Discount Broker = Caveat Emptor

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I was hanging out in my office today, talking to one of my colleagues about a short sale listing we’re working on. Another colleague wanders in and says, “Hey, a woman just called in on floor, and she wants to know what’s up with your listing on Peace Drive. She said she put in an offer but hasn’t heard anything back.”

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I was a bit nonplussed by that. Wait wait – I’ve got a confession. This is the very first time I have ever used the word nonplussed . I must be getting old!

But anyway, there I was, all nonplussed and all, but I finally managed to say, “Really? I called every agent who put an offer in and let them know that we had accepted another offer!” To which my colleague replied that well, this lady hadn’t heard anything, but that she’d been using a discount broker up in San Francisco.

Ahh. Gotcha. I know who her agent is. This is the guy who sent me an offer, and after I received it, I called him to let him know I’d be e-mailing him a “multiple offer disclosure” which I would need to have him get his client to sign and return to me by the end of the next business day, along with what his client’s “highest and best” offer might be.

At the end of the next business day, I hadn’t received back his signed disclosure, so I called him up. “Hey, I didn’t get back your signed multiple offer disclosure!” I told him. “Oh, I never got it!” he said. Hmm. Well, that’s possible, we all know that e-mail isn’t 100% reliable, but even so, you think he would have followed up with me when he didn’t receive it. “No problem,” I said, “I’ll send it right now.” Which I did – I sent it to the very same e-mail address I’d sent it the day before, because my e-mail program auto-completed the e-mail address for me. “Got it,” he said. We agreed he’d get his buyer to sign it that day and get it back to me. I got his cell phone number from him so that I’d be able to stay in good communication with him.

By 9 PM, I hadn’t received anything back from him, so I called his cell. No answer, so I left a message. I called the next morning at 9 AM on his cell phone – no answer, I left a message. I called again in the early afternoon, this time on his office phone, and left a message, still wanting to get back the multiple-offer disclosure, even though we were past the deadline.

By the next morning, the seller had accepted another person’s offer. Later that afternoon, I called up all the agents who had submitted offers, and I let this agent know that a different buyer’s offer had been accepted, but thanks for putting his offer in. Again, he didn’t answer, and he never called back.

Well, it looks like he never called his client back, either. I guess this guy figures his being a “discount broker” allows him to cut some corners on his fiduciary responsibility to his clients. I don’t think that the Department of Real Estate would look at it that way.

I’m not saying there’s anything wrong with being a discount broker. I myself offer discounts to my clients, through my Buyer’s Reward Program. When a buyer does participate in my Buyer’s Reward Program, do I work any less hard for them? No, of course not. I don’t believe the amount of compensation an agent receives should reflect the amount of diligence that is employed during the real estate transaction. I am sure there are many discount brokers out there who work just as hard for their clients as I do, whether I’m rebating a portion of my commission or not.

I think the lesson here is not necessarily that you should avoid discount Realtors. I think there are two lessons here – one is an axiom we’ve all heard a thousand times: you get what you pay for. Another is this: don’t be penny wise and pound foolish by entrusting one of the biggest financial transactions of your life to someone who hasn’t earned your trust.

Profound, I know. But sometimes we all fail to see the forest for the trees. Ever the optimist, I feel that every dark cloud does indeed have a silver lining. It may work out such that my colleague, who is not a discount broker and who works very hard to fulfill his responsibilities to his clients, will pick up a new one as a result of this other broker’s negligence. I’ll say Ommmmmmmm to that!

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