Over the weekend it was brought to my attention how a major REO broker seems to have an internal policy of putting REO listings in "Contingent" status as soon as they print the MLS printout to upload to RES.NET even though they don't have an executed contract. Had suspected as much but had not seen proof of it until recently. That is an unethical and probably illegal game some broker's play. Not only is it not fair to buyers agents and their clients but it may also limit the sales price the financial institution might receive for their assets. Has anyone else experienced that in their market and what have they done to curve such activity?
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One way to keep track of the listing and ensure it is being marketed until there is an executed contract is for the AM to request a MLS history of the asset from the listing agent. Not sure if other states' MLS have that feature in place but here in Las Vegas it is a feature of our MLS (MLXChange). That's how it was determined the broker had "pocketed" the listing. He put it in ER (active) status and the same day it was placed in C (contingent/inactive) status. Another way would be to make calls as a buyer's agent to check on the availability of the property. This was also done in this particular case and the buyer's agent was told it was in contract and no longer available, not even for back up offers. One way to resolve this problem would be for the offers to be inputed by the buyer's agent through MLS or res.net to make sure they were submitted and keep track of offers. Again it would be the listing agent's job to verify the validity of the agreement, pre-approval letter and EMD.
George Bellino > Carlos H. Silva Sr.September 5, 2009 at 7:23am
Carlos, that's what I was thinking. There could be a link on the mls for buyers agents to submit offers and on the listing agents system there could be a box for "Verified Funding." That would ensure all offers get submitted and also the listing agent still has to verify the strength of the buyers funding. On another note, one of my clients just started to require the Desktop Underwriting from with all offers. I really like that because it cuts right to the chase and really helps the AM distinguish between buyers when in a multiple offer situation. Pre-quals and some preapprovals aren't really worth the paper their printed on in alot of cases.
Also maybe a QA dept for banks where they have employees dedicated to calling on listing agents and doing a "mystery shop" on their properties. I think that would save the banks a tremendous amount of time and money. The banks would really be surprised with all the inconsistencies they find. They can give the agent one warning and the next offense would be termination or reassignment. That would really wake some agents up.
Bid Selects has its problems and should not be used as a SAVE ALL. With systems like bid select, in which I have represented both buyers and sellers, there is no way to screen the buyers offers and its not the Asset Mgr.’s job to do this it the listing agent. For example in system like Kozar and Bid Select, an agent can write an offer on any property, The systems have no way of checking pre-approval vs pre-qual, nor can it ensure deposit check, and date of pre-approval. I've had agents write offers on properties, without even seeing the inside, only to tie the property up for 14-17 days and back out. As you know the highest offer is not always the best offer and systems that remove the human element may cost the client more money in the long run, especially in a depreciating market. We have agents writing offers using the shot gun approach, (Write on 10 and the first one to accept wins) until this changes an automated system going strait to the AM is not the answer at least not here in CA. My suggestion is to have a review committee that will hold LA accountable when unethical "pocket listing" occur. If agents know they will be held accountable they will be less likely to do this.
Same with systems like BS if agent's were held accountable for writing offers without deposits, or qualifed buyers etc, this system would work well. Problem is you can't justify the cost for the staff needed to enforce or reveiw. Therefore Carlos, keep doing what your doing,you will weed out the bad apples. Maybe not all, but others will catch on once a few are hit pretty hard.
Just received this email from IAS today regarding kick backs. I am unaware of them in my area, but from what I'm reading here, I guess it happens-
Please remember that commission paid by the seller to IAS agents at time of closing is intended to be sole and exclusive; that is, IAS Brokers shall not accept any additional compensation from a prospective purchaser, a prospective purchaser’s agent, the purchaser or any entity participating in or providing services for the transaction. This includes Processing Fees, Compliance Fees, REO doc storage fees, etc. This policy is still applicable if the Agent is acting as Dual Agent, representing both sides of a transaction.
Steve Adkins > Billie DalessioSeptember 5, 2009 at 4:26am
Replies
Also maybe a QA dept for banks where they have employees dedicated to calling on listing agents and doing a "mystery shop" on their properties. I think that would save the banks a tremendous amount of time and money. The banks would really be surprised with all the inconsistencies they find. They can give the agent one warning and the next offense would be termination or reassignment. That would really wake some agents up.
Banks are already doing the "mystery shop" and a list is of "violations" is submitted to AMs for them to question the listing broker/agent.
Bid Selects has its problems and should not be used as a SAVE ALL. With systems like bid select, in which I have represented both buyers and sellers, there is no way to screen the buyers offers and its not the Asset Mgr.’s job to do this it the listing agent. For example in system like Kozar and Bid Select, an agent can write an offer on any property, The systems have no way of checking pre-approval vs pre-qual, nor can it ensure deposit check, and date of pre-approval. I've had agents write offers on properties, without even seeing the inside, only to tie the property up for 14-17 days and back out. As you know the highest offer is not always the best offer and systems that remove the human element may cost the client more money in the long run, especially in a depreciating market. We have agents writing offers using the shot gun approach, (Write on 10 and the first one to accept wins) until this changes an automated system going strait to the AM is not the answer at least not here in CA. My suggestion is to have a review committee that will hold LA accountable when unethical "pocket listing" occur. If agents know they will be held accountable they will be less likely to do this.
Same with systems like BS if agent's were held accountable for writing offers without deposits, or qualifed buyers etc, this system would work well. Problem is you can't justify the cost for the staff needed to enforce or reveiw. Therefore Carlos, keep doing what your doing,you will weed out the bad apples. Maybe not all, but others will catch on once a few are hit pretty hard.
Please remember that commission paid by the seller to IAS agents at time of closing is intended to be sole and exclusive; that is, IAS Brokers shall not accept any additional compensation from a prospective purchaser, a prospective purchaser’s agent, the purchaser or any entity participating in or providing services for the transaction. This includes Processing Fees, Compliance Fees, REO doc storage fees, etc. This policy is still applicable if the Agent is acting as Dual Agent, representing both sides of a transaction.
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