Realtor Question

[legion]

So back in April I listed my house with a no-service realtor. Paid a flat $500 up front, that was refundable at any time for any reason (so it says in the contract we signed).

No service really meant no service. The MLS listing was slapped together. Descriptions were all lower case with no punctuation sentence fragments. I immediately requested about 4 updates, it took two weeks to make two of them. The other two were never made. The realtor does not return phone calls, and replies to one out of every three e-mails with a single-word answer (the other two get no answer).

Fast forward to three weeks ago. I ran into another guy at work who had his house listed with the same realtor, but attempted to cancel his listing three months ago. He still has the lock box and hasn't gotten a refund. He's about to pursue legal action to get his money back. At this point, I was thinking of dumping this realtor anyway, and this cemented my decision.

So I sent him an e-mail last Friday telling him that I was canceling our contract and would like him to call me to arrange a time to pick up the lock box and drop off a refund check. I heard nothing.

After extensive deliberation, my wife and I decided to hire a full-service realtor. We drew up a list of recommendations from friends (both positive and negative) and worked through the list. The deciding factor was that we had actually met one of the realtors at some open houses and liked her.

So I set up an appointment and met with the new realtor. I explained my situation. Her response? "Oh, I take over listing from Jack all the time. This won't be a problem." She confirmed my fears that most of the realty community in Bloomington had black-listed his listings because he doesn't return phone calls--even when someone has an offer.

So now I have a new sign in the front lawn and a much better realtor. We have a game plan for getting the house sold and I'm happy with my representation.

I have zero expectation that I will get my money back from the old realtor. My questions are the following:

1) How long should I wait before filing a complaint with the local realty association? I don't want it to be too soon so that it looks like my complaint does not have merit.

2) How long should I wait before pursuing legal action? I'm thinking small claims court for the $500, but I want to give him a "reasonable" amount of time to pay.

3) Assuming I win a judgement, and he still does not pay, can I 1099 him for the debt? How does one do that?

[dad911]

Any timeframe for a refund in your contract? If not, cancel with a certified letter giving him 10 working days(two weeks) should be a reasonable time.

[nineball]

Originally Posted by legion

I have zero expectation that I will get my money back from the old realtor. My questions are the following:

1) How long should I wait before filing a complaint with the local realty association? I don't want it to be too soon so that it looks like my complaint does not have merit.

2) How long should I wait before pursuing legal action? I'm thinking small claims court for the $500, but I want to give him a "reasonable" amount of time to pay.

3) Assuming I win a judgement, and he still does not pay, can I 1099 him for the debt? How does one do that?

in real estate, just like everything else in life, you get what you pay for. around here when the boom was going on you saw NextHome signs all over the place as they advertised a flat $800 fee for selling your home, quite attractive when you consider normally you pay 7% of the sales price. the nexthome agents gave you every bit of service you paid for. the property would be listed on the mls, signs put up and that was about it.

being an appraiser i deal with agents on a daily basis. it is the listing agent's job (normally) to take care of things like setting up appointments, showing the house, advertising, etc. when you go with a cutrate company you get cutrate service. every nexthome deal i got was the same thing - call the agent who tell me to call the home owner directly.

as far as your questions....

1. most real estate agent contracts are for a 6 month period.

2. as stated, send a certified letter and give him at least 10 business days.

3. here in ohio winning a small claims court decision is just the start of your work. it is your responsibility to research the other party and find where the available cash could potentially come from - work, bank, etc. once you have that you can take it back to the court and they will attempt to help you collect but don't hold your breath. over the last 2 years i have won 3 small claims court cases (one for owed taxes on a property i bought, one for damage to personal property, one for an accident) and i have never been paid on any of them. small claims court is a joke.

i think in your case it the best thing to do would be to make a formal complaint to whoever is above this agent, be it an office supervisor/manager or someone higher if there is a parent company (like a regional supervisor). let them know how this agent is representing their company, but again don't expect much. they really don't care about you since you are only a $500 payday, and the agent cares less because he was already paid and won't be making any more cash off of you.

you have to ask yourself - is it really worth the time and effort to go after $500 when the odds are you will never see it?

[legion]

This guy owns his own brokerage and is the only agent.

I expected him to do nothing but update the MLS when asked (that was what he promised prior to signing the contract), and he didn't even do that.

Our contract was open-ended with a provision that either party could cancel at any time for any reason and a full refund would be issued--unless the house sold.

Letter is typed and going in the mail tomorrow.

[Porsche-O-Phile]

I still don't understand how anything an agent does is even remotely worth a 6% commission.

Unless she's hot and it includes free BJs.

[Christien]

Originally Posted by Porsche-O-Phile

I still don't understand how anything an agent does is even remotely worth a 6% commission.

Unless she's hot and it includes free BJs.

I agree. 6% on a 300k home is $18k! Even split between a listing and selling agent, 9k each is awesome commission for the work. At least, it was when we bought our home. Our agent was helpful with finding listings and setting up appointments, but the worst negotiator I've ever seen. We ended up negotiating the deal ourselves, by telling him what to put in the offer, despite what he thought we should offer. His total time with us would have been maybe 5 or 6 hours, including phone conversations. Other time doing research, maybe another 5 or 6 hours, max. 9k for 12 hours = $750/hour. Yikes.

And he wasn't hot. And I would not have accepted a BJ, had it been offered.

[rnln]

he probably does the same thing to hundred of people. If winning at court does nothing, then probably his tires, windshield, paint job cost him way more than $500 bucks.

[schamp]

file a complaint with the state realty commission.

[john70t]

Regarding the 3-3.5% commission:
-I had friends who closed on several homes a week back in the booming Bay Area market. Probably pocketed five figures a week.
-I have friends in boondocks Mich who work/drive their butts off to sell $50K houses once a month.

[nineball]

all commissions are negotiable but most people do not know that. the standard is 7% of the sale price, but that is split 4 way. 3.5% goes to each side (listing and selling), 1-2% of each side goes to the agent's office for providing things like office space, internet access, paper, copy machines, etc etc. in the end each agent only gets 1-2% commission from which they have to pay for annual license fees, mls fees, continuing education, promotional items (pens, cards, etc), operating costs like several thousands of dollars a year on gas alone, etc etc not to mention the huge number of hours, including nights and weekends, that are required.

on top of that 95% of the contracts i see for residential sales state that the 7% is only on the first $100k, after which it drops to 2% or less.

i am not defending agents because most i have met are idiots, but there are a lot of other factors at work that people never know about.

[Por_sha911]

I have friends that are realators. The buying and selling agents split the 6%. Then, the agent splits their portion with the agency (sometimes 60/40 instead of 50/50). That means that they get 1.5% for:
-driving around jerks who waste their time and gas and never buy
-take call all hours of the day and night
-work weekends & holidays
-sellers that are out of their mind as far as what the house is worth
-everyone knows 5 real estate agents that all have the same houses to choose from
-deal with mountains of govt red-tape, bank red-tape, and constantly changing rules and regulations.
and worst of all: deal with heartbreak when the whole deal falls through over two people that won't budge over $1k, bad credit to income ratio, a home inspection turning up nightmare problems, or buyers just getting cold feet and bail on the deal (the agent gets none of the security deposit).
Selling is not an easy job. Listing is an easy sale if you can get one that is sell-able.

[Por_sha911]

looks like nineball beat me to it.
p.s. love your signature

[TechnoViking]

Originally Posted by Porsche-O-Phile

I still don't understand how anything an agent does is even remotely worth a 6% commission.

Unless she's hot and it includes free BJs.

Intuitively I agree. Seems like an awful amount of money. However, based on my own experience, trying to FSBO results in a high probability of having your house not sell at all.

I remember Legion's thread where we all hashed this through pretty good months ago. Now here we are in September and the house is still unsold. You get what you pay for.

[john70t]

"on top of that 95% of the contracts i see for residential sales state that the 7% is only on the first $100k, after which it drops to 2% or less."

Good post. A lot of varience exists in the price/performance thing, and all parties should be satisfied at the end. There's a potential knucklehead in every bunch.

[rnln]

well, there are always black and white sides. Most agents I met are jerks, and idiots. I always thought they are all salesmen and salesmen are bad. If there is a good salesman, he is either poor or starving. BUT after I bought my house, I change my thought. The broker, who helped me to buy my house, is a very good person beside knowing his stuff well. Many times he stopped me from buying the house I wanted. Sometimes, it was hard to take the house I like off my mind, but after I did, I realized that he was right. To make the story short, he saved me lot of $$, $100k I am talking about, off market price. He is a Pelican.
If anyone around here in SCal is looking for houses, I strongly recommend to talk to him.

[legion]

That's it exactly it. It's a tough market right now, so we decided it was time to pay for some local expertise. We clearly weren't doing things right.

Turns out most of our problem was having our house listed with an agent that other realtors avoid...

[notfarnow]

Originally Posted by legion

I have zero expectation that I will get my money back from the old realtor. My questions are the following:

1) How long should I wait before filing a complaint with the local realty association? I don't want it to be too soon so that it looks like my complaint does not have merit.

2) How long should I wait before pursuing legal action? I'm thinking small claims court for the $500, but I want to give him a "reasonable" amount of time to pay.

3) Assuming I win a judgement, and he still does not pay, can I 1099 him for the debt? How does one do that?

File a complaint, but you may find that there are no repercussions, other than his own lack of success, for being lazy. I wouldn't lose too much time to that... upwards and onwards

I would go see him IN PERSON, with a copy of the paperwork and ask for the refund. I bet there's something in there that will prevent you from getting a refund after relisting with another agent.

The "no service" realtor thing is very intersting to me... we will probably see that up here within a year or two and I think it will really help consumers. I'd be intersted to hear about the "mechanics" of your arragngement. Was he to book showings, negotiate offers, etc? Or merely list it on MLS and have all inquiries & offers go through you?

As for being "blacklisted", it's hard to say. That does happen sometimes due to agent personalities, but the posted selling commission is also a significant factor. There is a local discount brokerage that posts 2 - 2.25% selling commissions. Their listings don't get shown much.

[944Larry]

Originally Posted by Por_sha911

I have friends that are realators. The buying and selling agents split the 6%. Then, the agent splits their portion with the agency (sometimes 60/40 instead of 50/50). That means that they get 1.5% for:
-driving around jerks who waste their time and gas and never buy
-take call all hours of the day and night
-work weekends & holidays
-sellers that are out of their mind as far as what the house is worth
-everyone knows 5 real estate agents that all have the same houses to choose from
-deal with mountains of govt red-tape, bank red-tape, and constantly changing rules and regulations.
and worst of all: deal with heartbreak when the whole deal falls through over two people that won't budge over $1k, bad credit to income ratio, a home inspection turning up nightmare problems, or buyers just getting cold feet and bail on the deal (the agent gets none of the security deposit).
Selling is not an easy job. Listing is an easy sale if you can get one that is sell-able.

Joe-you have a pretty good handle on the deal. My wife sells real estate and it's a full time job. I mean full time as in the phone ringing from early AM to late PM. You can't plan anything that doesn't get messed up. With all the short sales and foreclosures that she has to deal with, I damn sure don't want her job.

[legion]

Originally Posted by notfarnow

The "no service" realtor thing is very intersting to me... we will probably see that up here within a year or two and I think it will really help consumers. I'd be intersted to hear about the "mechanics" of your arragngement. Was he to book showings, negotiate offers, etc? Or merely list it on MLS and have all inquiries & offers go through you?

Flat fee up front.

Around here, selling realtors do not show the house, buyer's realtors do, so that didn't change.

Lock box for the door.

He said that he would handle negotiations, but other realtors tell me that he NEVER returns phone calls. So if we got an offer through him, we'd never know.

MLS listing. He slapped something together with sentence fragments and no punctuation. This was the primary thing I paid for. He promised to update it when requested, but he rarely made the updates as requested, or in a timely manner.

He gets no additional compensation if the house sells. The contract says in big bold letters: "MAY BE CANCELED AT ANY TIME FOR ANY REASON AND A FULL REFUND WILL BE ISSUED."

[john70t]

Wouldn't give much thought to the former Realtor.
Test and document "performace" (legally) using a third party if necessary....then recover whatever is needed/just.

Stay with the big picture in your life, but always CYA. Document. Document. Document.