by Roberta Murphy — A new batch of real estate lawsuits are aready starting to brew.
I attended a seminar last week where it was revealed that 30 percent of all San Diego real estate sales occur outside the MLS (Multiple Listing Service). And it’s happening all over California.
This is not a rise in For Sale by Owner (FSBO) numbers. Rather, agents are listing and selling the homes themselves–and if entered into MLS, those listings will show zero days on market. In other words, the listing may appear in the MLS, but goes immediately to pending status.
How does this happen?
Of course, the selling client may ask that their home be withheld from the MLS for whatever reason. Or, the agent may have mentioned the inconvenience of having people come through their home and, you know, “taking photos with cell phone cameras, and maybe even passing those photos along to bad guys. Besides, I already have buyer….” As a result, Seller may well be signing listing and purchase agreement on same day.
Everything makes sense up to this point, except that we are in a hot market with rapidly rising prices–and some San Diego real estate agents are going to be in hot water down the road when litigation hits the fan.
Attorneys will be soliciting sellers (and possibly short sale lenders?) who “lost money” because their homes were withheld from the MLS by greedy double-ending agents who put their own interests above those of their client. Had their homes been put into the MLS, they would likely have had multiple and higher offers for their property.
And of course, there’s always amnesia.
Some remorseful sellers may forget that they were the ones who requested the anonymity of a “private sale.” All they know is that they “lost” tens of thousands of dollars because their agents did not use the MLS to broadcast their listing and present it to the widest market possible…and all those multiple offers.
Fiduciary duty will be tossed in brokerage faces. Simply put, these real estate agents did not uphold their duty to put clients best interests first–and before their own. Or at least that’s how it will be presented in court.
Seen those “Bad Drug” attorneys trolling for victims on television? We shouldn’t be surprised to see the birth of “Bad Agent” commercials coming soon. But that is going to open another can of worms, because, as we revealed a couple of weeks ago, something like 70 percent of all agents and brokers DO NOT HAVE ERRORS AND OMISSIONS INSURANCE which will eliminate some deep pockets for recovery.
Though we don’t withhold listings from Sandicor so we can sell them ourselves, we do stay in touch with agents who have pocket listings so that we can present them to our buyers. There’s no hazard in that because we are representing our buyer’s best interests and the seller’s agent is allowing for cooperation.
In times like these, the best value around is the MLS–where properties for sale get broadest exposure possible, and where sales can also occur very quickly.