Confessions of a subprime mortgage broker

[Richard Carlsen]

"If the property is listed overpriced and the broker knows it and the buyer wants to buy it, the broker has a fiduciary duty to disclose it to the buyer and let the buyer to make the decision."

What is "over priced"? Based on what standard? Certainly not based on value using Market Value as the basis for judgment. And for three specific reasons, the broker is not in a position to make a judgment on "value". No 1 is that brokers do not have the training nor the expertise to evaluate properties for value; No 2 is that brokers deal with "price" and not with "value" and No 3, "price" has no standard to which it must be compared for justification such as calling a sales price "over priced" similar to "value" which must be measured and justified based on a definition of value. In short, value is not a concern in the buying/selling of real estate and there is no justification for calling an agreed upon sales price between a buyer and seller as being "over-priced". Read the definition of "Price" in USPAP:
PRICE: the amount asked, offered, or paid for a property.
Comment: Once stated, price is a fact, whether it is publicly disclosed or retained in private. Because of the financial capabilities, motivations, or special interests of a given buyer or seller, the price paid for a property may or may not have any relation to the value that might be ascribed to that property by others.

In short, buyers agents/brokers work in the pre-market realm (prior to a closed sale) and therefore are not obligated to know or determine any justifiable "price" on the part of the buyer/client. Buyers are not under any obligation to purchase properties at a justified market level. Justification of value vis a vis sales price only enters the picture when financing is involved.

 

[Mike Garrett RAA]

In my state you can be a "transaction broker" and represent no one...just the deal. I am old school, like to be the seller's agent. Got my real estate license in '68 and to the best of my knowledge in 40 years in the business never convinced a buyer to pay more for a property then what it was worth. See definition of "market value".

 

[Alison Swain]

When the buyer broker wave first began, I felt that sooner of later there would be a lot of brokers who looked fiirst to the larger sale/commission instead of the buyers well being.

I expect that before all the smoke settles, there will be a lot of suits against brokers and especially the buyer-brokers.

I can't remember a single case where I thought that the buyer broker advised a client to buy the cheaper home that fit his circumstances best.

Can you?

Wayne Tomlinson

Nope.

I did an appraisal last year for an acquaintance who was beginning to get the sick feeling in the pit of her stomach that she had paid way too much for her house. She was right. She lives in an older, very popular part of downtown Orlando. Bought a house that's 1,200 sq. ft., one of the smaller lots, no pool. There had been some nice renovation, but nothing spectacular.

She bought at the absolute height of this market (July, 2005) and paid the second highest amount for a house that size selling between March and October of that whole crazy year. Once she got my appraisal back (at that time down just $20,000 from her purchase price, now probably worth $240,000-$260,000 - a third less than what she paid), she was ready to turn the appraiser in to the state. Although she kept mentioning what her realtard had to say (realtard kept telling her the value was still there), it never occured to her the question I was asking myself, "Where the h e l l was your buyer's agent when this purchase was being contemplated???" :Eyecrazy:

 

[Non Sequitur]

Here's another view.

http://housingdoom.com/2008/06/30/crack-of-doom-and-the-fraud-goes-on/

 

[Non Sequitur]

A direct link to YouTube.

http://youtube.com/watch?v=eKS0pvE-hqg&feature=related