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Real Estate License for Sale!

"We need an agent who can think outside of the box," the voice on the other end of the phone tells me. This sounds good at first. I love helping my clients get deals done by being creative. However, I soon discover that these are code words for, "We need an agent to help us with an underhanded deal (or two or three)."

Really! When did my real estate license go up for sale?!! Especially to the lowest common denominator. As a professional would it even make sense to risk my entire livelihood for a quick couple thousand dollars? Not in my opinion. Unlike the media portrayal of real estate agents, I am finding that I am very busy. A lot of people still need real estate agents, especially those who are actually able to make things happen as opposed to sitting around hoping for a windfall deal.

It seems that today's real estate market has bred not only a crop of competent, very professional agents, but has also produced alonside them a batch of scam artists looking to take advantage of not only the public but the banks (which hurts the public in the long run). Being on the Internet, I get many calls from folks who need my help, but I'm also a magnet for the unscrupulous types who want to use my license to legitimize their shady operations. Quite frankly, a jail cell is the box that I'm trying to think outside of here.

RED FLAGS

Here are some Red Flags that tip me off to the fact that I am being asked to compromise my license (and that of my Broker) in order for someone else to make a quick buck.

1) The seller is not aware of what is going on. This should be kind of obvious, but many companies who specialize in helping people out of foreclosure basically do all the work for the seller and have them sign things as necessary. Some people are so overwhelmed by the financial difficulties they are experiencing that they will grasp at any straw to get them out of their situation. I won't be involved with any transaction where everything is not disclosed in writing and the seller is not made aware of the possible tax or legal ramifications of what they are doing.

2) The bank has approved everything but they need an agent to "get the commissions out" - True story, folks. If the bank has already approved a deal, then they have addressed whether or not commissions will be paid, how much and to whom. If commissions are still up in the air, then the bank probably hasn't approved the deal. And if they have, why would the parties involved want to bring someone else in to take a chunk of their payoffs? Common sense here, folks...

3) The identity of the end buyer is concealed - Otherwise known as a double closing, this is illegal in many places. Everything is required to be on the HUD (Settlement Statement) at closing. Now there are legitimate companies whose goal is to purchase low and sell to another end buyer, but if they are legitimate they reveal that not only in the HUD, but in disclosure statements and possibly even in the contract that the seller signs and the bank sees.

4) Everytime you ask a question, things get more convoluted - If I ask questions and the more I ask the more questions I have, a red flag goes up. Granted, on some complicated deals it takes some time to get all the facts straight, but the person trying to talk me into working with him had better have a handle on what is going on and be able to explain it to me. Stammering and round-about answers don't go over well with me.

These are just a few that I've thought of. Feel free to add your own red flags in the comments below. I think I'll keep my real estate license for now. Being a single parent, I could really use the income it helps me produce!

Posted by Robin Willis, Tucson's Expert Agent, Realty Executives on 11/19/2008 05:01 PM

Comments (43)

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43 Comments on Real Estate License for Sale!

NOV

2008

People sometimes think, and other Realtors sometimes show them how desperate they are. I even had a client bring me in bogus bank statements and reported it to the Realtor who simple said, Oh well, how is that my problem?

Run for the hills desert. But it sounds like you have already figured out that it's obviously a shady situation.

I don't like the person who calls and wants my professional opinion on fair pricing and how to make an offer when they want to use a relative to do the deal. The relative isn't experienced yet. People will ask all kinds of crazy things. That's where our good judgement comes into play as well as our ethics.

Robin. This is a wonderful post. I'm flagging it.

One thing for sure, when things get tough, the snakes come out from under their rocks. That wasn't fair to snakes.

I have to laugh when they call me for "opportunities". It amazes me how they can talk around things without ever saying anything.

They promise the benefits of their investments, but never talk about what it is.

It is not hard to get sucked into a bad deal by some of these smooth talking investors. Early on, I had a couple that seemed OK at first, but then the terms and secret parties and two closings made me say to myself, "Be very afraid" and I disappeared. Good for you also!

Fortunately you saw the red flags immediately. What happens to an inexperienced agent who doesn't figure it out until it's too late.

Great post.

Take care.

Good post. I had this happen on my personal house, but did catch it in time. There will

be alot more of this coming, with the credit world in a mess.

Great Post. I had something like that happen to me when I was new. My broker help me stay out of a mess.

Edward

Robin,

I agree. Outside the box very often means outside the rules. :)

Steve

Bravo! Excellent post! I once heard of a seller that told his agent that he was going to have a friend call the agent and write a contract on his house. His friend didn't really want to buy his house, but that it would keep him from going into foreclosure. He had a round or two with his realtor who set him straight.

Janie

Great post - congrats on the feature! It's amazing what people will ask you to do!

Hi Robin

We can't put a price on our integrity, when things don't feel right there not move on and say goodbye to the customer.

Good luck and success

Lou Ludwig

I've seen those ads over the years--typically, one can sort out the good from the bad.

Red flags for sure -- nothing is worth losing your license over. All the best.

Great post! When I was a newer agent, I had a few shifty "investors" approach me and even though I met with them one time (to hear them out), I knew we were treading in dangerous water. Even if you have several years under your belt, you always have to be on your toes.

Thanks for this post and all should take time to read it. When in doubt disclose, disclose, disclose is my answer.

Your Financial Coach - I agree. A lot of people seem to think we're all desperate these days. They also don't seem to realize that we share the liability if they do un-ethical or fraudulent things, like your client with the bogus bank statements.

Allen Tate - That's just downright unfair. Reminds me of a blog I read recently by a bank lawyer who was fed up with people emailing him or commenting on his blog asking for free legal advice.

Lenn Harley - Thanks for the flag. I'll use it to crush the next snake I come across.

Cindy Lieterman - I too am concerned about the newbie agents. That's one reason why I posted the red flags. It's easy to see the $$ and not realize everything that is involved until it is too late. Hopefully, they have a good broker like Edward Wadsworth did.

Lou Ludwig - I agree. If I get desperate enough to feel that I have to sacrifice my integrity, I'll be looking for a new career field.

Kerry Lucasse - Giving them a chance is a good thing so you're sure you have all the facts, but if the facts don't add up, give 'em the boot!

No matter the market there are always folks doing the "dirty deals" and this is a classic example.

Great post, it is a tough time to be in business but there is no prize for quiting! Im here for the long haul.

Thanks for this post. THis is very informative

Thanks

Don

If you want to practice selling 6 by 8 cells with no windows it is a great partnership to get into business with these kind of people, they will be around in all markets just need to sniff them out

I am like you. I am running as fast as possible away from people like that. Hang that phone up

If it sounds like a great deal........it probably isn't! I never realized the real estate industry had so much dishonesty until I got into it.

Robin, you're right on the money. Unfortunately, there is no shortage of agents either desperate enough, irgnorant enough, or just plain crooked enough to get right in on these deals. We had a multi-multi-million-dollar producer here (one of the largest in our market) who got in on a scam a couple of years ago which bought her a nice orange jumpsuit and a stint in the federal pokie. I bet she's now questioning whether it was really smart to risk her million-dollar-income for a few extra thousand.

The very first deal that I did had the other agent trying to get me to commit fraud. She didn't even know that what she was doing was wrong... so much for experience. It was obvious... Exchanging money that the lender doesn't know about is obviously not right. That was all I needed to know.

In WA state we have a new law that's called " Distressed Home Owner Consultatn". Its to protect the public from scam artist like that.

You did the right thing!!! Great post!!

Kudos to you, Robin, for doing the right thing. I think that we all know what the right thing is and running far and fast from predators wanting to put our licenses in jeopardy is the first step to doing the right thing. Next step, and this one's harder, would be to report the parties who approached you with their scam. The law applies to all people, not just those with licenses. Most fines start at $10,000 and prison time. Not jail; prison. Felony. No more voting. No more cheating people.

HI ROBIN!

I sure appreciate the warning signs! Unfortunately, you don't always know until the situation arises. But with your red flags, it's a heads up! Thanks again...

Hi Robin,

I totally agree with you. I've had several "clients" call and ask me to be part of things that make the hair on the back of my neck stand up. 'We just need your professional opinions and guidance, then you will make a lot of money!' Always run away fast!

Lynn

NOV

2008

I cannot believe how people can do things like this ....it will catch up with them for sure.

These kinds of scenarios are exactly what got us into the current financial mess in the first place.

This is a good warning and I appreciate the red flag. I will look a little closer now.

Nice article & commentary. There are always going to be people looking for "the easy way out", or so they think. It is never worth it! On the same note, I am constantly amazed with our economy & market how many new things we have to be aware of and prepared for...there are many opportunities for success but just as many opportunities to find yourself in the middle of a lawsuit. I think knowing your information & contracts is more important than ever, as is deferring to your broker and making them earn their share of your commission with sound advice! I enjoy the fact that we have such a good forum for those interested in the utmost professionalism to share ideas.

It is unfortunate that these investors target inexperianced agents most of the time. I almost fell for this a couple years ago myself. Learning by your mistakes is one lesson you never forget.

You hit the nail on the head. For the last few years we would get phone calls, and if we asked any real questions they would hang up. That is also a sign. "No questions asked!" We need a Patsy!

That is a real good list of very ugly ways to take advantage of a buyer or to step into real estate transaction without earning it. The truth comes out in the end, and one will have a short career if you practice any of these techniques.

What's even crazier is that there are people out there that have no idea they are being scammed. They're like sheep. With the news, internet, and scandals, some folks are just bumping along.

Andrew Chong

www.andrewchonghomes.com

I have said before, if people put as much time & effort into doing a deal right way as they do the wrong, they porbably could have worked something out, legitimately! Good Post!

Wow, interesting stuff, Robin. I was just reading another post about a similar thing. People are really trying everything these days to get a deal together.

I am not in your business, but cant believe what some people will do. I guess I was brought up a lot better by my parents.

Great information here Robin, I can't tell you how many people I have either had to educate, or show the door, generally I just tell them that I can't participate in a transaction like that because it violates the code of ethics. This often elicits a question and gives you a chance to correctly educate someone who may have been misled by a not so scrupulous (or ethical) party, I find that most people want to steer clear of something of this nature, but need someone to tell them that it isn't quite on the level.

Now if you're dealing with "investor" groups with "special programs" well, more often than not these folks know they are doing wrong, but are choosing to do so anyway.

First you see those little signs on the street corner..."I buy houses..."

I wonder why that sign law isn't being enforced...the one that makes me pick up my open house sign before monday morning or I get fined...???

Then you get the call from that enthusiastic investor...I need an agent quick, my other agent is overwhelmed with all my investing...

Must not be talking about Colorado Springs...NO ONE I KNOW is overwhelmed with too much work!!

Then you remember...oh yah, that crazy free real estate seminar at the hotel was last week...

I ask:"How much did you pay for the tapes and books?"

They hang up every time.

Calling these sort of 'clients' the lowest common denominator cracked me up!

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