Diary of a Busted Austin Real Estate Deal

Well meaning Agent blows deal for Buyer

Recently a buyer on one of our listings terminated the contract, and then threatened to sue us and the Seller after the property was placed back on the market and a new offer was accepted. As is often the case with deals that go sideways, the buyer’s misfortune can be directly attributed to her real estate agent and her lack of understand about the sales process – particularly the importance of observing contract dates and deadlines.

Let’s take a look at the string of bizarre events in this deal and see how the agent’s lack of attention to important aspects of the deal cost his buyer a house that we later learned she desperately wanted.

Agent failed to ensure timely delivery of the Option Fee.
His excuse was that the “traffic was too bad at 3PM on a Friday” for him to drive the funds to our office. Instead, he chose to leave the Option Fee and Earnest money at the front desk of his office to be picked up by a courier, even after being told by the Title Company that a courier would not be able to pick up and deliver the funds that day, thus it would be Tuesday before it happened (due to a Monday Holiday).

The agent then chose to leave town the next day, Saturday, without personally delivering the Option Fee to our office, which would have ensured timely delivery and compliance with the Termination Option provisions of the sales contract. The agent knew or should have known from the outset that his actions regarding delivery of the Option Fee would result in his buyer not having an Option Period. This was the first red flag for me, and a head scratcher. How could an agent not make delivery of the Option Fee and Earnest Money top priority?

The Option Fee was received by the Seller on the 5th day of the contract, three days late. I discussed with the Seller the fact that the Buyer actually had no Option Period due to the fact that delivery of the Option Fee did not happen as required. I discussed the pros and cons of accepting or rejecting (mailing it back) the Option Fee.

The Seller decided to treat the delivery of the Option Fee as if it had been timely, thus providing the buyer with the benefit of having an Option Period to which she was not entitled. The buyer, as far as we know, did not know that this “near miss” occurred.

The agent chose to place his personal convenience and holiday travel plans above protecting the interests of his buyer. It was only the Seller’s good nature and pragmatic approach to working the deal that prevented this from becoming an issue of contention.

Agent failed to deliver Buyer’s loan pre-approval letter as promised
Buyer’s Agent promised upon delivery of the offer to provide buyer’s loan approval letter “within a few minutes”. Though not a critical element of the written contract, the loan letter was requested, delivery was promised, and the buyer’s agent failed to follow through and provide the letter as promised. Normally, when an agent tells us they have a letter in hand and it will be sent in a few minutes, it happens. This time it didn’t.

By itself, this is not a huge issue, but it’s one of multiple instances of the agent not performing or following through on an important item, which led to the eventual erosion of our confidence in him as an agent and his ability to get things done, which would in turn factor heavily in the seller’s decision to seek a new buyer. We’ll get to that in a minute.

Buyer’s Agent failed to provide Buyer’s lender with the contract
On Wednesday, the day after the Option Period expired, Sylvia contacted the buyer’s lender to check up on the loan and to make sure that things were on track to close on time, that the survey and appraisal had been ordered, etc.

The lender had no knowledge whatsoever of an existing contract and had not been provided with the contract. This is on day 6 of a deal that the Buyer offered to close in 14 days. This was a shock to Sylvia. The lender asked if there was a survey and was told there was not. Sylvia asked if the lender could still meet the approaching closing date, which was now 8 days away and was going to be a mailout to the Sellers (subtract 2 days). The lender said that it was possible, but that they needed to get going on it immediately, that instant, if it was going to happen and even then it would be iffy.

Sylvia called the buyer’s agent immediately to tell him that the lender did not have the contract and to discuss making sure the deal keeps moving. The agent then mentioned that he was at the house waiting for a plumber and frantically trying to arrange bids for several other things over the next couple of days. Sylvia informed the agent that the Option Period had ended the day before. His response was “No, it didn’t. It ends today and I’m still getting bids”.

Before Sylvia could discuss this further, the agent informed Sylvia that the lender was calling in on his caller ID and that he better talk to her, and the conversation ended. Sylvia then called to tell me that our suspicions were correct; the agent didn’t know that the Option Period had already ended.

Agent failed to properly calculate the number of days in the Option Period.
Normally, Option Periods do not simply expire without any communication (repair requests) from the buyer, except when the agent doesn’t know how to count the days, or forgets about the deadline. The Option Period was for 5 days. The Option Period expired with no communication whatsoever from buyer agent.

The Option Period thus terminated and, for the second time in this deal, the buyer officially had no Option Period as a result of the failure of the buyer and her agent to observe and follow important deadline dates.

Conversation, again, with the Seller
I explained to the Seller after Sylvia had informed me that the agent had his dates wrong, that the Option Period had in fact expired without any repair requests from the buyer. The seller asked “why would they just let it expire?” and I explained that the agent had not properly calculated the days in the Option Period and is under the incorrect assumption that the option period ends a day later (the current day) than it actually did, and was apparently still trying to get bids for repair items.

I then, for the second time in as many days, discussed with the seller the implications of the Buyer having no Option Period. I also alerted him to the fact that the closing would probably be delayed because the loan processing had not been initiated until that day.

It was decided that we would wait and see what happens by the end of the day, and make a decision as to how to proceed at that time. The conclusion being that the Seller was under no obligation to agree to any repairs whatsoever due to the expired option period, but that if it looked like the deal might blow up over modest repair requests, he could always go ahead and agree to a final amendment anyway. We would just wait and see what the buyer asked for.

Agent argues about indisputable facts and lets his personality override protecting his client
Later that afternoon, the agent called our office and spoke with me. He said the buyer was going to need to extend the Option Period for two additional days as further bids for repairs at the property were needed. At that time I explained to the agent that the option period had in fact expired the day before, and asked if he was aware of that fact.

The agent argued, saying the Option Period had not expired and was still in effect until midnight that day. I suggested that he simply look at the Effective Date written on the contract, and count the days himself, but that it was a fact, not my opinion. I then explained that the sellers had already graciously overlooked the fact that the Option Fee was not delivered on time, and that now the Option Period was in fact expired. The agent said, “whatever”.

I further explained that the Seller was reasonable and wanted to make the deal work, but that we needed good solid justification for extending the Option Period given the fact that it had already expired. He responded in a dismissive tone again with, “Whatever…they can either extend the Option Period or I’ll send over a Termination Notice. You want me to just send the Termination Notice?”

I asked the agent, “are you deciding to terminate the contract on behalf of your Buyer or has she instructed you to say that to me? You’re not making things better for your buyer. I’m trying to help you make this deal work but I need to know where the buyer stands and why more time is needed so I can explain it to my seller”.

The agent then accused me of being difficult to deal with and went off about how he’s the “best buyer’s agent in Austin” and has never had a listing agent give him this much trouble.

Trying to keep things moving toward a successful close, I suggested the agent go ahead and send a written amendment for extending the Option Period, along with an explanation for the request, and that I would present it for consideration to the seller, but that the Option Period was in fact expired and that he should inform his buyer of that fact. The agent said he would be sending both an Amendment to extend the Option Period AND a Termination Notice, in case the seller “drags his feet” and let’s the option period expire.

Arggghhh! I again tried to clear up his confusion about the dates and explained that a Termination Notice would be just that, a Termination of the deal, and suggested he carefully consider his buyer’s interests and explain the possible consequences to her before doing that.

Are you hangin’ in there with me on this one? It gets better.

Steve Calls agent’s Broker to discuss the poor handling of the deal
After the conversation with agent, and coming to believe that he was not capable of completing the efforts needed to keep the deal alive, I called the agent’s Broker, and provided an overview of the above facts. The Broker asked “what do you want me to do?”. I said, “I want you to get involved in this deal and supervise this agent because, in my opinion, your buyer is not being competently represented and is going to lose the deal”. The Broker indicated that he would step in to supervise the agent. In fact, as it turned out, he did nothing.

Buyer Terminates Deal
That evening, the agent sent over both a Termination Notice and an Amendment requesting extension of the option period. Of course, the Termination Notice controls and terminates the deal, period. The Amendment is meaningless, even if signed, unless it has language such as “this Amendment rescinds and voids the Termination Notice dated dd/mm/yyy”, which it did not.

So, the contract was at that point officially terminated by the buyer. I called the Seller to explain where the deal stood.

At this point, the other agent has provided us with no hint as to why more time is needed, other than they are still trying to gather bids. Despite trying to ascertain why the bids were needed, we have no clue as to what the buyer is thinking with regard to possible repair requests. The loan hasn’t even been started, so we know the closing date is also going to have to be extended, probably by 10 days if the weekend rolls around on us.

The agent is combative and unreliable, so we cannot trust that two more days of waiting will result in a positive outcome. In fact, the buyer has terminated and we may never hear back from her at all, nor does she have any obligation to come back to the deal. The seller could try to play hardball and lock the buyer into the deal based on the missed option period deadline, but the buyer would have other outs, and it’s not smart to invite legal issues into a deal. The other agent has yet to follow through on one single important deadline or promise, so the Seller and I are left to wonder why anything will be different in two days.

Back on the Market
The Seller decides to accept the termination (versus disputing it due to expired Option Period and trying to force the buyer to stick to the deal as-is).

I changed the listing status back to “Active” late that night, and by noon the next day, two new offers had been received from two new buyers.

First Agent informed of new offers and invited to get his act together
With multiple offers, both new parties are informed that multiple offers exist and instructed to let us know whether to leave their offer as-is, or to submit any changes. Additionally, Sylvia talks to the other (first) agent and explains that if the former buyer still wants the house and would like to submit a final Amendment rescinding the Termination Notice and asking for any final changes, he better get going.

The agent still didn’t get it. He insists more time was needed to meet additional vendors for bids before the Buyer could submit a new offer. Sylvia then stated point blank, “you do realize that the Seller is likely to accept one of the new offers today and this is your last chance for your buyer’s offer to be revived and considered alongside the other new offers?”. The agent remained steadfast in his refusal to move any faster.

New Offer Accepted
The seller accepted one of the new offers. The former agent and other new agent were informed. The former agent became enraged, saying “we were still negotiating and you knew it. This is unethical”. All we could do was to remind the agent “your buyer terminated the contract” and “we tried to help you stay in the deal”. The Broker for the first agent then called in a panic. “Our buyer wants the house. She’ll take it as-is. What do we need to do to keep this deal alive?”.

Next, the letter from the first buyer threatening lawsuit arrives. She has no clue what’s happened. This is followed by more calls from the Broker, with veiled threats that the Buyer may in fact sue. I just keep saying “the buyer terminated the contract, end of story”. Meanwhile, we’ve already moved down the road with the new buyer.

The new buyer sails through the inspection, accepting the property as-is without any repair requests or price adjustments, and closes the deal only a week later than we would have with the first buyer. Sweet! The other (new) agent was on top of every detail and the entire deal went off like clockwork. What a contrast to the first agent.

Lessons Learned
If you’re being represented by an incompetent, arrogant agent, it can cost you dearly. There are many dedicated, hard working agents who want your business and want to help you, but like all industries, the quality of service you receive can vary.

We later learned that the first buyer desperately wanted this house and would have stuck to the deal no matter what. She was both devastated and livid about losing the home. That’s really sad. She blames her loss of the home entirely on me and Sylvia and, as far as we know, doesn’t have a clue about her agent’s mistakes and poor handling of her side of the deal.

I asked the Broker the following questions during one of our conversations:
1) Why did the buyer sign a Termination Notice? What did she think that meant and why didn’t her agent explain the consequences of terminating the deal?

2) Why was the buyer under the impression that the Seller would hold the property off the market for her after termination?

3) Why did the agent not call her instantly upon learning of multiple new offers, and get her back to the table right away?

4) If she was willing to accept the property as-is no matter what, what was the reason for obtaining all of the remodeling bids? Why not ballpark the big items and shoot an amendment to the seller and see what happens?

5) And why didn’t you, the Broker, step in after I provided the courtesy “heads up” that the deal was heading south?

I understood the Broker’s measured response. And I heard between the lines – “we screwed up big time”, though he couldn’t come out and specifically admit that.

Never have I seen a buyer so poorly represented in a deal.

Posted by Steve
8 years ago
Steve

Steve is a Real Estate Blogger, Husband and Dad, UT Austin Grad, Runner, Real Estate Broker and owner of Crossland Team and Crossland Real Estate in Austin TX.

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k - 8 years ago

this is why we always represent our selves. we have had bad luck with agents and find them to have the biggest ego’s. we can do a better job representing ourselves and the deal w/either the buyer/seller or their agent. We’ve done it in 8 deals and they’ve all gone very smooth. My suggestions though: make sure you have an on the ball mortgage broker and a good title company-shop them too…you will see the fees vary and you can save a hundreds of dollars at the closing table!

We have had good luck with the agents that we do these kinds of deals with. They’ve been very professional. It’s hard to get 99% of agents to show their clients the for sale by owner homes and when they do they talk the house down. They always slip us their card and ask us to think of them when we decide to list w/an agent. We also get their advertisements and calendars in the mail. We don’t think that is working for their buyer either. We always offer 3% to the buyers agent. We don’t get it. We just sold a house in 3 weeks at full asking price-and yes, we did a CMA ourselves and our house sold for more money, more price for square footage, and quicker than the other houses on our street and surrounding streets. We know our houses and love them. The warmth that comes with that always sales versus the coldness of “another listing-you know I am the #1 lister in Ausitn”. It’s our house, our investment, and our memories. Keep in mind…the market is soft too.

Big investment and lots of emotions…this deal is where your family memories will be made and your hard earned money spent.

It sounds like you and Sylvia are really good agents that do look out for your clients and the deal. Hope to do business with ya’ll one day!

k

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Observer - 8 years ago

Steve, what happened to the earnest money? Also, how exactly an option period is calculated – is the effective date of the contract counted as day 1 of the option period ?

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ARZ - 8 years ago

somehow I still think that some people are better off just do all the homeworks themselves. to find a good agent is a hit or miss thing. Sometimes a good agent can have a bad day (or bad period), and sometimes, your agent might be good at what he’s doing, but your personalities just don’t click…

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Allison Crow - 8 years ago

Once again, Steve, thanks for sharing your stories. I pray the agents I train will never be BOZOs and I will certainly share this with them not only as an example of what NOT to do but also to show an excellent example of the utmost in professionalism when dealing with said all too requent Real Estate Bozos.

AC

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shireen - 8 years ago

Ugh! What a story.

The name of one bozo agent is burned into my brain! He represented a buyer on when we sold our last house. It was the winter after 9/11 and the market was very slow, we were moving into our newly built house in January. This buyer insisted on closing before Christmas. I had two little kids, we moved heaven and earth — arranging to board pets, store cars, set up temporary housing, arrange moving and storing all our belongings — all to accomodate their need to close before Christmas. Then the buyer’s financing fell through — before the days of manic, no-doc, subprime financing — I think that the initial letter of financing was fishy, forged, who knows. Anyway, the agent never informed us of this. Thanks to our agent’s constant attention to detail and my own call to the title company, we figured this out two days before the schedule (yet non-existent) close. The buyers agent plan was to show up at the closing and present us with a lease for the buyer to lease our house while she arranged financing.

Needless to say, we turned it down. Thank goodness the closing never happened. Had my agent and I confronted the buyer’s agent in person I think we would have throttled him!!

THAT was a stressful Christmas! I had a 10 month old and an two year at the time to boot!

I still dream of running into that agent and giving him a piece of my mind but I think that he no longer sells real estate! no surprise.

Sorry this happened to you all but way to go with multiple offers and little delay!

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Jim - 8 years ago

Another side effect of Real Estate entry being too easy, and there not being any requirement for a mandatory 1-year supervised apprenticeship period like with inspectors and appraisers.

Until we make it impractical for idiots, bozos and part-timers to work in real estate, this will continue happening, and good agents will suffer because of too many idiots competing with them — usually by offering to give back some of their commission in exchange for business.

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scott - 8 years ago

I can infer a few things from this…the market in Austin must be pretty hot for an agent to be unavailable the day he/she
is nailing down the contract. I’ve heard of listing agents AWOL without backup on vacation, losing potential deals,
but not on the buyers side in the middle of negotiations.
As the market slows a bit, I don’t think this will happen again. There are two things about agents you can also infer from
this. One, many are part time, and just doing it for some side money. They have the important job with the bennies
already, and time off might be more pressing to them then consumating a deal. Also, it is still too easy to get a license.
You can get one at Austin school of RE without even attending class, all on the web. You just show up to take the final
exam. What can you expect would be the result of such a low bar?
I remember it being this way 12 years ago when I first got my RE license. I was lucky enough to start in a Re/Max
office with a bunch of old pros, and they had stories like Steve’s for days. So many times, they were forced as listing
agents to keep the buying side from falling apart due to inexperience/incompetence on the buyer’s side.
12 years later, it looks like nothing has changed.

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Steve - 8 years ago

> Steve, what happened to the earnest money?

Buyer got it back.

> how exactly an option period is calculated – is the effective date of the contract counted as day 1 of the option period ?

The effective date is Day Zero” of an Option perdiod. So, if a seller signs a contract at 8PM on a Thursday and the Option Period is for 7 days, the buyer will have until midnight the following Thursday to terminate the deal.

> Once again, Steve, thanks for sharing your stories.

Your welcome! That one got a bit long and I wondered if anyone would real the entire article. Thanks for doing so.

> … Thanks to our agent’s constant attention to detail and my own call to the title company, we figured this out two days before the schedule (yet non-existent) close.

It often does require constant attention to stay on top of all the aspects of a deal. When things go sideways, sometimes there are red flag to warn us, su as the deal I described, but other times it’s sudden and without warning that a deal craters. It’s all part of the business.

> Another side effect of Real Estate entry being too easy

And if entry it were made more, the industry would be accused of locking out new agents.

> I can infer a few things from this…

Even experienced agents are capable of incompetence or a simple screw-up. We make mistakes too. The questions are always, – where does that mistake stem from and is it part of a chonic pattern?

If it stems from arrogance, ego and control issues, those attributes don’t serve a client well. Neither does garden variety inexperience or incompetence. The worst combination is an arrogant, ego driven agent who also happens to be incompetent.

But you can tell quickly the difference between agents who hold themselves accountable for oversights and the ones who seek to blame others or explain things away with excuses. Agents who truly operate from a servant’s heart take ownership of their actions, remedy things quickly, and move on with whatever next step is needed to make sure the client is being well served.

Steve

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scott - 8 years ago

Very well said, Steve, per the replies…….You know, the way I see it, any viable professional field limits the bar of entry
to a certain extent. This is not just for the most obvious reason, keeping the standards associated with the respected
profession as high as possible, but also avoiding the possibility of oversaturating the market with representatives of that
licensed field, from law to accounting, and everything in between. Even in something so prosaic as the hair care field,
care is taken to analyze the carrying capacity of the market, limiting licenses to a number that wouldn’t burden the
field with an overadundance of labor supply, ruining the capacity of all in the aggregate of making a decent living.
Per law, for example, state bar standards are set per the same two considerations, dilution of the field, and maintenance
of a reasonably high level of professional standards. Short of on-line ordained ministers and other fradulent scenarios,
professional licensees generally have to physically attend some kind of classroom instruction and/or work in the field
as an apprentice or its’ rough equivalent. In Texas, and many other states, one can receive one’s Real estate salesperson’s
AND Brokerage licenses simply by taking an on-line class, never meeting anyone personally but your test proctor,
just there to administer the exam for two hours. Can one possibly imagine a viable professional occupation being respected with such a low bar of entry? What would you think of CPA’s or Lawyers if they were licensed in the same way?
My point is that the bar could and should be raised much higher in the RE profession. States are the party responsible
for licensing RE agents, therefore they each set their own respective bars to entry. Unfortunately, RE has been traditionally viewed has one of the few opportunities for individuals, such as housewives, to achieve professional status without
a college degree or professional experience. The real estate profession has changed so much in the intervening years that this is not the case anymore. Technology has changed, and one must retain a far higher skill set to thrive in the RE profession. Also, the well-paying blue AND white collar jobs available have declined marketly in many areas and cities,
so you have a far higher number of people gettting into the real estate professionl than in the past. These scenarios
all cry out for higher regulation and higher bars. Most agents themselves would admit that the RE agent pool is greatly
diluted. The answer would be mandating a bachelor’s degree. These could be provided by for-profit schools as well, just
like the DEVRY schools. Current licensees would have a certain amount of time to comply, and perhaps credit given
per number of years in the business. Many degreed individuals are already in the RE field, and the mandating of such
would just increase a trend that is taking place now already.
Just a few thoughts…interested what other folks on here think about this…..

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Scott - 8 years ago

Thank you Steve, for having the integrity to post my last reply. I would imagine some agents would feel it derogatory,
and delete it. My personal feelings towards real estate have been the same as they were 12 years ago, per part-timers
and the low bar, but I strongly feel that RE will change so much in the next 3-6 years that it will rend the issue totally moot.
DIY sites, consolidation of state MLS data to the public(see California), and other tangents are already on their way
to shaping that change. What ultimate form it will take I don’t know, but I can assure you that in the long run we will
ALL be better off.

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Mare - 8 years ago

>> The answer would be mandating a bachelor’s degree.

As a new agent (a.k.a. ‘pretender’) and former housewife that has over 100 college credits but no degree, my stance is that this is not necessarily the answer. Gary Keller graduated with a bachelor’s in real estate, and even he admits that he didn’t know what in the world he was doing when he started out.

A degree isn’t necessary to learn a skill set, but experience certainly is. Lawyers and accountants (usually) go through an internship – not so in real estate. Additionally, a bachelor’s isn’t going to magically confer integrity and a good work ethic. And if I see one more agent that brags about their MBA on their business card – and has sloppy MLS listings and misspellings on their flyers – I’m going to scream. And whenever I see a poorly-kept vacant property listed by a team that proclaims to be #1 at this or that, it makes me angry.

If it were up to me, I would mandate an associate’s degree, including an internship, and call it a day. If a nurse can work in the ICU with no more than an asociate’s degree, then real estate agents can get by with the same.

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Steve - 8 years ago

> I strongly feel that RE will change so much in the next 3-6 years that it will rend the issue totally moot. DIY sites, consolidation of state MLS data to the public(see California), and other tangents are already on their way
to shaping that change.

Change, yes. Eliminate the need for consultative services and expertise, no. Expertise cannot be replaced by technology and big buckets of data. It sounds self serving, I know, but I have no doubt that many of the issues and problems we assist people in getting through could not have been accomplished by those clients on their own.

> Gary Keller graduated with a bachelor’s in real estate, and even he admits that he didn’t know what in the world he was doing when he started out.

What’s missing in our industry today is mentorship. The old pro taking a young chicken under her wing and personally teaching the business. Most of that has been replaced with what we call “training” and “education”.

Training and education are great for sharpening the sword, staying awake and alert to the nuances of the industry and the business, learning the particulars of law changes, etc. But nothing substitutes for the personal, one on one experience that can be gained from a mentor.

The one thing I’d like to see on a real estate license final exam is that a new agent MUST be able to write an offer without mistakes. You won’t believe how many cannot, even after years in the business. And I’m not kidding. This one requirement alone would prevent many agents from obtaining a license.

When the market is hot, and we represent a Seller, we never let the seller sign anything until the buyer is completely done. This means we must “reject with an invitation to resubmit” offers. In other words, I’ll tell a buyer agent, “the seller does not accept your offer as written, but if you make the following changes and send it back, and nothing better comes in before that, the seller will give very favorable consideration to the offer”.

I’ve dealt with buyer’s agents who were absolutely incapable of writing the offer up properly. Each time there is still something wrong, missing or ommitted that prevents our seller from being able to sign it as a “done deal”. By about the third try, we’ll go ahead and fix the offer ourselves, have the seller initial the spots as needed, and send it back to the buyer for final initials. I don’t like doing this in a hot market because it gives control of the deal and the timeline to the buyer, but at some point we have to get things moving or “deal fatigue” can start setting in. Of course, we also know all the while that the other agent is telling the buyer that we’re difficult to deal with, and NOT telling the buyer that they keep screwing up the paperwork and we’re just trying to help.

Steve

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Mare - 8 years ago

>> What’s missing in our industry today is mentorship. The old pro taking a young chicken under her wing and personally teaching the business. Most of that has been replaced with what we call “training” and “education”.

AMEN to that! When I signed on, this was what I thought ‘training’ entailed, and I made it very clear when I interviewed that I wanted my hand held (i.e., go on listing appointments, see a closing, etc.). I wanted to do these things to get some ‘hands on’ experience for the process. I wanted to apply what I had learned in the classes and see it in action so I could build the confidence in knowing my job, rather than adopt the ‘fake it ’til you make it’ mentality. The training is about prospecting, and while that’s important for obvious reasons, it seems like putting the cart before the horse. Finding an agent to shadow hasn’t been an easy task, either. I have volunteered to help with paperwork, run errands, or whatever in exchange for learning, but haven’t found anyone who would like to adopt a newbie (although agents don’t mind handing out open houses, and I do appreciate that).

>> The one thing I’d like to see on a real estate license final exam is that a new agent MUST be able to write an offer without mistakes. You won’t believe how many cannot, even after years in the business. And I’m not kidding. This one requirement alone would prevent many agents from obtaining a license.

Actually, I think they should kick it up a notch and give a separate exam just for the contracts.

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Mare - 8 years ago

>> Thank you Steve, for having the integrity to post my last reply. I would imagine some agents would feel it derogatory,
and delete it.

FYI (this post wasn’t up before I responded, otherwise I would have replied) – your post wasn’t derogatory. I think what you said was pretty much right-on.

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scott - 8 years ago

I think much of this can be attributed to the nature of the real estate broker today. I’m no kid, and I remember when
the local agencies in the Chicago south suburbs I grew up in during the 70’s were small, mostly unaffiliated with franchises,
were there for decades, and very ingrained with the area, sponsoring little league, charity drives, and floats in 4th of July parades. Several brokers wore two hats, and were former/current politicians.
Flash to the future……franchises began to slowly take over in the 80’s, which should really be known as the era of
the “great franchise takeover”. By the early 90’s it was rare to see any independent long established little brokers left,
but a few were still there(for laughs, I worked for a old-time one for a spell that had agents literally 30 years in the biz,
who just worked there so they could smoke in the office while working! The old charaters were worth a bunch of laughs).
By the late 90’s, they were just about all gone. Try finding a sole standing one office non affiliated anywhere now…..
outside of rural areas, they are ALL gone.
My main point is, thats why you have no training now. All the consolidation has brought mega-offices, with far too few
resources to mentor. When I started out at little VerHagen real estate in South Holland, Ill, I was treated as family.
Indeed, it was almost literally an extended family, as the father and the two sons were among the top agents.
It was sweet working there……the group of agents was so helpful, it was beyond belief. Almost like a little kid surrounded
by loving relatives at a party, you had15 old pro agents happy to help you out anytime, and really getting a kick out of helping you. I remember this old character, Mort, even opened up his prized hard liquor stashed in his cabinet and
poured a shot to welcome me in his office(I won’t get into why he kept it there, but I think he prob was an alcoholic,
but I sometimes see the wisdom of that stash when my deals are driving me nuts!)
Okay, so the point is, they taught me everything I knew, even wrote up my first contract word-for-word with me, and attended my first closing. Try getting someone like that now, in these “body count” offices with 85+ agents. Its a numbers
game. They pour 2-3 times the capacity of the office, double everyone up, and figure they will hit paydirt with 10-20%
of the group. That’s sadly the way it works now. No new people are even recognized in the office, much like ghosts,
and hardly feel at home in the office.
How can we expect new agents to perform reasonably in this environment? Sadly, this is the situation we are stuck with,
and its all from greed. The greed that consolidated all into franchises, and all offices into a mega-office concept,
piling agents on top of each other with sheer numbers, like Aushwitcz. Again, its simply sheer greed by the majors,
looking to consolidate nationally, spare costs of training and proper desk space(piling of two to three on one desk),
and supplies as well.
If you want to blame someone for that bad agent you deal with, blame the majors………………

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After you dig you have doug - 8 years ago

Caveat emptor! The real estate business is compensation on transactions, just as virtually all sales professions. Within the sales profession we have the good, the bad and the incompetent. Unfortunately incompetence runs rampant in the real estate industry. How do I know this? I used to be one of those incompetent ones!

Fresh out of real estate school with a license in California (some believe a native Californian birthright), I was clueless and went to work for a company that preach prospecting (the necessary evil.). My first listing, I had to use the client’s home phone to call into the office so someone could walk me through the listing agreement. Fortunately, I learned quickly probably at out of pride but, many never did. I was dismayed by the business and eventually left after four years.

Fast forward 20+ years… nothing has changed. As then, most of the agents aren’t concerned what is best for the client, it’s about closing the transaction. I lived in Southern California during the last great boom and it was wild! As another writer said…. the egos! I personally knew of competitions between agents to see who would sell their listing first on the same block, hammering the sellers for price reductions or additional improvements to the properties.

Yes, I’m a So-Cal transplant and have lived in Austin for less than a year and have had four transactions involving agents in Texas and some were good. Texas real estate contracts and laws are loose as a goose, in comparison to California. You would weed out a third of the agents by mandating California’s contracts and laws. I also believe that all Txdot engineers should have to do an internship with Cal-Trans for two years on how to build roadways too…. I digress…

You can’t mandate ethics and incompetence is free!

It is what it is….a tough industry where “ethics” is just another four letter word… well that’s what I heard from someone whom calls themselves a Real-la-tor…… Go figure!

Regards,
D

BTW: Great article!

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Steve - 8 years ago

> Fast forward 20+ years… nothing has changed. As then, most of the agents aren’t concerned what is best for the client

I would change the word “most” to “some”. When I’m in the office (our KW office is THE largest real estate office in the WORLD with over 800 agents) and listening to the discussions in the comupter room, and the conversations in the halls, it’s never about trying to pull one over on someone. It’s always about getting things done in the best, most professional way possible and taking good care of our clients. That’s the culture and mindset I’m familiar with.

But you’re right, it’s a tough business. It’s also a fun and satisfying career. I have to hold back on some of what I can share, but the problems we walk people through are sometimes numerous and very difficult. So it’s also an occupation where the value of an agent is not always obvious or acknowledged, because a lot of what we do is behind the scenes.

Steve

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