RealTown's RealTalk

Refusing to show short sales flies in the face of an agent's fiduciary to
their buyer client.??????????????????????????????

JudiB says the above. I say it flies in the face of my own "making a
living" and fiduciary responsibility to my family. I never-ever show short
sales. Never will. Thank goodness in Central Arizona we have ARMLS who say
in effect: "The co-broke can have NO conditional statements", i.e. If the
lender agrees only to pay something less than 6%, then the two brokers will
divide it equally." Go ahead, but not with me. I'm not working for, and my
agents are not working for some "mystery commission". That's NUTS!

Just as any other independent contractor can choose a job for a certain
amount of money or walk from it, I walk from all "conditional" statements
regarding commissions, walk from MLS's that say "use this title company",
and the rest of the junk listing agents put in the MLS that their seller
never authorized them to do.

I show houses with a minimum co-broke of a certain percent. Below that I
will not show. I never show a house with a condition on the Title or Escrow
company.

With the number of houses on the market, if banks involved with short sales
only want to pay something lower than I am willing to take, so be it. They
lose. I don't.

Philip Rosenberg
Broker/Owner
1-Click Realty and Property Management
Phoenix, AZ

RE:  Not showing short sales, short sale commissions, etc.

I'd like to elaborate on my last post vis a vis showing or not showing short sales.  As real estate professionals we are charged with looking out for the best interest of our clients and that responsibility comes in many forms.  When representing a buyer we typically (or should be showing) are showing properties based on several criteria, i.e., location, condition, price, etc.  In the literal sense not showing a short sale could be construed as a violation of our fiduciary obligation to the buyer and a potential violation of Article 1 of the COE not looking out for the best interest of the client.  However, in my opinion there are several variables in this regard.  In most markets there is plenty of inventory to show buyers properties not needing to show a short sale. 

Most of us are aware of many of the horror stories associated with short sales; the bank taking several months to answer, approving a short sale and at the last minute changing the conditions etc.  If in the course of working with a buyer, the agent advises the buyer of the potential problems associated with purchasing a short sale and the buyer says to the agent I have no interest in seeing these properties, in my opinion I as a hearing panelist would not find the agent in violation of article 1 of the COE. 

However, if buyer X said to agent Z I want to see this house, the agent advises the buyer the property is a short sale  and the buyer still wants to see it then in my opinion the agent would be in violation of article 1 if the agent refused to show the property.  Secondly, if the agent tells the buyer I refuse to show this property because the commission is X or may be reduced the agent maybe in violation of article 1 (again in my opinion).  Bear in mind the commission is ALWAYS subordinate to the interest of the client, ALWAYS, there are no exceptions.  Meaning the agent can not make an offer or refuse to make an offer subject to the commission.

With regards to published commissions in the MLS vis a vis commissions as long as it is published in the MLS the commission may be reduced by the lender there is no violation and it is not an arbitratible matter (again my opinion).  However, if the listing agent fails to disclose the listing as a short sale in my opinion the agent could be in violation of Article 1 (not looking out for the best interest of all parties), Article 2 ( misrepresentation and failing to disclose a material fact), and possibly Article 3 (failing to pay the cooperating commission, if the commission were to be reduced).  It would also be an arbitratible matter and the complainant most likely would prevail.

One last thing, it has been my experience that some agents when listing short sales are listing the properties well below market value in an attempt to attract multiple offers.  This is a major disservice to the seller, the bank, and the buyers.  Having completed over 700 BPOs in the last eighteen months a good 10-20% of them are for short sales and many of them are priced way too low.  There have been times when I have brought the value in higher than what the property has been listed for.  I have had the BPO company question me on this and tell me to bring the value in at the listed price.  I politely explain this is my opinion and this why you are paying me, for my opinion of value. I also explain to them it is my opinion the agent has listed the property too low and if the bank were to take it back they still would probably sell it for more than what the agent listed the property for.  In almost every case I have prevailed.  This is one more wrinkle in the short sale situation.

In the final analysis, the agent should be looking out for the best interest of the buyer and if it means not showing a short sale(s)  as an ethics panelist I'm just fine with that.

Refusing to show short sales flies in the face of an agent's fiduciary to
their buyer client.??????????????????????????????
 

JudiB says the above. I say it flies in the face of my own "making a
living" and fiduciary responsibility to my family. I never-ever show short
sales. Never will. Thank goodness in Central Arizona we have ARMLS who say
in effect: "The co-broke can have NO conditional statements", i.e. If the
lender agrees only to pay something less than 6%, then the two brokers will
divide it equally." Go ahead, but not with me. I'm not working for, and my
agents are not working for some "mystery commission". That's NUTS!
 

Just as any other independent contractor can choose a job for a certain
amount of money or walk from it, I walk from all "conditional" statements
regarding commissions, walk from MLS's that say "use this title company",
and the rest of the junk listing agents put in the MLS that their seller
never authorized them to do.
 

I show houses with a minimum co-broke of a certain percent. Below that I
will not show. I never show a house with a condition on the Title or Escrow
company.
 

With the number of houses on the market, if banks involved with short sales
only want to pay something lower than I am willing to take, so be it. They
lose. I don't.
 

Philip Rosenberg
Broker/Owner
 

Mr Rosenberg,
         
I am sure you meant to explain that you always show the listing information to your clients and remind them that according to your buyer agreement that if the selling portion of the commission is less than the x%  you and your client have already agreed upon, that Mr and Mrs Client you will need to make up any short fall. However if, as you have implied, that you make the decision to not even tell your client about a particular property because you might not make the money that you feel you deserve I hope that you change that business practice. There are many here who will be happy to cite the chapter and verse of the code of ethics- all I know is that it is very straight forward with no room for any confusion that a Realtor's financial interest is never more important than the transaction itself.

I am not sure what disturbs me more from your post- that you choose which properties you show your clients based on your personal desires or that you are a broker/owner. I do hope that if you have any agents working under you that you are not sharing your business model with them. I am very sorry if this sounds harsh, but I am getting tired of fighting the battle that Realtors are greedy and only in it for the money.  Behavior such as this only enforces the already low public opinion of Realtors.

Yes this is a business, and yes I do have an obligation to my family. However I also have an obligation to my clients to find them the best property for them no matter what co-broke is offered.  And sometimes I make y% and sometimes I make x%. But my clients are happy.  And that is what is really important. Happy clients mean happy referrals. So yes sometimes I just take y%.

Instead of making the decision to just not show short sales because the bank might reduce the commission- just address that up front with your clients. I need to know I will be paid x% and if a particular house that you want to purchase doesn't pay x, than you Mr and Mrs Client will need to make up the shortfall. You are correct, as independent contractor we do get to make many decisions for ourselves as to how we will conduct our business. You just need to work within the rules.

Kris Coutant
Associate Broker
Balfour Realty
Serving Upstate NY - Warren, Washington
        and Saratoga Counties