Though some of the nation may be recovering on the foreclosure front, Riverside CA, like much of the rest of the nation, is far from normal. There are still neighborhoods in which vacant properties outnumber the occupied. There is a huge shadow inventory and REO agents still dominate the landscape. It is this REO dominance of the market that has caused major issues for buyers and buyer's agents.
In our office we have several REO agents, ourselves included, who play nice and are respectful to others, but that is apparently not the rule of thumb. Who died and crowned REO agents, who had little business four years ago, kings and queens of Realtordom? Like "IT" kids in high school, treating everyone badly to make themselves feel important, who told them they could disrespect the rest of us by doing whatever they darn well please?
In our market, buyers are hiding under every bush, but there is precious little inventory available. Standard re-sales make up 30% of the market. Everything else is either REO or short sale. There are 10-15 offers on every available decent property. There are even more offers on lower priced properties that should probably be leveled in the interest of public safety. Buyer's and their agents are having a tough time while listing agents, particularly REO agents, are making up rules as they go along, regardless of NAR, or any other code of ethics.
Many listing agents are making decisions as though they are a seller rather than just the agent. They make up processes, paperwork and procedures that have nothing to do with conventional protocol, protecting the seller, or making properties sellable. In fact, much of what some listing agents do detracts from showings and encourages dual agency transactions. If we elect not to do business with them because they are being rude, it is potential antitrust and a disservice to our client, who very much wants THAT home.
The final straw for me was an REO agent insisting that the buyer make the good faith check payable to my brokerage. This violates our brokerage policies. In our company, checks are made payable to escrow, not the brokerage. Checks payable to the brokerage can be used by unscrupulous agents to make unapproved offers on other properties or worse, substantially increasing risk exposure for the brokerage. I've been around a while and have seen just that.
Unfortunately, if we disallow our agent from doing this, he cannot submit his offer. As broker of record, I'm not very happy about someone else dictating my policies for me, just so my agent can make an offer.
Good REALTORS® should not be facing this conundrum. There are many good, ethical REO agents out there, but there are also many who are not. REO management companies and lenders often choose agents for political or social reasons rather than morality, experience or knowledge. That leaves many buyer agents fodder for the wolves. As an REO agent myself, I appreciate decent, well written, legible offers. I understand the angst of dealing with buyer agents who have no understanding of the contract and I don't have the time to train them either . . . but I'm still nice about it. We all had to start somewhere.
If we REALTORS® don't put a stop to bad behavior, someone else will. Regulatory agencies are looking for someone to blame and real estate professionals are in the cross-hairs. If we don't self regulate, we guarantee eventual heavy-handed intervention from the outside. If we don't eliminate ridiculously imposed requirements, the courts eventually will force us to do so. If we continue to allow self-serving dual agency, authorities will eventually step in and make draconian decisions for us about how agents can and cannot do business.
I'm usually pretty smart, but I don't have good answers for this one. What do you think?
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