrating is the listing agent who tells their friends (other investing realtors) first about a drastic reduction in sales price before it hits the listing services. When I call on these properties they are usually already under contract and the listings are not updated as "under contract" for a week or two!

As with the double dipping agents who do so at the sellers expense, beware as I have contacted the Banks REO officers several times (sellers) to let them know what is going on. If I spend an hour chasing a house based upon some unethical agents listing, I will spend another 1/2 hours making sure it doesn't happen again!

Amazing how things just happen! this is very frustrating and it will catch up with them, just like the economy!

Hi Jim, I left a broker who, while on the ethics committee of our local RA, would say "let's do all we can to keep this one 'in house' " when any one of his agents would speak of a great new listing. Some companies also give their agents a couple day jump on new listings by anouncing them and keeping them out of the MLS as long as allowed. -Mark

Jim.... I agree that getting both side is a great thing. One must concider their clients and not themselves when in a multiple offer situation. Yes it is nice to get both sides, but at the same time.. Is this the best intest of your seller ? Did it cost them money ?

Patricia Kennedy (Evers & Company) We have double dipped a few times, but it s not the norm. Here it is not dual agency. It is just an uprepresented buyer.

NOV

2008

Jim,

Have you reported your suspicions to either you local or state board, or to your state agency that governs licensees?

Phil That is a really annoying thing. The status should change immediately. Most MLS boards have fines for the agents. Keep in mind that is the MLS entry not the Internet...that can vary with service provider.

Kathy Honeycutt Realtor/ Neighborhood Specialist (Dynamic Realty INC) It does catch up with them.

Mark A. Moore, ABR - Virginia Beach Real Estate (RE/MAX Alliance - REMAX) That is a sleezy as you can get. I know several agents that "pocket listings" place the sign in the ground for several weeks before entering them into the MLS. Just turn them in.

Roland Woodworth "Clarksville-Fort Campbell Area Realtor" (Exit Realty Clarksville) Under the law we have a fiduciary most of the time unless we are under some sort of transaction brokerage agreement, and even then this is wrong behavior.

Richard Weeks, REALTOR®, Broker Associate, GRI, ePRO, eAgent (Keller Williams Dallas City Center) First of all, it is very hard to prove something you, and no one else is party to. You are the virtual outsider looking in! My thoughts, word gets around through the real estate grapevine, and other agents stop showing, and start complaining.

There are many ethical realtors out there, but there are also enough ones like you describe to give us all a bad name.

There have been a few times where I wrote an offer on one of my own listings and then had to present that with offers from other agents. Only once did the offer I wrote get accepted, and only that one time was the offer I had written the best offer for the sellers. I like to think that everyone can present each offer honestly and fairly on merit, but I know that some Realtors in our area do not do this.

Jim, this confuses me. You wrote: "The one consolation is that the greedy homeowners were the biggest losers in equity! They tend to also make more mortgage payments, while they wait for the perfect fool to come buy. Price drop after price drop is also part of the game! The other part o the story is dual agency - and that has many of its own issues."

How do you know the homeowner even knows the listing agent is doing this? Why would a homeowner turn down a higher offer and take a contingency offer just to help the listing agent get a higher commission? Why would a homeowner list low to bring in traffic that is probably not going to offer any more than list price?

I would think that the listing agent isn't telling the homeowner any of this. These are horror stories and maybe I'm just to new to have run across this in my area. At least I hope that's the case.

Great post.

Brenda Carus (Re/Max Towne Square Realty) Like you said, there are always a a few that like to color outside the lines!

Heather Goodwin ~ Shreveport, Louisiana's REALTOR (Coldwell Banker J Wesley Dowling LLC) You may have missed something. On one of these items - the sellers listed with the agent because of a discounted commission. They just keep showing the homes as active, but tell the other agents calling "The home has just gone under contract!" There hope is that the agent gets a direct call from the buyers inquiring about the property. There als also other agents that do whatever they want.

Yes, I did misunderstand that part. I see now what the agent is trying to do. And I know there are unethical people willing to work with the unethical agents out there. Thanks for the clarification.

Heather Goodwin ~ Shreveport, Louisiana's REALTOR (Coldwell Banker J Wesley Dowling LLC) No problem! These folks stay up all hours of the night trying to figure out how to cheat the system. We should all at least understand what is happening.

NOV

2008

I think we learn who these agents are and avoid them. I hate contingency listings. I know of agents who put them on and never reveal there is one so that the rest of the agents are aware of it. That is also unethical. We really need to use our Professional Standards more and file grievances. Then they'd shape up.

Barbara S. Duncan ABR, CRS, GRI, e-PRO Searcy AR (RE/MAX Advantage) I agree. Avoiding trouble is human nature. I also think that even in trying times if you go to a broker with a grievance these days, most do not want to get involved.

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