In the past week, I’ve personally witnessed real estate agents try to hide the truth from me, disclose confidential information that financially hurt their clients, and almost completely kill a deal by not returning our phone calls in the middle of a transaction. All of these issues are explicitly covered in the National Association of Realtors Code of Ethics and in our Kansas City Realtors Association contracts that we sign with our clients, yet all too many times I find that incompetent Realtors either ignore these written statements or they think no one will notice. Unfortunately, they still get paid either way if the home sale closes.
In real estate, we have what’s called a “contingency contract”. That’s when a client has to sell their current home to be able to qualify for financing their new home purchase. It’s a pretty common practice, but it does come with a lot more risk. A normal home sale involves a buyer and a seller, but a contingent contract has multiple people involved with more than one home sale and if one buyer has problems, then both home sales get delayed or fall completely apart. Sometimes there are multiple families involved in a chain of home sales. I’ve had as many as five homes in a contingency chain at one time.
Typically when that happens, it’s important for me to find out as much information as possible for all the parties involved. In the past two weeks, we’ve been forced to delay two closings and put one of them back on the market because the other agent did not disclose to me vital information about the buyers. I completely understand the rules about not disclosing confidential information about your clients, but had I known how weak these buyers were, I never would have suggested my clients sign a contract and take their homes off the market.
In another situation this week, a buyers agent on my team was out showing homes to one of our buyers. As they were previewing a home for a second time trying to decide whether to write an offer, the sellers’ agent called and made the statement, “My sellers really want to get this home sold. We’ve been talking about lowering the price down $10,000 so just write me an offer so I can get this home sold.” My buyers agent said she was floored that the agent working for the seller would say this to her. They did end up writing an offer, not because of that statement from the listing agent, but because our buyers liked the house. Ultimately, our buyers probably got a better price on the home though because of that statement.
One of the general public’s biggest complaints about real estate agents is their lack of communication. Good communication is vital to getting a home sold. In my 12 years in the real estate business, the lack of good communication from other Realtors is also my biggest frustration too. It makes it difficult to keep things moving forward, and sometimes it even kills a deal.
Last week we had a buyer perform their home inspections and request a few simple items to be fixed by the seller. Nothing too expensive and certainly nothing that would require getting estimates. Once we submit the properly signed request forms to the sellers’ agent, we typically hear back from the sellers’ agent within 24-48 hours. At minimum, a good agent will acknowledge they received the documents from us. Unfortunately though, this agent didn’t acknowledge receipt of the documents. He also didn’t call us back after leaving numerous voicemails, emails, and text messages for 4 days. We didn’t know if he was even alive at that point!
Finally, we get a response but by that time our buyers were about ready to walk away from this home. Sometimes buyers and sellers allow too many nervous thoughts to run through their heads and decide, “They’re not responding fast enough so I’m going to stick it to them and let them keep their home”. We had to keep our clients calm by telling them, “It may not be the sellers’ fault at all. For all we know, their agent may have not even spoken with them yet.” We did get a resolution worked out on the inspections, but I’m pretty sure the sellers had no idea how close they came to losing a buyer.
Yesterday, one of my seller clients said to me, “You know, that agent on the other side screwed us and cost us more money. That guy shouldn’t get paid or at least he should be forced to give up 1% of his commission.” I had to explain to them that although I agreed he was incompetent, when the closing happens in two days, he’ll still be getting paid his full commission. Unfortunately, there are no “penalties” for doing your job poorly. Hopefully these agents will get weeded out by eventually losing clients and leave the real estate business. The truly sad part is, there will always be new agents pouring into the business to take his place. Agents that don’t bother to learn how to do their job. Agents that don’t know how to properly advise their clients. Agents that lie or at minimum, hide the truth because they need this deal to close and get paid. It’s the sad truth, but that’s exactly why it’s important to take your time and make sure you have a great real estate agent working for you.