Anyone who has ever done business for themselves knows that you rarely get 100% transparency in most transactions.
Business people have their best interest in mind, even if a win-win would make things better for everyone.
Don't get me wrong, there are honest people out there going the extra mile, but they are not the majority
Maybe they should be, sometimes you can be too helpful and honest. I'm guilty of it and it does lose me deals sometimes. I'd rather have the goodwill I suppose.
No Good Deed Goes Unpunished
Since I have gotten my real estate license for the purpose of selling some of my rental properties it seems I have stumbled into the retail side of things for people in my network.
Found myself in four deals, two of them are not closing because of me honestly looking out for folks.
I'd like to share one of them.
Figure out the financing yourself
Listed a property for an investor in my community I know. Had an agent bring his buyers, a soon to be married couple that needed to close and move into a property by March 1st.
They wanted to see anything I could show them. So I should them a three bedroom the investor also has that will be listed in a few weeks.
They fell in love with it, made an offer and after a little negotiation they and my seller agreed on a price.
All the information they need to know is in the listing. Financing options, etc. etc. However, just by the talk of their agent I could tell they were doing a low money down or FHA loan.
The condo community I leave in doesn't qualify for those loan since it doesn't meet minimum reserve criteria set by the state that the bank use as a benchmark.
This means you need to be 20% down, but with a little creativity can get away with 10%. I know a kick ass mortgage broker that helps people get in their homes in similar situations.
Anyway, they contract had been written up and all I had to do is get it to my seller to sign, but I asked about their financing and the restrictions there are. The buyer's agent was clueless about it, big surprise.
So I told them to verify with the mortgage broker if they could actually get financing and then call my broker as well cus if she can't find a way it is not happening.
Long story short, their broker said it wasn't possible and they disappeared frantic to find another place.
What, sadly many agents do instead
Have seen this first hand. Since me, the listing agent disclosed the loan "types" in the listing I did my job. Why tell them anything else, being that once they go under contract and get the inspection and are emotionally and financially invested then they will do whatever they can do get the financing.
If they need to borrow money from a family member for down payment, things like that. However, there is no guarantee, they could also just not qualify and get any help and then have wasted two weeks or more and now be screwed with just a couple weeks to find a close on a place, which isn't possible when financing with a regular bank loan.
Options
A.) say nothing and see if the 50/50 at best chance of the deal closing comes to fruition. If not this couple about to get married is screwed.
B.) Do what I did and let them get out in front of it and most likely lose the deal.
The fun part is....
The investor decided he is going to keep the three bed as a rental instead of selling it now. Thus, I lost the potential commission altogether now.
No good deed goes unpunished.
Published by ScaredyCatGuide
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I know and empathize all too well with being honest in your dealings, @scaredycatguide.
I've yet, though, to regret being honest over greedy. A clear conscience is worth more than whatever money I would have made, and then felt guilty taking/spending/saving.
It's good to know that there are people out there who are still striving to be honest, especially in the real estate business. The couple of times I've dealt with an agent, though, have been good, so I might be on the lucky side with that.
My wife has a friend who is trying to move back to Oregon from Florida while finding a property to buy. She thought she had a condo lined up and flew in from Mexico City (where she is visiting her daughter) last minute to look at the condo. She'd previously had someone go look at it who said it was worth starting the paperwork for but she also wanted to see it before going any further.
Concerned that the property might get sold at any time (she was second in with an offer, but it was cash and not contingent on selling her house while the first offer was as well as getting a loan), she made sure to call her buyer's agent to see if the place was still for sale. Her agent told her yes. She got on the plane. From what she was told, the system updated sometime while she was on the flight (the owner accepted the first offer without giving her offer 48 hours to look over).
So, she ended up signing paperwork to put her in second position in the event something fell through with the other buyers. In the meantime, her agent wanted to know if she wanted to sign intent on another property similar to the one she was interested in. At first, he said it was identical, but in subsequent contacts about it, he discovered that it wasn't exactly the same. Appliances and counter tops were not upgraded, and the place would need new carpeting, which meant it probably needed more. She wouldn't be able to see it before she went back to Mexico City, though, because the condo wasn't for sale yet and it was occupied by the current renters. She went ahead and signed up for second position on the first property.
It was just strange how this information had to come piecemeal, rather than being a part of any record he might have access to. He apparently ended up asking another agent who had been by to look at the property. Otherwise, he wouldn't have known even that much.
Yup, I have had some similar adventures. Mine was with a short sale property that the seller was being secretive with his agent about. Long story short, after months of working to get the bank to approval the short sale and being in between homes waiting; the seller got a loan modification and kept the place blindsiding his agent and me. Apparently buyers/sellers can be just as bad.
Wish you were operating in my neighbourhood. Sure could use an honest real estate guy at the moment :)
They are hard to come by man Its why I got my license. After going through four of them, three of which were "friends."
It's painful, slow, and can seem negative - but in my experience, (if it's something you're looking at long term) then your reputation for honesty will pay itself back tenfold...
Just watch out for those less honest to stab you in the back - for they will surely try..100%.
Losers hate winners...
I agree man! Then again this is just a help and friends and fellow investors thing. My license if mainly for my stuff so maybe I should be short-sided and greedy ;-) I kid. lol.
hopefully you invested in your reputation and more business will follow. Unfortunately, a bird in the hand is worth two in the bush.
Yep, I believe in good will.
Stay true to who you are, learn from the experience and tweak things moving forward.
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Keep doing the right thing. Honest people like you and I will get our reward at the back end.
Yep, karma is a thing.
It happens many times but I can assure you that those that think selfishly first end paying at the end, whether it be reputation or actual being liable for their actions. I have always looked to remain honest and have a clean conscious as you never know when or how paths will cross in the future.
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