My father failed at only one thing – retirement! After retiring from running the La Crosse Country Club as the Head Golf Pro for about 35 years he ended up moving to Arizona and working a golf course in Phoenix during winters and another in La Crosse during the summer. In Phoenix he is a Player’s Assistant at Encanto Golf Course, the third oldest golf course in Arizona. In La Crosse he is the shop manager for a day or two per week, when the owner was out.
As I was finishing my degree at Ottawa University in Arizona, I would find time to meet him for lunch during the winter months. I’d meet him at Encanto Golf Course and wait for him to finish his daily duties. Something was always going on around the golf shop, on this particular day he was called out to take care of some issue on the back nine, so I waited around until he was finished.
After a few minutes of waiting this guy, who had been previously wandering about prior to his tee time, introduces himself as a friend of my dad. We talked for a few minutes when the topic of real estate comes up. I explained,
“I wrote mortgages for a few years here in Phoenix, before I went back to college that is.”
He proceeds to tell me about his fabulous career as a Realtor®. He was a fantastic Realtor® with all the proper ethics, and he gets the biggest deals done (Realtors are people that car dealerships found too dishonest). He could get all the deals done, that other Realtor® fail to close. He had at least a dozen multi-million dollar listings at that moment. How a Realtor® with that much importance and all of those huge deals floating out there had time to hang around a public golf course was beyond me.
I love the euphemisms Realtors use in the listings:
He wanted to focus on a recent big deal he just completed. A friend of his had this empty house just sitting dormant in his neighborhood. The Realtor® noticed it every time he went to his friend’s house. He finally inquired about it, and his buddy explained to him that an elderly couple from Illinois purchased it a few years back as a winter home. They came down to the valley the first winter, and the next summer the husband man died while back in Illinois. She never returned to the Arizona house. The house was paid for, and the wife continued to pay the taxes, utilities, and whatever else was needed, but she just never returned. Supposedly her personal support network was back near Chicago.
Well, the Realtor® smells a free cheese giveaway and calls the old lady up to offer his services as a professional Realtor®; to help her unload the house. Sure enough the old lady had no plans or desires to return to Arizona. All of her family was in Illinois, and she wanted to remain around them. She was indeed interested in selling her winter home.
The Realtor® offered his services to sell her home for her, smelling that commission before he even called. He asked how much she wanted to get for the home. Mind you this was April of 2005 - smack at the height of the real estate boom , and the lady had owned the home free and clear for nearly five years. The old lady replied,
“I don’t really know? We bought the home for $175,000 five years ago. Do you think we could get as much as $200,000 for it now?”
In the red hot Arizona real estate market homes were appreciating as much as $10,000 per month. It was such a fast moving real estate market my brother-in-law listed his home and had an offer three hours later for $5,000 over asking price, to prevent him from looking at other offers. His house had offers before the listing even went out to the MLS.
People were putting money down on new construction condos and single-family homes only to sell them the day construction was finished for big profits. People also put offers in on spec homes (the first home in a development built, then used as an office to sell all of the other units). If you put $5,000 down you locked it up as yours, then you’d wait a couple months for the development to sell all the houses, then the builder would fix the house up to look like a house instead of an office to complete the transaction. As soon as the purchase was completed you could sell it for double or triple the original purchase price. A five thousand dollar investment (the earnest money) would end up netting hundreds of thousands of dollars. Nice rate of return!
Back to the crooked Realtor® who had already made a verbal offer of his services to help the old lady sell her home, binding him to a fiduciary duty to represent her. After hearing her uncharacteristically low offer, he then offered to purchase the home himself, and save her a few thousand on commissions. An ethical Realtor® (if they exist) would have explained to the woman she could easily get a lot more for the home. The old lady accepted his offer, and he started to prepare the paperwork right away. With Fax machines and FedEx it's pretty easy to quickly complete a purchase and finish the transaction - even across state lines.
The Realtor® told me as soon as he got off the phone with the elderly woman, he prepared the listing then went over to place a Real Estate Sale sign in the yard to start stirring up interest. This was before he even faxed the contract to the elderly woman back in Illinois. The listing was on the Multiple Listing Service (MLS) for him to sell the home, before he even completed his purchase.
He set up escrow and financing, and finished the purchase 3 days later. In the mean-time the Arizona market was so hot he was taking offers on the same day it listed. As soon as the property was officially recorded (as a public record) in his name, he accepted an offer for $475,000.
At this point I was mad enough to hit the guy. I really wanted to knock his lights out; except he stated that he was a friend of my dad. My dad frowns on me punching out his friends. I still hear about the time I drove a golf cart with an old friend of his through the sprinklers on a golf course back in Minnesota when I was 10. He didn’t allow me to drive carts for another two years. So punching this cretin out wasn’t going to fly.
The Realtor® wandered off, probably to go hide under some rock. My dad finally returned from whatever he was doing out on the golf course. I asked him about his friend the Realtor®. I let him know I wanted to knock him out. His reply was,
“He’s just a guy that hangs around here and asks too many questions. I wouldn’t care less if he got hit by a truck!”
I told him the story about the old lady, and my dad said,
"That jackass needs to be punched in the head, I'm not recommending that you do it, but whoever does it would get in much trouble. I'll make sure his story gets around, so we can black ball his ass from ever getting a tee time again."
He was still trying to keep my out of jail, so he told me it would be a good idea if somebody else did it. It was advice like this that has kept me out of jail my whole life!
Why does this still steam me so bad? My grandmother had only recently passed, and my mom still lives in her townhouse in Nevada. Somebody could have done this to either of them.
When the Realtor® offered his services and she accepted, they had a legally binding verbal contract (verbal contracts have been upheld in courts). He had a fiduciary duty to help and assist her with the sale of her winter home. Once he found how little she thought the property was worth he took advantage of the situation and screwed her hard. He would still have earned a nice commission if he just played fair. 6% of $475,ooo isn't peanuts for a few short hours of work for a home that sold itself in that frenzied market.
I wish I could remember the guy or his name. He would be named on this site, and I'd do whatever I could to this story ranked high when anybody searched for his name. Imagine googling your REALTOR® to find out he's done something like this. Then if I could have matched it with the public records for proof, nobody would want to do business with him. If I knew the name I’d make sure he and his firm ended up on The Consumerist as a shady prick for all to beware of doing business with.
Why do I always make sure I place the Trademark ® insignia after Realtor®? Because the only people that can claim to be Realtors® are ones who join their private organization. Everyone else is just a real estate agent. Only a Realtor® has access to the MLS. Wouldn’t theSherman Antitrust Act consider this a barrier to entry of a market, and abuse of monopoly powers?
According to realtor.com; “The term REALTOR® is a registered collective membership mark that identifies a real estate professional who is a member of the NATIONAL ASSOCIATION OF REALTORS® and subscribes to its strict Code of Ethics
I guess Realtors® don’t have to follow the code to subscribe to it. It’s really just a code of suggestions with almost no enforcement. How does this code of ethics help the average Joe when a monopoly has so much power that you need to use them just to get a decent property or price? They let members run around conning elderly from their retirement nest eggs with no reprimand?
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