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.

Bernie Madoff & the Path to Recovery

Stock Buyers Strike . . . For Good Reason

When will the stock market finally bottom?

Here's a thought: it won't be when P/E ratio's hit some magic level, or market cap's (capitalization's) become tantalizingly low, or even when the housing market finally stops falling.

It will be when Bernie Madoff is in prison, and he and his family are stripped of their -- his clients' -- assets. (Just plain stripped would be even better.)

For now, Madoff sits, under house arrest, in his $10(?) million Manhattan penthouse while his lawyers plea bargain and argue, however implausibly, that his wife should be allowed to keep $67 million now titled in her name.

And Madoff's victims?

Three months after their money disappeared, they are selling their homes to raise cash. I personally know of four such houses on the market in the Twin Cities, and wouldn't doubt that the number nationally is in the hundreds (don't expect an accurate tally, because in most cases, you'll never know).

Who wouldn't pull their money out of such a market?

What sane person would commit fresh money?

No wonder the stock market is suffering from the granddaddy of all buyer's strikes.

And that's before the debacle that has befallen investors in financial stocks, whose primacy in today's market was even greater than tech stocks' in the late '90's -- and whose subsequent fall has been harder.

"Madoff Homes"

Investors are right not to trust a market where the top securities cop, the SEC ("Securities and Exchange Commission"), outsources its "whistle-blowing" function. Actually, it doesn't even do that: when someone credible like Harry Markopolos presented it with credible evidence of fraud . . . it did nothing.

Meanwhile, our legal system allows well-heeled defendants to make a mockery of the presumption of innocence. Even if Madoff hadn't confessed -- which he did -- there'd be no doubt as to his guilt. (If it's all a big misunderstanding, somebody had quick better tell all those people selling their homes.)

In the meantime, any rational, functioning system would: 1) promptly incarcerate Madoff; 2) trace any assets attributable to his victims, and label them as fraudulently conveyed; and 3) confiscate such assets, and put them in trust for his victims. Done. End of Story.

Instead, Madoff is clearly using his clients' money to pay for expensive legal maneuvering. Instead of Madoff selling his homes, Madoff's victims are selling theirs. Watching all this, one would be forced to conclude that, at best, the authorities are impotent; at worst, they're corrupt.

The New Testament famously says "the poor will always be with us." It doesn't say anything about scoundrels like Madoff.

Until investors are satisfied that the Madoff's of the world have been dealt with appropriately, and convincing steps have been taken to assure that there won't be any more . . . don't hold your breath waiting for a sustainable stock market rally.