This started as one question from Trulia Voices but a second from this morning dovetails quite nicely into the discussion:

“If I was behind on payments I was told to contact the Arizona Short Sale office. I want to know if I should contact Arizona Short Sale office or some realtor who just got their license.”

You can call the Arizona Short Sale office but before you do so I need you go to the principal’s office and get the elevator key. Neither exist.

(Editor’s note: it appears the person asking the question knows this, as it’s an agent who claims to be an expert in foreclosure properties. At least I hope the question wasn’t serious if this person’s been helping other people.)

As for the “some realtor who just got their license” angle, let’s check in with another Trulia Voices post to see how that strategy works …

“I am interested in buying a house that now has a courthouse auction date notice posted on the front door. Is it too late to buy before it goes to the courthouse steps? I hear there are sharks there and I don’t want to get bitten! My realtor is new (a relative) and doesn’t seem to know the process.”

Helping out a relative is a very kind thing to do. It’s also not the best strategy when you’re talking about spending a couple of hundred thousand dollars. Wouldn’t it make more sense to hire an agent who does know the process?

Sharks are few and far between on the courthouse steps these days. There are some, but not nearly as many as people believe. Most homes that go to the courthouse steps are ending up as REOs on the Multiple Listing Service.

If the home’s listed there’s time all the way until the auction to purchase the home. Last year, I helped a homeowner sell their property and we closed 17 hours before the start of the auction and trumped the Trustee’s Sale.

Your agent ought to be able to tell you that. Or at a minimum, they ought to be able to ask their broker how the process works. If they can’t do that, they’re at the wrong brokerage. And if they don’t know the answer and can’t get the answer, you’re working with the wrong real estate agent.

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Tags: Phoenix Foreclosures, Bad MLS/Trulia Remarks, General Real Estate by Jonathan Dalton
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In what only can be described as the perfect wedding, our buyer who keeps looking for free pricing advice for Buckeye’s Verrado subdivision from panting agents on Trulia Voices who can’t seem to remember she has an agent received a response from the “wait, rent” respondent with the Magic 8 ball.

We’ll skip the usual questions about why real estate agents are so anxious to provide advice to someone who proudly proclaims they’re working with an agent (and who goes to great lengths to compliment the agent they’re attempting to second-guess online) and go to the Magic 8 ball:

wait
i’m pretty sure they’ll be cheaper in the near future
each area is different
but the trend is your friend
and the trend is down
1/2 sounds good
but what if the house price run up was 400%
just for comparison
compare to before bubble 2000-2001 prices

anyways

good luck

Let’s see … in 2000 and 2001, Verrado was dirt and cactus. It didn’t yet exist. Of course, the run-up in prices here in Phoenix also hadn’t yet happened. Not that such things matter when the panel appears in the Magic 8 ball’s window.

Sound advice indeed, and further proof that you get what you pay for.

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Tags: Bad MLS/Trulia Remarks, General Real Estate, Tips for Sellers, Tips for Buyers by Jonathan Dalton
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If it seems like I’m picking on Trulia Voices these days, well, you’re probably right. Yesterday there was a thread asking how to go around a listing agent who “seem to be representing their own iterests vs. the interest of the Bank or the Buyer, on a REO???”

More than a half-dozen agents have jumped in to the fray with suggestions. Not a single one has asked what it is the listing agent’s doing that is being construed as being in their own interest versus that of the bank.

Side note: while agents who subscribe to NAR’s Code of Ethics owe fair dealings to the other side in a transaction, at no point is a listing agent charged with looking out for the best interest of a buyer as the questioner suggests. That’s their agent’s job.

Though tempted to ask the question everyone else has ducked, I decided not to do so because I really don’t need not want to know. And lines of questions such as this seem to dance so close to the code of ethics’ prohibition on slamming other agents, it’s not worth getting within a country mile of it.

But here’s the larger issue and the ultimate lesson for today’s post … this attempted purchase has been an ongoing soap opera with a dominant story line of a buyer looking for advice from everyone but their agent. If you can’t trust the person with whom you’re working enough to believe their advice, why are you working with them?

This has come up in my own business of late as well. The beauty of the Internet is there’s a lot of more information available for consumers. The danger is the information is woefully incomplete, but the sheer volume of it all makes it appear comprehensive. It’s not.

Most consumers buy a handful of homes in their lifetime. Most turn to family who also have bought a handful of homes in their lifetime. Collectively, their lifetime of experience equates to about a year’s worth of work in my business.

It’s my fiduciary responsibility to educate a buyer or seller about the process, not to tell them what they want to hear. There are plenty of agents who will tell people exactly what they want to hear. When that happens, it’s time to run.

I can’t tell you what you should value. But my experience in this business, my experience in corporate America, my experience in my own life says to value honesty over a yes man.

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One of my clients marked a home in Avondale’s Garden Lakes subdivision as one of their favorites today. The search I set for them is designed to skip past short sales since these homes aren’t actually for sale at the prices listed.

This one slipped through because the agent didn’t note the listing correctly. And the marketing copy is enough to make one believe this is the deal of the century:

!!! Short Sale !!! Bankruptcy, Pre-Forclosure! … This is a Steal being on the water with a pool. This will not last long! Make an offer today before it is gong (sic). Nobody know when the bottom of this market is and we may never see this home again for this price. Don’t let it pass you buy (sic)!

Spelling aside … we’re not even seeing this home now at this price.  The owner owes the bank about $117,000 more than the list price this agent has chosen. Read that one again - $117,000! That’s about a 33% hit the bank will take if they accept a full price offer on this house as a short sale.

Even under the oft-mistaken impression that the bank doesn’t want to own the home (the idea the bank doesn’t want to own it is correct; the idea will do anything not to own it is pure myth), it’s fairly unlikely the bank will willingly accept a 33% loss to sell this home at a substantial discount to current market value.

Market value may be where buyer and seller meet but in this case, the seller’s not willing to meet at the price this agent’s advertising.

RE 2.0 good - buyers being able to search for properties online. RE 2.0 bad - buyers not realizing what they’re seeing isn’t always the full story and finding themselves on the wrong end of a bait and switch list price.

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After writing twice about a specific thread of questions and answers on Trulia the past two days (see: Buying a Home is Not Like The Price is Right, How Too Much Information Can Harm a Real Estate Buyer or Seller), Jeff Turner from  Real Estate Shows offered me the chance to talk further in an online interview.

When everything was said and done, I sounded amazingly like Darth Vader. Jeff had promised me Barry White but things apparently went south.

In any event, our 15-minute discussion is available for your viewing pleasure. Topics include some general thoughts about what consumers and agents expect from Trulia Voices, and how the advice there sometimes can clash with the REALTOR Code of Ethics.

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Tags: Bad MLS/Trulia Remarks, General Real Estate, Tips for Sellers, Tips for Buyers by Jonathan Dalton
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