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If You Have to Justify It, Then Don't Do It

By
Real Estate Agent with Cummings & Co. Realtors

I recently received a referral from my website. I love getting referrals from other agents, because it shows that they understand the time it takes for me to blog consistently, know my market area, and work hard to get the job done. Agents tend to know when other agents are "for real" or if they just look or sound good on paper.

This one seemed to be fairly cut & dry until I spoke with the seller, a friend of the people referring him to me.

First, the seller only wanted to list for 90 days. He also wanted to price the property "a little high" but wanted to "sell it quickly". I told him, having sold one in a better location 2 streets over from his just three weeks ago, that those were two very different strategies. That, and only allowing 90 days for me to sell a property where the average days on the market is well over 200, plus pricing it out of the market, made it a lose-lose situation for both of us.

Did I mention this is most likely a short sale situation?

The husband of the agent who called me originally to set up the referral for his wife (it sounds like they work in tandem, though he is not a licensed agent), was out of town, but I wanted to get back to him quickly, so I emailed him to let him know that I could not accept this particular referral, but I appreciated the consideration.

When he called back, I come to understand that there is a secondary story, one involving him possibly wanting to buy the property, and that the high price was his idea -- because he didn't want there to be much activity up front while he submitted his offer to the bank. Um, WHAT?

So you, Mr. Referrer, know the seller personally, have interest in a company that is attempting to negotiate the short sale, want to put in an offer on the property, and have the house listed high at your recommendation so as not to have much activity while your offer is at the bank and waiting for the BPO, and your wife would get a referral fee on both the buying and selling side?

Alarm bells went off in my head, and after discussing with my Broker, it is not worth the possible liability involved.

Have you had a situation like this?

Would you have taken the listing?

I am curious as to others' thoughts on this situation. I just felt there was too much involvement on the one side, and it just didn't feel right to me.

Joetta Fort
The DiGiorgio Group - Arvada, CO
Independent Broker, Homes Denver to Boulder

Short sale acceptance terms include that the listing agent AND the buyer are arm's length. These agents manipulating the situation to serve themselves, and then I suppose they'd certify it was arm's length, that does sound like fraud to me.

Aug 24, 2010 01:46 PM
Marney Kirk
Cummings & Co. Realtors - Towson, MD
Towson, Maryland Real Estate

Thanks, Julia, that is how I felt as well. If he didn't want to buy it & use his company to negotiate, that would be a different story...

Aug 24, 2010 02:02 PM
Marney Kirk
Cummings & Co. Realtors - Towson, MD
Towson, Maryland Real Estate

Thank you, Richard! It sure FELT "WHACKED"!!!!

Aug 24, 2010 02:03 PM
Marney Kirk
Cummings & Co. Realtors - Towson, MD
Towson, Maryland Real Estate

Thanks, Marcia, that is how I felt!

Joetta, though they know each other, it still could be "arm's length", from how I interpret it. What I don't like is that it felt like this was NOT in the best interest of the seller or the bank, because if listed at the correct price originally, more activity could POSSIBLY (and I say that because it is really hit or miss in this neighborhood) get more for the house than the possible offer at hand. No matter what, my gut said no. I ALWAYS want everything to be ABOVE BOARD. This didn't seem that way. That means I am OUT.

Aug 24, 2010 02:07 PM
Debbie Atwood
Century 21 Real Estate Center Everett, WA - Everett, WA
Real Estate Broker

I think you used good judgment on this one!

Aug 25, 2010 04:40 AM
Connie Harvey
Pilkerton Realtors - Brentwood, TN
Realtor - Nashville TN Real Estate

Marney, You did the right thing. This kind of behavior is what gets us into big trouble.

Aug 25, 2010 08:36 AM
Marney Kirk
Cummings & Co. Realtors - Towson, MD
Towson, Maryland Real Estate

Thanks, Debbie. I felt I did, but wondered if others felt I was overreacting! (Not that it would change my decision, just out of curiosity!)

Aug 26, 2010 02:47 AM
Marney Kirk
Cummings & Co. Realtors - Towson, MD
Towson, Maryland Real Estate

Connie, it just didn't feel right. Even if technically everything were "ok", my gut told me NO WAY. Thanks!

Aug 26, 2010 02:48 AM
Coleen DeGroff
Coldwell Banker M.M. Parrish Realtors - Gainesville, FL
Haile Plantation Real Estate - Gainesville FL

Marney - Holy mackerel. I have had a couple of referral experiences lately that I have turned down....one was a gentleman who collects FSBO's apparently but is not an agent....said if I could find a buyer for a property that he was not the agent for, buyer would pay a finders fee and this dude would pay me.

 

Um....what?

 

I called my broker because my hair hurt trying to figure out what exactly this guy was getting at.  His take was the guy was trying to do something that was a lot more common when FL boasted a hot market....that this guy put an offer (a crappy offer) on a FSBO, and was looking for someone to buy out his interest before it went to closing so he would make gobs of money at the expense of the seller before he had to put out a penny.

 

Ew.

No.

 

Then there was this other dude who was trying to find someone to list a FL condo as a short sale for a friend, but from the sound of it there was no hardship per se....just an investor who lost money and wanted out.

 

Ew.

No.

 

I love the title of your blog post: If you have to justify it, then don't do it.   My new rule of thumb is if it's too confusing to understand, don't do it.

 

 

Aug 26, 2010 05:05 AM
Ellen Caruso
Daniel Gale Sotheby's International Realty - Glen Head, NY

Thats a shady mixed up deal and glad you stayed away. If that's what you did know, imagine what he was hiding.

Aug 28, 2010 01:43 AM
Jennifer Prestwich
Henderson, Thornton, Broomfield and Westminster - Henderson, CO
Madison & Co Properties

No and NO!! Don't touch it!  It sounds entirely too fraught with danger.  You are smart for walking away.

Aug 28, 2010 10:58 AM
Marney Kirk
Cummings & Co. Realtors - Towson, MD
Towson, Maryland Real Estate

Wow, Coleen, crazy!!!! It makes me feel better that I'm not alone with this weird stuff!

Aug 29, 2010 01:55 AM
Marney Kirk
Cummings & Co. Realtors - Towson, MD
Towson, Maryland Real Estate

Ellen, good point. Who knows what else was going on behind the scenes!

Aug 29, 2010 01:56 AM
Marney Kirk
Cummings & Co. Realtors - Towson, MD
Towson, Maryland Real Estate

Thanks, Jennifer!

Aug 29, 2010 01:57 AM
J. Philip Faranda
Howard Hanna Rand Realty - Yorktown Heights, NY
Associate Broker / Office Manager

Marney, I wouldn't take that listing. You did the right thing to decline it. 

Sep 07, 2010 04:25 PM
Lynn911.com ~ Dallas Real Estate Agent Top Team
Dallas Houses for Rent Dallas Apartment Rentals Lynn911.com - Dallas, TX

Marney - Girl love the background here Labor Day is done football season is here ! You are sooo true on your blog title

Have a fab...u...lous week ! Dallas Houses for rent, Dallas Apartment finder, Lynn911, Dallas Luxury Apartments For Rent Dallas Homes for Rent

Sep 13, 2010 04:09 AM
Marney Kirk
Cummings & Co. Realtors - Towson, MD
Towson, Maryland Real Estate

Thanks, Philip. That's how I felt!

Lynn, you crack me up! Thank you!

Sep 14, 2010 12:08 AM
Jeff Belonger
Social Media - Infinity Home Mortgage Company, Inc - Cherry Hill, NJ
The FHA Expert - FHA Loans - FHA mortgages - USDA loans - VA Loans

Marney.. hey stranger, long time...  In any case, people still trying to get over on others to earn more money.  I am not a realtor, but from reading this and from what others stated, it was good to walk away from this...

jeff belonger

Oct 20, 2010 05:01 AM
Renée Donohue~Home Photography
Savvy Home Pix - Allegan, MI
Western Michigan Real Estate Photographer

Had situations similar to this yes, took the listing no.  I don't take short sale listings ever any more :)

I see these often with a BPO.  It doesn't take a brain surgeon to figure it out.  I am saying this for anyone who may read this and consider doing it.  Not just interior BPOs are ordered - many are exterior BPOs where no one even knows who the whistleblower of an overpriced short sale that is double ended (I consider double ended under the same roof!)  Oh, and only on the market for one day.

:grin:

Oct 26, 2010 09:13 AM
Todd Clark - Retired
eXp Realty LLC - Tigard, OR
Principle Broker Oregon

Stick with your original idea, walk away, heck run away and run away fast!

Nov 24, 2010 07:23 PM