Realtor Whistle-Blower . . . or Tattle Tale?

Pushing the Boundaries -- Literally

What do you do when you see another Realtor break the rules (or appear to)?

And if you do something, does that make you a whistle blower -- or a tattle tale?

Thankfully, the issue doesn't come up that often. But it does come up.

Here are the three most common situations where rule-breaking arises:

One. A home sells with virtually no market exposure, at a giveaway price -- and here's the kicker -- the Buyer's agent is the same as the home owner's (called "single agent dual agency" -- see, "That Sure Went Fast! (Too Fast??)".

Two. The Realtor "borrows" the MLS area number from an adjoining, more upscale part of town.

So, instead of entering the code that includes Powderhorn Park, the listing agent codes the listing for Kingfield, on the other (west) side of 35W.

Three. The listing agent flagrantly overstates a home's finished square feet (funny, the opposite never seems to happen).

"Tattling" or "Keeping it Honest?"

So, to repeat, what do you do?

My answer depends on a couple factors: do I have a client interested in -- or competing with -- the home in question?

Is the agent with Edina Realty?

If it is, I know who to call (their office manager -- or mine). And it matters more, because bad behavior by another Edina agent reflects on me personally.

Could there be a benign explanation?

For example, maybe the agent who was on both sides of the "fire sale" had express permission from their client to sell it, fast, at the best price they could get (but usually you do that loudly, not quietly -- otherwise how do you know it's the best price??).

And last but not least: how busy am I at the moment?

In general, I don't view it as my role to police other Realtors' behavior or business practices.

However, when such behavior harms my or my clients' interests, I see it as my obligation to do something.

As Martha Stewart would put it, "that a good thing."

P.S.: I suppose that the contrary argument would be that sleazy Realtors make ethical ones look good by comparison -- and therefore actually help the latter.

THAT Sure Went Fast (Too Fast??)

"Now You See it . . .
Now You Don't"

In a post last month, I posed the question, "Did the Seller Leave Money on the Table? Four Ways to Tell."

That post came to mind as I scanned the particulars of 2900 Chowen Ave. South, which came on MLS this afternoon -- I'm not kidding -- as "Active" at 1:45 p.m.; was switched to "Pending" at 1:47 p.m.; then was switched from "Pending" to "Closed" at 1:49 p.m.

Total elapsed time?

Four minutes.

Sale Postmortem

Well, at least other Buyers (and their agents) had a "heads up" that 2900 Chowen was coming on the market, right?

Wrong.

I can only speak for myself -- but I live 2 blocks away, have sold over a dozen properties worth $6 million-plus within a mile, and have an extensive local network of contacts.

And I didn't hear a peep.

OK, so at least the Seller got a good price, right?

Draw your own conclusion, but the asking price was $200,000, and the selling price was $150,000. (As a percentage of market time, that just might be the world's biggest price reduction --ever.)

That compares with a tax assessed value for just the land of $196,700.

Oh . . . and a couple doors down, the lot at 2822 Chowen is now "Pending." List price: $285k -- for a lot that is 21% smaller than 2900 Chowen (6,050 square feet vs. 7,623).

Single Agent Dual Agency: Exhibit A

OK, well at least the Seller's agent negotiated hard for them, right?

Hard to say, because the Seller's agent . . . . was also the Buyer's agent.

Called "single agent dual agency," such deals are notorious for conflicts of interest.

If you're keeping track, that's 4-for-4 on my "four ways to tell" if the Seller left money on the table.

As I say . . . draw your own conclusions.

P.S.: So guess what 2900 Chowen is worth according to Zillow? (Called a "zestimate")

Give up?

Try, $406k.

Did the Seller Leave Money on the Table?

Four Ways to Tell

In the history of mankind, no first-time Mother has ever under-dressed their newborn in the winter.

--Manhattan Pediatrician

So which pediatrician uttered the above line?

Mine (and my wife's).

What prompted that comment were the 3 layers of clothing my wife had already put on our newborn son (this was 10 years ago), coupled with her anxiously asking him whether he thought "the baby was dressed warmly enough?"

What's that got to do with real estate?

I've yet to encounter the Homeowner who thought their house sold for too much.

Money Left on the Table

On the contrary, a great deal of Sellers seem to believe that their home sold for too little.

So, are they ever right?

To help answer the question, here are the four, inter-related variables I'd weigh:

One. How long was the property on the market?

It's hard to argue that any home on the market listed for more than a month -- let alone six months or a year -- sold for too little.

In today's networked, 24/7 world, serious Buyers (and their Realtors) often know about properties before they come on the market.

If a home is a good fit for a serious, prospective Buyer, it's a good bet that they'll: a) know about it; and b) have gotten in to take a look.

Assuming, of course, that the home was on the market longer than 48 hours.

Two. Was the home professionally and aggressively marketed?

My checklist of "To Do's" for Sellers literally has 143 items on it.

Things like, "work with professional stager to the get the house ready; "arrange professional photography and meet them at the house"; "proof marketing materials designed by professional desktop publisher"; "do pre-list networking with other Edina agents" (all 1,600 of them); "plug new listing at various Realtor meetings"; "draft and proof (flattering) copy on MLS"; "promote the home's Broker Open."

And so on and so on.

All those things come across loud and clear to prospective Buyers.

And so does their absence.

Three. Who was the Selling agent? (representing the Buyer) -- and was it the same as the Listing Agent?

As I've blogged before, there are two types of dual agency: "broker-level," and "single agent dual agency."

In the first type, both the Buyer and Seller have their own agent -- but they work for the same Broker.

While that legally shifts the agents' duties, in my experience it doesn't alter either the negotiation dynamic or the outcome.

The second kind of dual agency-- where both the Buyer and Seller have the same agent -- is much more problematic.

In my opinion, no agent can serve two masters.

Which is why I will only represent one party in the transaction.

Four. Who was the Listing Agent? (representing the Seller).

Good Realtors have good reputations.

They do repeat business in the same neighborhood(s); are known for being thorough and hard-working; and have an established track record.

Mediocre agents . . . don't. (In fact, you're less and likely to run into mediocre agents, because today's hyper-competitive real estate market has already weeded them out.)

So, to sum up . . . . .

If the same (no-name) agent represented both the Buyer and the Seller; the house sold in 3 days with no prep or marketing campaign to speak of; and no other agents had a chance to get their clients through (or even knew the house was on the market) . . . . yeah, it's just possible that the house sold for too little.

Absent one or more of those factors, I'd be dubious.

P.S.: Note that none of the above factors include, "Sold for less than the Comp's would suggest."

While the Comp's (Comparable Sold Properties) certainly frame the owner's asking price and eventual sale negotiation, showings and actual feedback trump Comp's once a home is actually on the market.

Does Networking Really Work?

Instant Access to 1,600 Realtors

Does Realtor-to-Realtor networking really work?

Well, consider this:

With about 20% of the total listings in the Twin Cities housing market, the percentage of Edina Realty listings sold by other Edina Realty agents is 40%.

That could just be because "we" -- all 1,600-plus local Edina Realty agents -- really like one another.

But the truth is, most of us don't even know each other.

What really explains that 40% statistic is the amount of intra-company networking that constantly takes place -- at weekly office meetings, online, via email, etc.

It's always nice to be able to tell a prospective client during a listing presentation (basically, a job interview for Realtors) that, just by pressing "send" on my PC, I can instantly tell 1,600 other Realtors about my hot new listing.

Dual Agency - Two Kinds

When a Buyer represented by an Edina agent sells a home listed by another Edina agent, the resulting relationship is called "dual agency."

That's because both the Buyer and Seller are represented by the same broker, Edina.

While that creates some legal awkwardness, the benefit to clients -- in my opinion -- more than offsets the drawbacks

By contrast, when the same agent represents both the Buyer and Seller, that's called "single agent dual agency."

As they say, "that's a horse of a different color."

While single agent dual agency is permissible with sufficient disclosure and both parties' assent, I personally think it's not worth the risk.

In my opinion, the only way to be on both sides of a deal is ultimately . . . to be on neither.