How can you run a business like this and survive for the long term?

By
Real Estate Agent with Berkshire Hathaway HomeServices 01238708

As I did some research for one of my repeat client, I was faced with the question “How can you run a business like this and survive for the long term?”

www.endrebarath.com

Here’s a bit of background. My buyer is a disabled Afghanistan War Veteran, and many of you know that I have always been partial towards helping Veterans in any way that I can. When we originally worked together it took a great deal of effort to find him a home for a few reasons. Here in the greater Los Angeles area, most sellers would prefer to not sell their homes to a veteran, a primary reason being because VA loans are a bit more stringent than traditional loans and require sellers to fix things before transferring a Grant Deed. Nevertheless, after six months of searching and writing offers, one seller was indeed a true patriot and chose my client to be the buyer of his home.

www.endrebarath.com

Since that purchase, my client also inherited a Condominium from his parents that he uses as a rental income property. Just the other day, he reached out to me and said that he is ready to start the search to upgrade to a new home. He plans to refinance the two properties in order to then buy another home with a 20-25% down payment vs. a VA loan.

I digress as I sometimes do! So now the new search begins, and I found a property for my client. As is my routine practice, I pulled the public records, property history and did some background on the listing agents. This last step gives me some insight on who I may be dealing with and what to expect. I almost fell out of my chair as you may expect when you read these bullet points:

1. The property was sold this past December for $697,000.

2. The owner’s name is “Zillow Homes Property Trust”.

3. The property is listed for $702,200.00.

4. The commission to buyer’s agent is 2.25%.

5. In the Private Remarks to Agents: FHA offer will only be considered after 60 days.

6. Also in Private Remarks to Agents: Custom Zillow Purchase Agreement to be sent back as a counter or acceptance.

There were more, but I think you get the idea!

www.endrebarath.com

Looking at points 1 through 4, in December Seller paid closing costs. Now they will have to pay California Transfer Taxes, City and County Taxes, provide Title Insurance and again pay Escrow Closing Costs. If you do the numbers, this is not what I would consider a wise business decision. Am going wrong with this line of thinking?

Resale of existing homes has increased dramatically; there is virtually no inventory hence point 5, in my humble opinion, is clearly discriminatory to FHA buyers. I can’t even imagine any property staying on the market for 60 days or more if it is priced correctly. Hence, I consider this strategy discrimination to economically challenged buyers who can only put down 3.5%.

These private remarks had me running my fingers over the computer to research the listing Brokers and Agents. Are you ready for this? The listing Broker and the listing Agents have three sets of Complaints against them that are about seven or eight pages long. Reference as to how they have been listing and selling properties to the tune of about 22-25 properties all over California all while their license was suspended!

www.endrebarath.com

On a side note, why would a well-known seller list their property with a brokerage and agents like this in the first place? Oh, and I almost failed to mention that nowhere was it disclosed that the Seller is a licensed California Broker.

Back to my original question of how can they stay in business when this is how they are buying and selling properties? I imagine it is because the money came from investors, so they do not need to be concerned as to how they conduct business. After all, the leadership has lots of money and bought some ultra-luxury homes for themselves.

 

www.endrebarath.com

 

Wishing all who read this post a very productive week no matter what your business may be.

Wishing you a safe and healthy life and I look forward to your comments. If you are looking for a knowledgeable, focused and goal-oriented Realtor in the Beverly Hills area who will help you achieve your Real Estate goals, please reach out to me directly! If you are looking for a pet friendly Beverly Hills Realtor who can handle and sell the most difficult properties that no one else could, please reach out to me directly!! If you are considering buying or selling a home, a luxury home, luxury investment real estate, luxury vacation homes, or luxury beach properties in Southern California, Los Angeles, Century City, Westwood, West Hollywood, Beverly Hills, Marina Del Rey, Venice or Malibu, feel free to contact me at 310.486.1002 ( m) homes@endrebarath.com or visit one of my websites at https://www.endrebarath.com I contribute a portion of my commission to local animal rescue organizations. Endre Barath, Jr. Realtor at Berkshire Hathaway HomeServices California Properties DRE#01238708

Comments (44)

Endre Barath, Jr.
Berkshire Hathaway HomeServices - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

Lawrence "Larry" & Sheila Agranoff. Cell: 631-805-4400  yes we always learn something new...Endre

Jan 29, 2022 10:12 PM
Endre Barath, Jr.
Berkshire Hathaway HomeServices - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

Ron and Alexandra Seigel  sadly there are others... who are stepping in ... future post:)Endre

Jan 29, 2022 10:13 PM
Endre Barath, Jr.
Berkshire Hathaway HomeServices - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

Sheri Sperry - MCNE®  love your take away and thank you, Endre

Jan 29, 2022 10:14 PM
Endre Barath, Jr.
Berkshire Hathaway HomeServices - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

Patricia Feager, MBA, CRS, GRI,MRP  thank you for your comment sadly this is not Texas and the Z's of this world know it....Endre

Jan 29, 2022 10:15 PM
Endre Barath, Jr.
Berkshire Hathaway HomeServices - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

Anna Banana Kruchten CRS, Phoenix Broker  it breaks my heart to see that other parts of the country are operating the same way.... hope the buyers and sellers are reading and heading...Endre

Jan 29, 2022 10:17 PM
Endre Barath, Jr.
Berkshire Hathaway HomeServices - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

George Souto  you and I are on the same page, I have no problem shaving in the mirror and not have to hold my head down:)Endre

Jan 29, 2022 10:18 PM
Endre Barath, Jr.
Berkshire Hathaway HomeServices - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

Beth Atalay  how sad that is now three states, CA, AZ & FL confirmed...Endre

Jan 29, 2022 10:19 PM
Endre Barath, Jr.
Berkshire Hathaway HomeServices - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

Kathy Streib  thank you for the Feature and hope the word gets out, Endre

Jan 29, 2022 10:20 PM
Grant Schneider
Performance Development Strategies - Armonk, NY
Your Coach Helping You Create Successful Outcomes

Good morning Endre - excellent research on your part.  I wonder how many agents do this much research.  These times have brought out all the bad players.  Their day is coming.

Jan 30, 2022 05:38 AM
Buzz Mackintosh
Mackintosh REALTORS - Frederick, MD
“Experience, reliable, leadership”

Zestimates usually lead to disaster .....and the ~Z~ business model proves it! Recently had a Seller select an offer that was VA because the Buyers were military also.

Jan 30, 2022 06:24 AM
Dorie Dillard Austin TX
Coldwell Banker Realty ~ 512.750.6899 - Austin, TX
NW Austin ~ Canyon Creek and Spicewood/Balcones

Good morning Endre Barath, Jr. ,

I'm so glad that Kathy Streib featured your post in her "Ah-ha" moments for the week as I missed it. I have seen the same thing in Austin. They over paid in Austin last summer, don't present their properties well, are priced too high and languishing in one of the hottest markets in history!

Jan 30, 2022 07:12 AM
Hannah Williams
HomeStarr Realty - Philadelphia, PA
Expertise NE Philadelphia & Bucks 215-820-3376

Well Endre Barath, Jr.  there are red flags here all over the place to make you not want to show their listings aren't there.  Glad Kathy Streib featured this missed it 

Jan 30, 2022 07:59 AM
Wanda Kubat-Nerdin - Wanda Can!
Red Rock Real Estate Brokered by Real - St. George, UT
So Utah Residential, Referral & Relocation REALTOR

Amazing is the only you thing that comes to mind Endre and not in a good way!

Jan 30, 2022 10:38 AM
Carla Freund
Keller Williams Preferred Realty - Raleigh, NC
Carolina Life RealEstate & Relocation 919-602-8489

Verify and verify again! My biggest complaint is when listing agents don't list material facts. I've seen some in the past couple years where the home was purchased by an investor group. In that situation, the investor can choose to check no representation on the seller disclosure. However, the listing agent is responsible for material facts. It appears that either someone isn't doing their homework or they're choosing not to list material facts. 

Jan 30, 2022 10:45 AM
Jeff Dowler, CRS
eXp Realty of California, Inc. - Carlsbad, CA
The Southern California Relocation Dude

Hi Endre:

We are seeing a fair number of Zillow-owned listings here as well. I didn't check out the agents because the properties I saw were not something that would work for my buyers, but I will going forward. Best wishes in finding the right property for your Veteran!

Jeff

Jan 30, 2022 01:39 PM
Endre Barath, Jr.
Berkshire Hathaway HomeServices - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

Grant Schneider we are on the same page their day will come... hopefully sooner than later, Endre

Jan 30, 2022 10:33 PM
Endre Barath, Jr.
Berkshire Hathaway HomeServices - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

Buzz Mackintosh  loved your comment and here in LA the majority of the sellers could care less about Veterans... on a side note I do not even market myself that I am an Airborne Ranger Infantry Captain from a previous time:)Endre

Jan 30, 2022 10:35 PM
Buzz Mackintosh

Thank You for your service Endre Barath, Jr.!

Jan 31, 2022 04:22 AM
Endre Barath, Jr.
Berkshire Hathaway HomeServices - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

Dorie Dillard Austin TX  glad you found the post and liked it, Endre

Jan 30, 2022 11:22 PM
Debe Maxwell, CRS
www.iCharlotteHomes.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310 - Charlotte, NC
The right Charlotte REALTOR!

I have been slaying this untruth for so long, Endre (about VA loans/inspections)! In fact, my last Closing (Friday) was  veteran. Both the seller and the buyer were veterans and I made a point when presenting the Offer, to plea the case that VA inspections and loans are FAR more likely to go through than conventional loans...

Thankfully, we won the bidding war and celebrated an exciting new home for these amazing buyers. I have so much respect for our veterans and believe that EVERYONE should as well.

Surprise about the previous listing agreements affiliation too - NOT. Not a very savvy business in MHO. 

Feb 01, 2022 10:15 PM
Rocky Dickerson
Realty One Group - Las Vegas, NV
Superior Service!

I knew to expect the very worst as soon as you said Zillow

Feb 07, 2022 11:53 AM