Today’s market of headlines scream housing recession, foreclosures, fraud and scams, it is important to choose the right Realtor to help you buy or sell your home. See if they did what they advertise, if they really sold it. Realty offices need to be reviewed. According to a report by Realtor.Com over 82% of real estate sales are due to Realtors or agents through referrals, personal contacts, friends, family and more. But how do you choose the right person? Regardless of the source of the recommendation, here are five factors to look at when deciding if the person standing before you deserves to help you buy or sell your home.
Background Check Your Realtor
What I always find amazing is that people will Google friends, doctors, lawyers and more online but don’t check their Realtor or agent. In today’s market background checks are becoming more and more a part of doing business. Appraisers now must be registered with lenders, Mortgage Brokers must be licensed through a national system, but Realtors still fall under the radar. Would you want advice from a individual or company that isn’t up to par? For example take, the state of Florida, which according to a recent headline article in the Sun Sentinel stated, “South Florida Market Was Ground Zero For Housing Market Bust.” It is in the top 5 states for real estate related fraud. Florida has one of the best open investigative tools available to consumers, public records. The public records system allows anyone to research any public filings done against a business or individual, including liens, judgments and foreclosures. For example we examined a realty office located in Coral Springs, Florida. According to www.Sunbiz.org, its corporate filing lists three officers or directors and the registered agent. According to public records at www.Broward.org all four have been involved currently or in the past in foreclosure proceedings against them. Three of them have their real estate licenses. Research who you are working with in one of the most important FINANCIAL transactions you could ever make. People in difficult financial positions are more likely to be tempted to be less “ethical.” According to the Realtor.Com website it states as its number one reason for using a Realtor,
“Your REALTOR® can help you determine your buying power — that is, your financial reserves plus your borrowing capacity. If you give a REALTOR® some basic information about your available savings, income and current debt, he or she can refer you to lenders best qualified to help you….”
Most lenders won’t hire individuals who don’t meet certain personal financial criteria. Even the state of Florida has issued certain requirements for mortgage brokers regarding their own backgrounds and personal credit issues. Also check with the state or Realtor board to see if your Realtor has any ethics complaints
If It Feels Wrong, It Is
Many sellers and buyers would assume that in today’s tight credit market, fraud would be much harder to do, unfortunately that isn’t true. While in decline from the peak of 2007, it is estimated from a report released by Corelogic, that one in 200 conforming loans contain fraudulent information that could lead to default. In 2009 alone, fraud was estimated to cost $14 billion in losses according to the company. The largest states for fraud are Florida, North Carolina, South Carolina, California and Georgia. With a tough environment for all involved in the transaction, you might be tempted to commit real estate fraud, sometimes on the advice of your Realtor. I remember a transaction once where a “well known” Realtor ask me to “hide” from the lender the fact that there would be “silent mortgage” held for furniture. I refused and fought the other Realtor as they tried to “convince me that it would not be fraud.” Of course it is. If what a Realtor is telling you to do seems “wrong” then it probably is. If you as a seller try to “hide” a important fact on a property that could affect the purchase based on what your Realtor said you could face criminal charges. If you as the buyer, misrepresent yourself the same could happen. Remember, once the transaction is completed and the commission is paid, you may not be in a position of recourse.
Remember the saying, “don’t have all your eggs in one basket?” Well there is a logic to that. Kickback scams involving Realtors and title companies are a huge issue according to the Department of Housing and Urban Development (HUD). According to FraudGuides.Com, Real Estate agents would created a corporation that bought a interest in a title and insurance escrow company. The Realtors would then refer their clients to their OWN title companies. The title companies would then “kick back” portions of the title and settlement fees to the crooked Realtors. It is best in a financial transaction to make sure that all parties are not under the same roof to protect yourself from “in house scams.” Ask to get your estimated closing statement early enough before the day of closing. When you receive your closing statement, have it reviewed by a third party to make sure that the fees charged are not “inflated.” Review the statement and ask questions regarding any of the costs involved. If you suspect kickbacks you can contact HUD at www.HUD.gov
Ask For A Proven Track Record
A good Realtor should not only provide you with homes they have sold and helped purchase but a record of how the transaction went. If you are the seller, you want to make sure the Realtor didn’t “under sell” the properties he or she listed. How long did they sit on the market? Were they priced too high when first listed? If your Realtor is helping you to purchase a home, how many buyers have they helped this year? What was the average priced home? Are they specialist in helping first time home buyers but you are purchasing a luxury home? How many contracts feel through? Why? A good Realtor should be willing to negotiate on price, work within your parameters, not “steer” you to “particular homes”, and should know the market you are in.
Which makes you have more confidence a website that provides full access to the Multiple Listing Service, provides a track record of the Realtor, what they sold, if it is pending, realty office information and more, or a one page website that looks like a elementary school project? The choice is clear. Presentation is everything and gives the impression of career success.
Choosing the right Realtor, agent or realty office can make the difference between sold it and sitting on it. Between getting the house of your dreams or buying a financial nightmare. Use the information above as a guide to finding a responsible, respected and ethical Realtor. And yes, they do exist!