July 15, 2011
Good For the Goose AND the Gander?
Before you read this blog entry, I encourage you to read the article posted below it on the home page of our website. You may also want to check out many of the comments made by readers to get a feel for how divisive this topic really is.
The article tells how banks are getting fleeced by local Realtors who are making much lower offers for short-sale houses than they really have. The troubling thing here is not that someone has seized a money-making opportunity; instead, my question is this: Why aren't the banks' Realtors protecting their clients' best interests?
One has to assume the banks have retained local agents to represent them. If these are the agents submitting lowball offers to their clients, then re-selling to investors for ridiculous margins, then they should be arrested, fined, and jailed. However, if the agents perpetrating these arrangements are representing a buyer and not the seller, then more power to them. It is the seller's Realtor that is responsible to ensure their clients get the best possible price for a property; nobody else's.
The article in CNN Money is slanted and reads more like an opinion piece than a news story. In it, the banks are nothing more than victims, not knowing the true values of their properties and forced to trust local Realtors who may or may not have their best interests at heart. These are the same banks, need I remind you, that gave loans to people who couldn't afford them, on houses that were grossly overvalued, based on appreciation projections that were completely unsustainable. Can you argue they had their customer's best interests at heart at that time?
Business is a dog-eat-dog world. The banks don't have to accept a price far less than what they think a home is worth. If they end up hiring a Realtor who scams them, it might be chalked up as bad luck, but more likely bad due diligence on the agent. Here again the importance of relationships is stressed.
I certainly don't condone Realtors who blatantly attempt to deceive their clients. That said, I am all for legal, ethical business that finds a way to make a profit. I suspect there is both in the short-sale arena. Imagine selling your car to an auto dealership, only to learn they turned around and sold it for thousands more than they paid you. Hey - you sold the car to them - they had access to buyers that you didn't. Were you just defrauded or is there value in having access to those buyers?
The guys who run these banks are (supposedly) smart guys - don't feel too bad for them. Throw the scammers in jail, but leave the legitimate businessmen alone.
That's all I'm sayin'!
Make it a great week(end),
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