Real Estate Agent -----OR-----Advocate?

I am about to tell you a story that is really unfortunate. I have a new client who previously sold a home with a different realtor. As I listened to her story about the sale of her home that was completed with her prior real estate agent I literally cringe. Now this blog is not to call out any specific individual, nor to place a dark cloud above realtors, it is strictly intended to provide you with information so that you can make the right choice when choosing your real estate agent.

This client we shall call Jane who had a realtor we will call Joe represent her in the sale of her home. The home was being sold AS IS as stated in the MLS. It was also a short sale, which means the homeowner owed more than the homes current value.

The agent Joe was hired because he said he had a buyer for the home. The homeowner, Jane, had already gotten a buyer that was willing to pay more than this new buyer. Jane asked Joe to make sure to submit both offers to the bank for them to choose the best of the two. Joe said no, I will just be submitting my buyers offer. And that offer was for less money. This leaves Jane with a higher tax implication when the sale is completed because less of the loan gets paid off.

Also, during the sale, Jane asked Joe to submit a request for an $8500 credit to be applied to the second on the home and once that was paid Jane was going to transfer the remaining part of this debt to another home to be paid off at a later time. Joe said no, I don't want to muddy this transaction, you need to just transfer that second now.

Jane is also required to fill out lots of disclosures to let the buyers know what they are aware of with regard to the home. This is something that should be completed at the beginning of the sale so the buyers can make an informed decision about whether to move forward with the purchase, or ask for repairs, or for credit. However, Jane wasn't provided this paperwork until the day before close of escrow was scheduled. Jane asked the agent to meet with her to make sure she filled the paperwork out properly, Joe didn't show up to the meeting, and just texted the homeowner and said just fill it out. 

The buyers, which appeared to be represented by the same agent, Joe, were scheduling the home inspection, but the utilities weren't on, so the homeowner jumped through hoops (on Superbowl Sunday) to get all the utilities turned on, but the gas company required someone to be present. Jane offered to meet with the gas company, then Joe said don't worry about it.
The buyers did some kind of inspection, I am not sure to what degree, (because I am not involved in this sale) but obviously didn't inspect anything that required the gas to be on.

Jane followed up with Joe and asked if they wanted the gas on, did the inspection go ok with everything else, and the agent said, don't worry about it, we are good to go. We should be closing soon.

Now, fast forward about 6 weeks after close of escrow and the new homeowner is asking the old homeowner, Jane, to pay for a complete re-piping of the entire gas line. They are stating that the seller knew there was something wrong and that she is responsible.

Back up to the top and as noted, the home was being sold AS IS, whether the homeowner knew there was an issue or not, it was being sold AS IS. And for the record Jane didn't know there was anything wrong with the gas line, as the gas was turned off months before they opened escrow, and Jane didn't have any issues at the time she had lived there.

Joe called for quotes to replace the piping and called Jane (supposed to be the agents client) and TOLD her she was going to have to pay for the re-piping.

Now this particular real estate agent wasn't representing her client in the fashion that is expected per the rules of the California Association of Realtors. We are supposed to have a fiduciary responsibility to our clients, but it appears the fiduciary responsibility of this agent was for the buyer and not for the seller.  

This is now a case that has legal representation with no outcome just yet, but once resolved I will post another blog.

The reason for this story is that I am a firm believer that when you are buying or selling a home, you need to have proper representation, so when you are interviewing potential real estate agents to represent you, make sure they are going to be your advocate, not just someone who wants to close a transaction. For you this is buying a home, for many real estate agents this is simply another transaction, for me it is an opportunity to represent my clients to the best of my ability keeping THEIR best interest in mind throughout the process. And for the record, the agents are supposed to follow your direction, not impose their own choices on you in the process.

For more information on this story, or to understand the difference between a Realtor and an advocate just call Julz.
www.justcalljulz.net

Do you know what a 1031 Exchange is?

Recently I have had a couple of clients ask me about doing a 1031 exchange. This is a government program that allows you to defer capital gains taxes.

This program only applies to investment homes where you are using it for income. For example, if you have a home that you are renting out to tenants, and lets say the lease is about to expire and you aren't sure if you want to retain this home or sell it to buy another in a different location.

Then you see that you have gained some equity in the home and you decide to sell it and to re-invest in a new home in a different area. When you sell the first home you would normally be required to pay the capitol gains taxes on the equity you gained.

But by using the 1031 exchange, you can now buy another home in a different location and defer those taxes. In other words, you don't have to pay those taxes today.

There are many more details regarding the 1031 exchange, how it works and the time frames in which to complete the 1031 exchange.

For more details, please just call Julz. 949-633-6788

www.justcalljulz.net