Agents: Robbing Clients & Banks: How Real Estate Agents Are Making Things Worse

Not going to be well-received by those unethical real estate agents, there is a growing wave of agents who are in cahoots with straw buyers, are lying about the 'arms length' agreement between them and the buyer on short sales and REO's, and are 'freezing out' other agents to show their listings or even go so far as refuse to present all offers to the seller. This can amount to literally hundreds of thousands of dollars lost to the seller/investor.

Sadly, this behavior has become an epidemic: unethical agents are taking money from the pockets of banks and traditional sellers. Quite disturbing is that there is little most real estate brokers are willing to do to curb this behavior as they benefit from their agents representing both sides. It's not that some agents don't complain - it's that brokers and those that regulate our industry are simply turning a blind eye to the outright fraud being perpetrated by, unfortunately, many agents.

We are aware of agents that refuse to present all offers to their seller(s) - in violation of California Association of Realtors rules and regulations. (There are also REO agents that are not uploading all offers to the banks on REO (bank owned) properties.)

We are aware of short sale and REO agents that are representing both the seller and buyer, but hide their buyer representation by having an agent in their office put their name on the purchase contract and then demand a referral fee - then represent the seller in the flip of the property - at the expense of the seller and the bank/investor in a short sale and the bank/investor in a bank-owned (REO) home. (We have also heard of agents participating in the profit from these flips, in violation of many rules and regulations.

We are seeing agents that refuse to work with other agents, instead insisting that, for their offer to even be presented, the buyer must use the listing agent. This is patently against the California Association of Realtors rules and regulations. But, even when reported, rarely is an agent disciplined over this egregious behavior. (This is a misunderstood subject in that many sellers believe they can maximize their selling price by allowing their agent (listing agent) to represent the buyer also, Truth is, rarely does this work out in the favor of the seller - but it works out well for the agent as they get 2 commissions - but many times at the financial expense of the seller.)

There are agents that will not return calls from other agents to schedule appointments to see their clients' home, don't show up to open the door of those homes that require the listing agent be present, or simply refuse to allow the home to be shown by any other agent - with the express intent that they (the listing agent) represent the buyer also - many times at a lower price to the seller since there will be a much lower number of potential buyers that have seen the home and a much lower number of offers submitted.

Is there any wonder why real estate agents are held in such low regard?

(If you experience any of the above, or have questions about who you're dealing with, please contact the California Department of Real Estate. The form to open a complaint is a PDF and can be found here)