The Money Tree

Two days ago I alluded to one of the worst transactions in my career.  There are two that tie for first place, but I'll only talk about one in this post.  My client was looking for a 4 unit or larger rental property which he intended to owner occupy.  We found a beauty of a 5 unit with 3 units renting at $700 and 2 at $500 and all utilities except water paid by the tenants.  The price was only $135,000!  That translated to a money tree!  Little did either of us know the hard work it would take to bring this transaction to close.

The listing was held by an independent broker whose name I won't mention (although I'm sorely tempted!).  Mr. Broker began his obstinate behavior when I presented the offer.  "I'm sorry, but that offer is unacceptable because the property is listed at $150,000 and that's too low."  I checked the listing.  The listing sheet said $135,000.  "Well, I just didn't get around to increasing the price when my clients told me to."  (Error 1:  Laziness?)  The new price was discussed with my client and he agreed to a sensible discount from the "new" list price only because it still made financial sense.  Second attempt was made to present the purchase agreement to the sellers and their agent.  Mr. Broker declined.  He doesn't do personal offer presentations!  (Repeat Error 1).  My second choice was to deliver the purchase agreement personally to the listing broker.  I expected an answer within 24 hours which is pretty typical of our market.  One day, two days, phone call, one week, phone call, two weeks, phone call . . .  A full month passed and no response to the offer.  I kept pursuing.  "Why the delay," I asked.  Well, the sellers had moved and when he mailed the purchase agreement to them for signatures (say, what?!) it went to the wrong address and then came back in the mail!  (Error 2: poor communication with the client).  In the course of this explanation, Mr. Broker said the sellers are difficult to communicate with since they don't speak English (Error 3: disclosing personal information about the client is a violation of fiduciary duties.).  I'm aghast.  IF they don't speak English why is he mailing the purchase agreement to them instead of meeting with them and a translator to go over the terms of the contract?  (Error 4:  keep the client's best interests above the agent's).  Another month passes with lack of follow through on the part of the agent. 

Finally, I get the call that the offer had been countered and would I like to meet with him to go over it?  My client (who is an attorney) requested to attend this little meeting to finalize the counter offer with no more stalling.   In the meeting, Mr. Broker  told  us that he  "trusts my client more than he does his own" and that his clients are criminals, that one may be a murderer, that it's impossible to communicate with them because they don't speak English, etc.  He topped it all with a racial slur!  (Error 5: compromising the client's confidentiality, compromising the client's best interest, planting doubt about the neighborhood.  Error 6: Racial slurs.)  The counter was signed so we moved to the inspection.  We had 5 days to complete the inspection.  I requested the time and got no confirmation (Error 7: no communication with the cooperating agent).  As the clock ticked away, I persistently called for the appointment.  Mr. Broker kept using the excuse that the sellers spoke no English.  Finally, he told me to set it up myself and gave me the phone numbers (Error 8: gave me personal information without the sellers' permission.) to schedule the inspection.  I chose to fax the seller with the requested inspection time.  Five minutes passed before I received a phone call from the seller with confirmation for the inspection time! (Error 9:  lazy agent?)  We proceeded through the inspection and repair negotiations to a finalized contract.  We were on our way.  A total of 3 months had passed.  It took an additional 2 to finally close on the property.  In the process I made pages of notes on my conversation log.  This is a normal practice for me, but I also expected my client would want to pursue ethics and agency violations after the close.   The sellers were very gracious at the closing table and were not too difficult to converse with.

After the closing, my client and I discussed Mr. Broker's violations.  My client chose to move on rather than file a complaint.  He had accomplished his goal of "getting the house" and didn't want to waste anymore time on this particular transaction.  I knew, too, that had we taken action, Mr. Broker would only have gotten a slap on the wrist for his misbehavior.  To this day, when I see a listing by this broker, I hesitate to include it in a tour.  I really don't want to repeat this same nightmare again!

Comments

[Norm Fisher]

Wow! What a story. It's amazing that guys like this can even find clients that will work with them. I love the part where his "doesn't speak English" client calls you. They must have one of them new-fangled translator phones. :) Loved it Bonnie!

[Bonnie Erickson]

Thanks, Norm. My tenacity won the deal and that's the apartment that I now own because my client sold it to me 5 years later! I won twice!

[Jim Cosgrove]

One good thing that may come from a downturn in the market would be for a lot of the incompetent brokers to get out of the business. It is frustrating for those that do their job properley and with a degree of professionalism to have to deal with the slobs. It's really frustrating when they pick the "low hanging fruit", get a decent payday and give all brokers a bad name.

[Bonnie Erickson]

Norm, it would be nice if ONLY the incompetent ones left the business, but that won't be the case. Some good ones will fall by the way as well. The irony about dealing with "slobs" as you call them is that our ethics forbid us from bad-mouthing them to other consumers. All complaints are supposed to go to the Board and it becomes a he said, she said scenario. Or the incompetent agent is part of the good ol' boys club and the complaint is not taken seriously.

[Broker Bryant]

Bonnie, That was quite the transaction. Good thing you had a very patient buyer. This Broker is definitely in the wrong business. Great job hanging in there and getting it closed.

[Bonnie Erickson]

Thanks, Bryant. Did you notice that apartment is the one I bought 5 years later?

[Broker Bryant]

I did. Funny how things work out like that.

[Trisha]

That's awful! But, I'm so glad to hear you won out in the end! Congrats on buying the property yourself!