Over the weekend a buyer called to see a property. The dance starts…
Can you show it to me now?
Well, ahhh, I’m on my way to my next appointment.
Oh, well, I have all day.
Oh, well, I don’t.
How did you determine that this is a property of interest for you?
I looked on the internet. I have about a dozen sitting in front of me.
Okay. Have you engaged the services of a realtor advocate? (I like that. Realtor advocate.)
Oh, yeah. I have lots of friends who are realtors. (Duh. Wrong answer.)
Perhaps you should call one of your friends to show you the house.
Well, can’t you show it to me?
Let me tell you how I work. I would like to meet with you for an hour or so to find out what your criteria is. I will research the properties available to determine which homes fit your needs. Then I’ll contact you to show you the selected homes for your consideration. Does that sound like something you’d be interested in?
No. I just want to see that house. (And the twelve others.)
I suggest you call one of your friends.
Well, I didn’t want to bother them. I was just doing my own research. (Huh?)
How about this one…
Can you show me this house?
How did you find it?
On the internet.
Okay. If you’d like to come into the office, I’d be happy to meet with you briefly to discuss your home buying plans.
No. I just want to see this house. (Stranger danger?)
I see. Have you spoken to a lender about getting pre-approved? You’ll –
I have the money.
Well, you’ll need the documentation to provide to the seller when an offer is written.
My sister will get that for me.
Oh, is your sister a mortgage broker?
Yeah, she’s my realtor too, but she lives far away. (Huh?)
You’ll be writing an offer with your sister, correct?
Yeah.
Then your sister will have to show you the house.
Oh.
Or this one…
Blah, blah, blah
But my realtor’s on vacation. Can’t you show it to me?
This one falls into this category and the one I haven’t written yet, “What the hell are they teaching in those buy a foreclosure classes?”
Where can I get a blank contract to write on a house?
A blank contract? What are you going to do with a blank contract?
Well, I want to write an offer on a house.
Okay. You want to do it yourself?
Yeah.
Well, the contracts we use are for licensed realtors. I’m not sure where you can get one. What house are you going to write an offer on?
I’m not sure yet.
What do you mean?
Well, I went to this foreclosure class and they told us all we have to do is write the contract and find the house. We write the offer and we’re done. We’re out of it.
That’s not the way foreclosures work in California. You have to have the cash and pay upfront and the county’s auction.
No, that’s not what they said. See, we find the house and write an offer with an assignee as the purchaser. Then we sell it to an investor.
Sell what to an investor?
The house. The contract.
How are you going to find an investor?
They’re out there.
Why would an investor buy from you?
Because I found the house.
How do you get paid?
By the investor.
How?
Well, they said that Allan Michael bought 5 houses at one time. He went to San Francisco and bought them with $100 in his pocket.
I see. Good luck with that.
Hi Vicki,
Your writing always puts a smile on my face, and this was no exception. I was contacted last week by a 19 year old wanna be real estate mogul and the conversation was identical to your third scenario.
I amazed that foreclosure classes haven’t come under the scrutiny of DOJ, or even more scary, the Bloodhound.
Excellent stuff!
I’m amazed at the cojones of some people- you summed up the “I didn’t want to BOTHER my Realtor” scenario as well as “I took a class” scenario quite well.
There are a lot of people out there selling “kits” and “seminars” that don’t have a clue but read a book, regurgitated it and sent people on their way with false confidence. What a scam.
GREAT ARTICLE, Vicki!!! I love reading your work!!!
Thanks Kevin. It’s nice to know I’m entertaining more than myself and Lani.
Love ya, Lani.
I’ve gotten some nasty phone calls from the REALTORS who weren’t to be bothered after they found out what I said to their “client” on that issue.
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Yeah I’ve had these calls too. They can get really hissy if you don’t suddenly drop everything and run them through the house exactly when they want to see it.
Aparrently asking if the home is in their price range is taboo… :-/
[...] Moore… HUH? Required [...]
Since I started my real estate career by taking one of those “classes” and then going on to take MORE of those “classes”, I find it amusing when someone calls me with the script you list above. I knew going into the classes that it wasn’t that easy, but learned a ton about the foreclosure process. Luckily the classes I took suggested you find a good REALTOR that can feed good houses to you! I decided it was easier to find the houses as my own licensee than to figure out how to make a “finder’s fee” legal!
My favorite line: “The seller requires that I only show this property to pre-qualified buyers.”
To paraphrase Russell Shaw: play golf or show to unqualified buyers- They both pay the same.
Actually if you’re willing to put $10 on the line for making that next putt…
…golf can actually pay more.
Sounds like sour grapes from someone who is experiencing disintermediation. Deal with it. Adapt. Quit whining.
Oh dear Jon. This is my forum to express what I choose. If you don’t like what I say, which is the truth, change the channel.
Hi Vicki!
You don’t know me, but I’d like you to come alone to a vacant house simply because I’m calling you up and asking you to!
I have a lot of money, and really am very interested in the house!
Please wear a mini-skirt!
Yours,
Americas Most Wanted #24
Since I am just a “house show-er” and there is no value to my life, my opinion, my professional experience, I will gladly drop everything I’m doing to run out to show a man I’ve never met a vacant house out in the middle of nowhere. See you there!
Any btw I always wear mini-skirts, low-cut blouses and lots of perfume. I get more business that way.
>>I always wear mini-skirts, low-cut blouses and lots of perfume.
/ears perk
Vicki,
Let me summarize the truth that I believe you are proposing, based on your post:
‘Free agent’ buyers who want to manage their own home search, and therefore are not willing to be tied to one agent are all unreliable browsers who probably are not serious qualified buyers anyway. They should be ignored and made fun of.
Did I get it right?
How about this truth as an alternative…. ‘Free agent’ buyers are an increasing trend. The real estate industry should be proactive and come up with a creative solution to help these folks become successful in their home search. The alternative is that the industry will become increasingly irrelevant.
R, Jon
Hey Athol – You think this is a coincidence?
hi I’M interested in viewing this property. how about saturday afternoon on 11/3/07 at 2:30pm thanks
‘Free agent’ buyers who want to manage their own home search, and therefore are not willing to be tied to one agent are all unreliable browsers who probably are not serious qualified buyers anyway. They should be ignored and made fun of.
My position is that free agent buyers need to be educated. I am astounded at the lack of consideration by people who call, reach me on my cell phone and expect that I’m going to stop what I’m doing to run out to a house to show someone I don’t know a property. I think that’s funny. I get paid – and therefore can feed myself – let’s get to reality here – when I sell a house.
I am speaking to those peers of mine who are working 10 hour days – as am I – just to make a living. Dealing with the public is sometimes a joke. I find humor in a lot of things.
The value I bring to a transaction has nothing to do with opening the front door and saying: here’s the kitchen. I am a professional negotiator. As part of my job I am a marriage counselor, friend and emotional support. I do the warm and fuzzy part of walking someone through what is oftentimes the scariest process in their lives. I also kick the ass of the opposing side when necessary.
If people find no value in that, then it is my right and obligation to myself and the business I run to redirect them away from me.
I don’t argue your point that the industry needs to be proactive about the free agent buyer. I am one person doing my part. And enjoying my life in the process.
Speaking as a ‘free agent’ buyer myself (now there’s a shock, eh?) it seems to me that your assertion that we all need to be educated is a very broad generalization. My manners and consideration for other people’s time is not at all tied to my decision to manage my own home search.
You mentioned that you are doing your part to help free agent buyers become successful in their search, but I didn’t see a specific example.
R, Jon
I do believe that unless you’ve been in this business or been involved in multiple transactions you do need to be educated. I need to be educated. That’s why I regularly take continuing education. If you ever think you know it all you’re wrong.
I’m not talking about your manners. I’m not talking about you at all.
I wasn’t asked to give an example. But since you seemingly have asked. I answer questions that are asked. I try to help, although oftentimes people think they know it all and don’t want to hear it. I write a blog and website containing many pieces of valuable information for free – information that cost me time and money to obtain, evaluate and write. I also teach first time buyer classes.
If you have the time, energy and knowledge to do your own work, more power to you. All I’m saying is know what you’re doing. It’s obvious that those people I quoted don’t.
I believe that unless you connect with a reputable, honest, professional you’re going to get screwed. It’s my opinion. And just like noses, everyone has one. That’s mine.
The State stepped in a few years back and wrote Buyer Agency Law because listing agents were screwing buyers over repeatedly.
If you want to dispense with the legal provisions the various States offer you, and that frankly buyer agents offer you at no cost, I simply don’t get it.
It’s an extremely rare unrepresented buyer that can both hold together their side of the transaction, and not get shot like fish in a barrel on contract terms and negotiation. You won’t even know how or if you were screwed until it’s too late to do anything about it.
And those unrepresented buyers that can do this, aren’t botching “I just want to see it” phone calls to random agents.
An example on how to help buyers become successful in their search…well first of all just putting someone that says they are interested at “looking” at houses in my car and driving them around for months on end, praying that this 3 bedroom 2 bath house is going to be the one that they just maybe might want to buy, is not helping them at all. Such a small percentage of buyers, that are in fact actually buyers not “lookers”, find their dream house by just popping in and out of random places. Why not sit down with the buyers and ask them pages and pages of questions on what they want in their dream home (which direction do you want the house to face, what are five things that you can not live without/live with in your home, do you entertain often…) do your research, preview homes that actually fit their criteria and then show them those homes? What is wrong with having to show your client 3 perfect houses instead of 100s juts because they saw this house that looked kind of cute on the internet? I believe this is a very successful way to aid buyers in their search. It makes the process much more enjoyable for everyone as well as helping you build a strong and long lasting relationship with your new life long clients.
Jon: As a Free Agent Buyer I guess that means you expect an agent to work you for free?
In TX, when I get a sign call to see one of my listings, if you are truly unrepresented and want to buy the house, you have just put the intermediary ball into play, which ball, if I do not play correctly, could cost me my career.
I have a contractual obligation to my seller-he hired me. You are not privy to that contract, but one of the provisions in my contracts (I’ll share this one with you.) is that I do not show the house to financially unqualified buyers. My broker also has a contract with me which you are not privy to, and one of the provisions in that contract (Again I will share.) is that I meet all unknown buyers at the office and we photocopy the driver’s license of the buyer. While you are at the office, I will interview you as to your financial capability. Sorry, you don’t get to test drive my Ferrari without us knowing who you are.
If you insist in putting my career at risk with your free agency charade, there are plenty of free agent buyer agent doormen out there to let you in the house, and I am happy to pay the cooperation fee to them, in accordance with our MLS contract, to which again, you are not a party.
Simply put, a “free agent buyer” is a potentially huge legal and safety situation for a listing agent. If the listing agent gets testy perhaps it is because you are demamding that he violate his broker’s showing policy or his employment agreement, neither of which are your business.
The hellish side of IDX.
Thomas- outstanding. It’s an honor to have another Texas agent around, especially one of your calibre.
Thomas: I don’t expect anyone to work for free. If I buy a property from the listing agent, they get paid at closing (last time I checked).
I am perfectly clear on who agents have a fiduciary obligation to, which answers a previous post about why I would pass on having one ‘represent’ me.
My main point is that whether you like it or not, free agent buyers are an increasing trend. I’m suggesting that there are 2 options for the real estate industry. Embrace this trend and figure out how to work with and support it, or live in denial and follow the travel agents into disintermediation.
Jon
“follow the travel agents into disintermediation”
Jon- Let me try one last time. The last time I checked, travel agents are not regulated by the state. If you as a free agent and all your free agent buddies can get the Texas legislature to change the law that we operate under, then we can all go skipping down the garden path in free agent bliss. As long as my listing agreements require me to be my seller’s fiduciary, you will have a tough time engaging me as a doorman.
My post was an attempt to explain how a free agent buyer is an incredibly risky proposition for a listing agent here in TX. You figure out how to get me off the fiduciary hook, and get my broker to sign off on it, and we can do business. There are other listing agents and brokers that may be willing to be your doorman for their listings, but some of us take our profession seriously and are excruciatingly conscientious about the execution of our duties. Yes, I said duties. Ever try to get a ticket refund when your travel agent booked the wrong flight? I make an error and it costs me six figures.
Get us off the fiduciary hook (FL has this type of law) and we can all play the free agent game. Until that time, you will just have to accept that your free agent proposition is not going to get you into every house you want to tour.
Thomas: Your reply perfectly illustrates the heart of the problem here. You are asking buyers to conform to your business model, rather than being open to modifying your business model to conform to a changing market. If there is one thing I’ve learned about business, it is that the marketplace is not ‘well behaved’. If a business insists on trying to control the behavior of its customers, they will eventually be supplanted by someone who is more flexible.
R, Jon
The customer in this case would be the seller.
The sellers are requesting we don’t kick them out of their house on the Friday night for buyers without the capablity to write an offer on their property.
If you can offer some proof of a mortgage pre-approval, are willing to meet at the office and produce a form of ID, and do this with the agent actually listing the house, there is usually no problem whatsoever in getting into a house.
Perhaps I am interpreting the original post incorrectly, but to me, Vicki is playing out a scenario I get all the time where people call about houses they see online, demanding that I show them a house, and more often than not, it isn’t my listing.
There’s a big difference in how I handle someone wanting to see my listing and someone just calling and making demands to see someone else’s listing.
In one instance, I am indeed potentially working for free, taking someone that I don’t know is qualified or that is otherwise represented to see someone else’s listing. In the other, I have duties to my Seller that I must consider. Either way, we’re having a chat first, and meeting in a public place, preferrably the closest office. If you sound nice and there’s one close by, I might even buy you a cuppa at Starbucks.
AZ and my broker require we discuss agency at our first substantial meeting, and I do it at every first meeting. I’m not willing to break law and risk my license or my safety by showing a house to someone who won’t spend 10 minutes with me in a public place first.
Maybe Jon has bought 20 homes, maybe he knows what he’s getting into. Heck, I was Jon 7 years ago. We used probably 6 agents at our whim over the course of 2 years. Not a one of them demonstrated any value to me, they were interchangeable. And then I finally met one who sat me down and explained exactly what her representation meant – and then she lived up to every word. In this business, there is a huge chasm between even average and excellent.
Anywho. I don’t want to show Jon my listings if he calls. I don’t want to be on both sides, and most of my sellers don’t want it either. When Jon calls me, we’re talking about agency up front, so he knows I can take every word he utters directly to my Seller, that I will jealously protect and promote my Seller’s interests, and that he has to meet me at my office first, for my own safety, or meet me at the house at a time when the Sellers are also home. I talk about that with my Sellers too – since they understand I’m a human and somewhat value my life, they don’t want me showing their house to a stranger without meeting them in a public place first either.
If Jon has researched agency and is following his own path, that’s his right, regardless if I think it’s the best move or not. And it’s mine to refuse to show him my listings if he won’t meet the terms that my sellers and I have agreed to.
If I wanted to be really testy, I could tell the free-agent buyers that I am going to suck every last bit of information out of their head that I can and report back to my Seller in the hopes that the free-agent does indeed make an offer. I’d get my Seller a great deal. Oh, and sign here that I have disclosed that to you. Good, let’s go see that house, you’re gonna love it.
Increasing trend or no – I am bound by ethics and law, so that every word that comes out of my mouth has potential for implied, undisclosed agency. I must be extra super clear about who I represent and at what time. If I give off the cuff advice over cocktails at a party that turns out to be incorrect, I am potentially liable for that. Given that’s the risk I’m taking, I must treat “free-agent buyers” in a very specific way.
CA is no different than AZ and TX. Once I have a substantial conversation with a person – free agent or whoever – I am now creating an agency relationship. That’s conversation. Not a written document. I am now bound by the law to provide information that this person may rely on in purchasing a particular property, whether I get paid or not, whether I represented them in a transaction or not.
If I tell the person that the lot size is X. They are able to rely on that – whether I officially or legally represent them or not. If somehow they get all the way through the transaction to ownership and then find out that the lot size is not X, I’d better get the money together for my insurance deductible.
It is my obligation to check the voracity of anyone coming into the house I represent for sale. One of the conversations I have repeatedly with my clients is that they remove all valuables – which includes jewelry, cameras, prescription drugs, fire arms, and generally anything that can be pocketed or pursed – from the home. We’re talking about inviting strangers into homeowners’ one place of safety from the world.
In terms of showing property to free agent buyers, I have done that under very specific circumstances. One is if their agent is unavailable for some reason. If the person is not represented by an agent I refer them to another realtor in my office.
I do not represent both sides – buyer and seller. Although that is quite legal and common in my market. In my opinion, that is a conflict of interest. I was hired by the seller to get them the most money in the shortest possible time for their property. Because I was hired by them first, my legal obligation to them comes first. So when hired to get a seller the most money for their property, how can I get the best deal for the buyer – which is what every buyer is looking for?
I understand, Jon, what your premise is. However, the laws that we speak of were designed to protect you the consumer. If you choose not to follow the guidelines as suggested and provided for your protection, that is of course your decision.
We are not talking about a business model. We are talking about following the law and keeping alive.
Between 1982 and 2000, more than 200 U.S. real estate agents were killed. Just two months ago, we received a police bulletin about a mother-son duo who was robbing open houses in my area. Fortunately they have been caught.
My job is in no harm of being phased out. In as litigious country as we are in, my job becomes more valuable and necessary with every lawsuit. It becomes strengthened by the little time people have to devote to selling/buying a home, learning the do’s and dont’s, filling out paperwork in the proper way, holding their own open houses, having the network of agents and clients I have to market their home to, knowing the market comparables not by pictures but by walking through the house and looking at the size, layout and condition from floor to ceiling. It becomes more invaluable every time I keep another client out of court. I become indispensable the longer I stay in business, the more classes I take, the more I learn and am able to filter the important facts from the rest.
How does a buyer know what the typical funding is for a homeowners association without having seen hundreds of them? Is 57% funding okay? How about 67? Who pays for the county transfer tax in this county? What’s the best way to hold title? What if the pest inspection is done and there’s work required? Who pays for that work? How do you negotiate that? Who do you even call for the inspection? How do you know they’re reputable? What do you do if they aren’t? How much should your initial deposit be when writing an offer? Does this report make sense? Is this what they all look like or is the seller trying to trick me? Should I disclose this? What if one party does not meet their timeline as stated in the contract?
Most people have the sense and the wisdom to know that they cannot possibly answer all of these questions on their own. They need an expert. That’s what we are.
Somewhere back there I must have said something about a buyer being represented by the listing agent. Just my opinion again but it’s a bad idea in my market. Maybe in others there’s no issue. But I can think of plenty of reasons not to risk it.
So, Jon, you want to risk it? Go ahead nobody is stopping you. Don’t worry about us or our business model. We know how to take care of ourselves. And if we don’t, then shame on us.
No, Jon, I am fully prepared to alter my business model within the constraints of the law and my contractual obligations. Obligations which you obviously feel put a little too much hiccup in your giddyup.
Your post has caused me to think about the free agency trend. Under current law and my current contracts, how about this: meet me at my office, I will run your credit report, and you pay me a refundable at closing retainer fee? You have already implied that you understand that I don’t work for free, and your retainer-let’s call it a “free agency fee” will compensate me for my time and my hard costs.
Jon, As you can see by the size of this thread, this is an issue which we in the industry do think about alot. You can holler “disintermediation-travel agency-whining about getting disintermediated” all you want, but you will still have to jump through the hoops that YOUR legislature has created for our industry. We practioners are simply following the rules, a concept that you seem to have difficulty grasping. Just because Jon wants unfettered access to people’s private property, doesn’t mean he gets it. I have seen nothing in your posts that indicates a willingness or a sensitivity to our need to comply with some very arcane and admittedly sometimes goofy rules. As a remedy, why don’t you gather up all your free agent buddies, you know, the ones who are the next big thing, and get the laws changed so we can all skip down the free agency path together as equals. The texas legislature doesn’t reconvene until 2009, so you have plenty of time to fix our industry. Unless, of course, you want to take advantage of this buyer’s market.
If you are really a home buyer in Texas, and you really want to see a particular home, I suggest that you find some Redpin/zip/Foxton’s type rebater and go shopping. The rules might have been changed by the time your get the 30 mortgage on your new home paid off.
With the mortgage meltdown, IMHO, we are going to see more “consumer protections” coming out of the legislatures, not less. I expect mortgage originators will get tagged with some kind of suitability responsibilities. In my mind, that means that even the most fiscally responsible free agent borrower/buyer will have to undergo a financial anal exam. When the lender and we agents are tasked with crystal ball suitability determinations under threat of some kind of federal sanctions, it will really constrain who we do business with. So call up some low/no service rebater and find yourself a house.
Another solution for you would be to hook up with the free agent sellers. That way no one would have to take uncompensated time with either of you. Just don’t dilly dally because 80% of the time free agent sellers end up listed with one of us.
Kelley-You are much more qualified to articulate this issue than I.
This thread really has become entertaining, particularly the part where I progressed from being an unreliable, unqualified waste of time to now being a potential thief or assailant.
In any case, I’ve learned some things from the conversation:
- As a free agent buyer, I’m nobody’s customer, even when I buy a property.
- There is a mix of opinions above about whether it is appropriate for a listing agent to show me their listing, and play both sides of the txn – this is interesting to me.
- The agents represented here (however small the sample size) see themselves as indispensable to the real estate transaction.
- You are all very confident and secure in your role, and feel no threat from the trends I described. Glad to hear business is so good.
Best of success to you all (sincerely). Thanks for the discussion.
R, Jon
Right back atcha, Jon. May you find a fabulous home and have a smooth transaction. Every one deserves to have a good experience.
There was no malice on my part, and I was not implying you are a thief or assailant. You are merely a stranger and as an unknown quantity, I don’t know what you represent until I know you better – certainly you see there were no pointed remarks about you specifically, and I’m sure you can understand my position regarding my safety. As a woman, I think a lot more about my safety than I believe most men do.
I don’t want to beat a dead horse, and certainly don’t think I can change your mind, but I wish you had taken away one more thing from the discussion: that the very rules created to protect you are the ones that bind us from helping you in the manner you want. The industry is changing, but our rules don’t change fast enough – real estate is far from a perfect business. Many times, we are as frustrated and hamstrung by the arcane requirements as you, I’m sure.
I appreciate the opportunity to see it from an outside view. Best of luck to you!
Kelley,
Thanks for the clarification. No worries. One of the limitations of this medium is that you aren’t able to see the smile on my face as I wrote the part about the ‘potential thief or assailant’. I just couldn’t resist. No offense taken.
I do admit that I have never before considered that my call to a listing agent might raise concerns about safety, I’ll be more aware of and sensitive to those concerns in the future.
There is an agent here locally who has tried tirelessly to convince me that all these rules and procedures are for my protection, but frankly, I haven’t felt very protected in the past. I’ll also admit to being a bit jaded but a couple of previous negative experiences.
Thanks also for your remarks about my home search. I’m not in the Texas market as was previously asked, but in Oregon. The market here has slowed substantially in the past 6 months, but prices are still holding fairly firm, which is a bit of a mystery to me. In any case, we continue our search.
Thanks again for the thoughtful reply.
R, Jon
[...] know I love a good debate. I don’t like when it starts with, Sounds like sour grapes from someone who is experiencing disintermediation. Deal with it. Adapt. Qui… It made me want to verbally punch him in the face. After days of heated conversation, with [...]
[...] Vicki Moore… HUH? [...]
[...] #1: Penguins do not have the patience to deal with the random phone calls that other Realtors® have to professionally deal with on a daily basis. Penguins have a very short [...]
This post is priceless. I have had several of these experiences and it really makes you wonder. Here is a new one for you. I asked for a pre-approval from a buyer and they gave me a letter from their dad stating “my son can afford the amount that he said”. They were serious.