Ethics in Real Estate – Yes, They Exist!

For all the agents out there – so many times we hear horror stories about others in the real estate industry, especially in hard times like the Las Vegas real estate market has just struggled through. Agents taking advantage of clients or stabbing each other in the back to make a living, lenders charging exorbitant fees to uninformed but credit worthy borrowers, appraisers doing a “favor” to get an appraisal up to the purchase price, etc. Actually this type of behavior happens in all industries, but the real estate market in particular is spotlighted because of the high dollar amounts involved.

Well, I wanted to share the “good” side of the industry for a change. There are a lot of great agents and lenders out there who really watch out for their clients and each other, but we rarely hear praise when it is well deserved.

Recently one of our agents, Maxine, had an international client that was coming into town to look at Las Vegas homes for a vacation retreat. Before the client got to town Maxine sent him hundreds of properties to review, gave him articles about various neighborhoods to read, and went over long lists of questions about everything from taxes to motor vehicle registration. She even went out and found an extended stay hotel and made a reservation for the client, picked him up at the airport and helped him with his rental car. All this before they even went to look at a single property.

The next few days were spent learning the town and refining where the clients wanted to live. The clients finally settled on Lake Las Vegas, and Maxine made sure they had all the latest information on the litigation and HOAs before deciding on a couple of Las Vegas condo units they were interested in. Both of the condos were bank foreclosures or REOs, and the clients made an offer on one. After days of waiting around for an answer and no word from the listing agent, the clients were frustrated and angry. When they finally received an answer, it was that the property had been sold to someone else.

In the meantime the clients had been reading in our local newspaper about how the REO agents were “playing games” with the offers they received, trying to sell their own listings in-house. Even though these clients adored Maxine and appreciated all she had done for them, they insisted on going straight to the listing agent for their next offer, even though Maxine had shown them the property several times.

And here’s the good part of the story – the listing agents happened to be Leslie and John Carver of Prudential Americana (and also in our office) who handle a large volume of Las Vegas foreclosures. In order to avoid any conflict of interest, Leslie never handles the buyers on her own listings. She refers them out to a “buyer’s agent” to write a contract and represent them. But these clients called her several times and flatly insisted on meeting with her. Finally Leslie agreed to meet them, figuring that once they got into the office she would still turn them over to a buyer’s agent.

When the clients got to the office, they again insisted that Leslie write up the offer even though she explained repeatedly that she would have a buyer’s agent handle it for them and that everything would be fine. But they buyers refused, and finally said to Leslie, “If we wanted to use a buyer’s agent we would use Maxine Sutton of the Tonnesen Team. She’s an excellent agent and she has done everything for us, but we don’t want to miss out on this property. We read what is happening in the newspaper and we will only deal direct with the listing agent.”

Now Leslie knew that these buyers were actually Maxine’s clients. But she also realized that they were not going to be satisfied with anything less than her writing the purchase contract for them. And in the best interests of the seller, the offer needed to be written. So Leslie wrote the offer, but IMMEDIATELY contacted Maxine to let her know what was happening and assure her that if these buyers were successful in securing the property, Maxine would be paid.

Would Maxine ever have known that these buyers went around her to get this property? Probably not. Could Leslie have kept this transaction to herself? Probably yes. But Leslie has such high standards that even if the buyers had not loved Maxine, she would have made sure that Maxine was taken care of.

This story has an even happier ending. The buyers got their property, Maxine was rewarded for all her hard work, and Leslie had the immense satisfaction of knowing she acted to the benefit of all parties in the transaction. Everyone did their job, always keeping the client’s best interests at heart. And that’s why I love working at Prudential Americana. Leslie Carver is a true gem, and the other agents in the company share the same high standards. That’s the way we roll with real estate.

Las Vegas Real Estate Market Sees Multiple Offers Return

Dear Readers,

Below is a letter that I sent last night to an Australian agent who has clients that want to buy Las Vegas real estate. I had sent her some “best buy” Las Vegas MLS listings two weeks prior and her clients were supposed to respond immediately. But they procrastinated and lost out on the home they wanted. I realized as I was writing my response, that it was a great lesson in timeliness and patience for any buyer that is looking to purchase in this crazy market.

Hey Jo,

Where you been, girl?! The property your clients chose already has a contract on it – actually they had multiple offers. It sold for cash above the most recent list price, and is due to close this Friday.

We are experiencing a HUGE surge in buying. You know the frustrating experiences you already had trying to put in offers? Well just in the past couple of weeks our market has gone officially insane. Everything decent under $150k is now getting multiple offers within a couple of days and averaging 3% above list price. By the end of March we had 80% more sales than last year at this time!

The listing agents won’t even present an offer now unless it is accompanied by either proof of funds for cash buyers (in the form of a current bank statement) or full loan approval for buyers getting Las Vegas mortgages. The banks don’t even care if the buyers are cash or getting loans – they are only looking at the bottom line since the mortgage buyers are fully approved anyway.

And just to make it even tougher, some of the REO listing agents are playing games with the offers and trying to sell them “in house.” Not what you wanted to hear, I know.

But we have so much pent up demand from first time home buyers: prices are affordable for the first time in years and our federal government passed a tremendous first time homebuyer tax credit. Plus the news is starting to report Las Vegas as one of the most undervalued markets again, so here come the investors once more!

I am right on the spot, and in order to get two properties in escrow for myself this week I had my offers out to the listing agents within hours of the properties going on the market, sight unseen. We actually bid on five Las Vegas homes to get two. They are both short sales, so I still have to wait for the banks to approve the shorts on the loans. (Oh, yes, I am definitely in buying mode myself. I really think we have hit bottom and will start to see a rise again by year’s end. Personal opinion, of course, but it feels right to me based on what I am seeing in the market.) One of the properties I bid on got THIRTY offers!

Anyway, long story short (too late!), first of all your buyers would have to send us their proof of funds in advance, and second they have to be ready to pounce immediately. Literally: we send you the homes, they pick at least two or three to put offers on within just a few hours and then email us back right away so we can prepare contracts. (ALL the banks have counter offer addendums, so the clients won’t ever have to worry about being on the hook for more than one property. If we got lucky enough to get a positive response from more than one, we would just pick the one we liked the best and reject the counter on the other.)

We email back the contracts along with the comparable sales info on the properties they have chosen so that your clients can feel totally confident that they are paying a reasonable price. They sign the contracts and send them back, and then we “present and pray.” We will already be working with a time zone challenge, and really only have perhaps 72 hours between the property going on the market (or having a significant price reduction to below market value) to offer presentation to be effective. And that’s because we truly are sending you the BEST listings.

The buyers should also be prepared to wire funds within one business day to the escrow company to cover the earnest deposit if they get an accepted offer. Very few properties will be completely turn-key – some handy work will probably be required, though there are enough that just require basic cosmetics. (Touch up paint, landscape maintenance, carpet cleaning, etc.) Remember, the lowest priced properties are all Las Vegas foreclosures (bank owned) or Las Vegas short sales – the banks are not making any repairs and are selling “as is, where is.” And most of the original owners were not all that happy about moving out.

If your buyers are truly serious about proceeding, we should get their current proof of funds first off. Then they need to commit to responding with a couple of properties they are willing to purchase within a short (few hours) time frame so that we can prepare contracts. And they need to know that they are probably going to have to bid over list price unless the comparable sales data indicates otherwise. Low balling worked when prices were higher and no one was buying. Now everyone is back in the game again.

Deep breath!! Did I put you to sleep with this novella? I don’t want to discourage your buyers, but unless they are prepared to be really aggressive it’s going to be hard to get them something good.

Cheers and looking forward to hearing back from you – quickly!
Diann

PS When I speak of Las Vegas real estate, that also includes Henderson real estate. It is a small valley and they run right into each other. Also, if your clients do want to go higher in pricing, there are some dynamite deals in some of our gorgeous Las Vegas golf course homes too!