Realtor Pressure

[athome77]

Inspected a rehabbed three unit (2 above grade + garden) in Humboldt Park on Friday. Pending sales prices in the low 600s. Sumitted appraisal report to client on Tues. Value 410,000, decliningmarket, over supply. Called client to give him a heads up. Client had no problem and said he was happy borrower nowknows she was paying too much and can cancel deal.

Client, just for fun, CCed me e-mail exchange between the listing and selling agent. I don't want 2 repost due to confidentiality but the jist of the e-mails is that I did not know what I was doing. The listing agent provided the name of another appraiser who was more "creative" and could "make the deal happen." He also provided four possible comparable sales. Two from 2005, one mixed use property, and one which sold with an additional vacant lot which has since been sold off for $250,000.

What irritiated me most about the situation is the apparent collusion between the selling and listing agents. It appears the selling agent, whose chief reponsibility is protecting the interest of her client, is more concerned with getting the deal closed than protecting the buyer. My salesperson license expired back in 1996, but am I missing something here? Shouldn't the agent representing the buyer be doing everything within her pwoer to protect the client?

 

[JonGalt]

Inspected a rehabbed three unit (2 above grade + garden) in Humboldt Park on Friday. Pending sales prices in the low 600s. Sumitted appraisal report to client on Tues. Value 410,000, decliningmarket, over supply. Called client to give him a heads up. Client had no problem and said he was happy borrower nowknows she was paying too much and can cancel deal.

Client, just for fun, CCed me e-mail exchange between the listing and selling agent. I don't want 2 repost due to confidentiality but the jist of the e-mails is that I did not know what I was doing. The listing agent provided the name of another appraiser who was more "creative" and could "make the deal happen." He also provided four possible comparable sales. Two from 2005, one mixed use property, and one which sold with an additional vacant lot which has since been sold off for $250,000.

What irritiated me most about the situation is the apparent collusion between the selling and listing agents. It appears the selling agent, whose chief reponsibility is protecting the interest of her client, is more concerned with getting the deal closed than protecting the buyer. My salesperson license expired back in 1996, but am I missing something here? Shouldn't the agent representing the buyer be doing everything within her pwoer to protect the client?

Sounds like business as usual with the two agents. I do a large amount of appraisals in Humboldt Park and it sounds like your analysis is spot-on as "declining" and "oversupply" are huge understatements. I've dealt with some similar situations with purchase price being higher than appraised value. I can't remember one instance where the buyers agent acted like an advocate for the buyer and did not try to push comps at me or the LO which would support value. You're fortunate to have a client which understands, I've lost quite a few in this type of situation as there always seems to be a competitor who can "make it happen".

 

[athome77]

Listing agent owns and lives in the building (not disclosed in listing). Buyer is senior citizen moving from N Barrington to the city, plans to live in the buidling. (West of Kedzie, North of Augusta). Agent representing buyer is from Lake Zurich. I know this is a lot of local specific detail, but those with knowledge of the Chicgao market have an idea of what appears to be going on here. The area was being gentrified but all of that stopped about a year and a half ago.

 

[Metamorphic]

Had almost the exact same thing today. Buyer's agent knows its going to be a rough appraisal so she starts selling us early. Claims she knows this is a good value because she and the buyer's have looked at "hundreds" of similar properties. "Plenty" of comps that will work although she didnt manage to utter even a single address. Even though the rest of the state is clearly and obviously in deck-in-rear market conditions Her area is pulled out and advancing so no negative time adjustment is necessary. She's out in the middle of BFE but claims that the deal would work if they'd use a local appraiser.

 

[Randolph Kinney]

You need to report this to Pam's web site: http://www.mortgagefraudwatchlist.org/

No doubt these Realtors will get another appraiser to hit the number. Report it!

 

[Scott Kibler]

The senior citizen in question must not have caught the Chicago episode of Gangland which profiled some of his future neighbors. Maybe he'll change his mind right after closing and not live there afterall.

 

[OSU Beavers]

It appears the selling agent, whose chief responsibility is protecting the interest of her client, is more concerned with getting the deal closed than protecting the buyer. My salesperson license expired back in 1996, but am I missing something here? Shouldn't the agent representing the buyer be doing everything within her power to protect the client?

Ah yes I remember that question from my exam. The term is fiduciary duty. And this is why most Realtors are useless, in the real world a Realtors fiduciary duty is to the deal. Once a deal is on the table they will do anything and everything to make sure it closes and they get paid. It does not matter if it is a good deal, a bad deal or a fraud deal. I have two recent examples, one where the buyers agent let an out of town buyer pay 10% over market. It was a cash sale so no pesky appraisers involved. And a recent seller’s agent listed and sold a house for a little old lady at 20% below market value. I asked her why it sold for so low? Was it trashed? Was the seller in poor health? No that is all she wanted out of it so they got an offer the first day. She could have gotten 10% more and still closed quickly. See, a Realtors fiduciary duty is always to the deal.

You just got in the way of their deal so you are now labeled incompetent and not to be used again.

 

[Metamorphic]

It really not reasonable to expect really fiduciary representation from a person with a high school diploma who took a online course and passed a multiple choice state test, and who's backup career plan involved hovering in the doorway of the local GM dealership. I know there's good, career, Realtors out there but the minimum qualifications and investment in the profession necessary to get the license don't lend themselves to strong fiduciary tenancies.

 

[Michigan CG]

Listing agent owns and lives in the building (not disclosed in listing). Buyer is senior citizen .................

This agent needs to be reported to his/her broker at which time you tell the broker you are turning him/her in to the state. And them turn it into the state. Realtors supposedly have an ethics code (one could debate how well it is followed). This Realtor has none.

 

[athome77]

Luckily the assignment was performed for a client that values the opinoin of appraisers over that of Realtors. No future business will be lost and I will be paid for the assignment.

I guess I was confusing fiduciary responsibility with what a prudent individual would do. Like I said, Its been over ten yers since I had a salesperson license and forgot that getting the deal done is what matters most.

ps Anyone suggesting an ethics violation be filed: I appreciate the suggestion but I have been down that road before. Big waste of time and little that can or will be be done.