My experience with dishonest real estate agents....

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I never had much interest in Real Estate many years ago. I served in the US Army for nearly a decade, before I was honorably discharged, and owned a successful summer camp for children. (Actually, I still do own it. Take a look at Reality Ranch Camp if you want to learn more about my camp.) My wife dibbled in stocks, sold stuff on Ebay, and we lived comfortably with our four children. Being a military family, we always lived in base housing, or rented our homes. When it finally came time to purchase our first home, I learned a lesson that I'll never forget. This lesson is what motivated me to become an Arizona Real Estate Agent.

Like most people, my wife and I looked for properties online until we found a few that we were interested in. We contacted the phone number on the listing, which put us in contact with the Real Estate Agent who was listing that property. I'll call him “Harry”, as in…. Dirty Harry, in this case. I was disappointed to find out that the home we were calling about had already been sold, but felt better when I found out that Harry would be more than happy to find us another one of “his properties” for free! It was not until much later that I found out why he was pushing certain listings on us; if he sold them to us, as both the seller's agent and the buyer's agent, he would make double the commission! I could see why he was so motivated about these particular properties, but I still wanted to continue looking. I'm not sure why; perhaps it was just a gut feeling.

After what seemed like forever, my wife and I finally found the home of our dreams. It was beautiful; located in Cave Creek, and we were very excited about it. Harry told us to sit down with him and “write up an offer” right away, so that it didn't get sold out from under us. We met that day, visited the property and decided to write up an offer. Dirty Harry began to write up the offer, using the list price (asking price) on the offer form, without even asking us what we wanted to pay for the home. I balked, and told Harry that I wanted to negotiate on the price. “Negotiate?” he cried…. “You will insult the sellers!”. I insisted on offering a slightly lower price on the home, because I rarely pay list price for anything. As he continued to write, my wife began asking questions of our agent, whom we assumed was looking out for our best interests. “How do we know that this price is a fair price?” Harry told her that it has to be a fair price, or the bank won't approve the loan. That made sense… sort of. “How long has it been on the market?” she asked him. Harry was getting irritated, but continued to write while he answered her questions. “This is a new listing.” I don't know if it's because she is from New York, or just her personality, but if there's one thing my wife hates, it's the runaround. When Harry sidestepped her question regarding how long the home had been on the market, she changed her tone slightly. My wife said, “Let's start again. Please get a new offer sheet, Harry, I want to change the price that we are offering.” She lowered our asking price by several thousand dollars. Harry leaned over, and as if telling us a huge secret, told us why he recommended against lowering our offer price. “If you purchase your home for too low of a price…” he hissed, “It will automatically lower the property value of your home before you even move in. You will lose value in your investment immediately. It's actually best to overpay a little, to boost the value of your home quickly.” Before you laugh too hard, please consider that we were young, and it was our first purchase.

I'm not sure exactly what happened next, it's all still a blur to me, although I do remember my wife showing her teeth and clenching her fist on at least one occasion. Our offer price dropped even further, and Dirty Harry told us that we were being ignorant, and that he barely felt comfortable bringing this offer to the seller's agent. My wife, through clenched teeth told him that she didn't care as much about his comfort level as she did our mortgage payment, which we would probably be paying for the rest of our lives. Later that afternoon, our offer was accepted, with conditions, of course. It looks like we didn't insult the sellers or their agent after all, contrary to Harry's beliefs. My wife was right, and was being very smug about it.

We continued the negotiation process, ordered our home inspection and it came back with mold. My wife and I, already haven fallen in love with the home decided to negotiate mold treatment and removal into the purchase contract. The terms were agreed upon, and the financing game began. To make a long story short, the bank felt we were over paying for the home, and was not willing to finance the full amount. We were surprised to hear this, as we had already negotiated heavily from the original listing price. We informed Harry, and he told us that we were getting a “great deal” on the house, and that we should find another bank. Things suddenly did not feel right, although we couldn't put our finger on what exactly the problem was. Harry kept asking us what our “magic number” was, and we told him that our magic number was the lowest price that we could pay for the home. Later that night, my wife and I had a heart to heart talk, and with the limited information and research that we had available, we came up with the price we were willing to pay, and not a penny more. We shook on it, and informed Harry of our decision.

He called us back moments later, and told us that the deal was off, and that we had insulted the sellers. I reminded him that the home wouldn't appraise; a very good indicator that we were paying too much money for the home in the first place. Then Harry made a grave mistake. He told us to take it or leave it at the current price, or lose the deal. I told him that there was no possible way that this deal would fall through over $3800.00. When you're talking about a home that is worth nearly a half a million dollars, $3800.00 is peanuts, quite frankly. Harry and the seller's real estate agent (I'll call her “Leecha” were making nearly $20,000 in commission on this sale, and could have easily “absorbed” this in their commission, but refused to do so. Harry's gamble ended up costing him the sale of the home. We later drove to the sellers, to speak with them and find out what had happened, as we had come so far, and were shocked that they would refuse and cancel our purchase offer. We found out that neither Harry nor Leecha had even presented our offer to them, or they would have accepted it immediately! The sellers cried, my wife cried, and we could not believe what had happened. By that time, we felt the deal had gone sour, and that it just wasn't meant to be, and we decided to take a break from house hunting for a while. We were horrified to find out that Harry had done nothing to represent us as his clients. Real Estate Agents have ethical and legal obligations , and apparently, Harry had none of them in mind. He, and the seller's agent were so greedy, that they blew a deal over less than $2000.00 each . Why would anyone lose $20,000 over $2,000? It seemed incredibly stupid to us. It was even more shocking to find out that he was supposed to have provided us with comparisons of similar homes that had recently sold in the area, so that we could compare prices and make an educated offer. We considered filing a complaint at the time, but we were so heartbroken over the house deal that fell through, that we made ourselves our number one priority.

I did some reflection over the next few days. As the head of my household, it was scary how close I had come to committing us to financial disaster. But I had never purchased a home before, and I didn't know anything about comparing prices and market values. I trusted my real estate agent, and unfortunately, he was a terrible agent. So I got educated. I went to Real Estate School, and got my Real Estate License and acted as my own agent when we purchased our very first home. I could not believe all of the tools that were so readily available to real estate agents, and wondered how many other people had similar experiences that I had with my home purchase. Since then, I have helped many people make safe, educated home purchases, and I negotiate on their behalf aggressively all the way till the end. Unless the seller or their agent is absolutely unreasonable, my negotiation techniques save my clients thousands and thousands of dollars. Do I make as much commission as I could? No. But at least I can look at myself in the mirror each morning when I wake up, and know that I'm making an honest living, while helping others. I doubt Harry and Leecha can do the same. If you are ready to engage in “real estate purchase warfare”, don't go to battle unarmed. Take me with you.