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Britney John…'s Questions (0)
Britney John…'s Answers (14)
Britney Johnson answered:
Hi Jill,
Lots of great advice here from other people, but I just wanted to add onto the response made by "Hi-from Virginia" posted below.
The part about auctions not always being a good deal is true, but I don't want these comments to steer you away from making up your own mind on this.
What I would like to caution you on is that most often an outside of a house may not reflect what is behind those walls and you usually do not have an opportunity to inspect before the auction and your ownership.
Many times happy bidders (buyers) get the home days beyond the sale (varies according to state laws-WA. is 20 days) . Once inside, they find that the interior has been so severely damaged that it requires extensive re-permitting to make the repairs.
More homes are also found with some sort of bobby-traps installed, one resulted in an accidental shotgun death of the very person who installed it and accidentally tripped his own trap.
In one near Bonney Lake area neighborhood (Pierce County) years ago, the house was found full of dangerous snakes. Some of them were dead from starvation but many were still alive and active and had escaped from their cages in search of food since they were left abandoned. One snake was over 15' and cornered the new owner before she smashed through a window to escape.
On occassion, homeowners who have faithfully paid for 20 years wind up in foreclosure and as it approaches, they become angry at the loss of all of their equity over a few missed payments-often that anger is taken out on the house.
In one case, an angry homeowner had a mysterious electrical fire about 15 minutes before the auction. while the fire department was putting out the last few sparks from the now half burnt down structure, an unsuspecting person had made the successful bid and became the new owner.
Can you imagine the surprize that they got as fire trucks passed by them as they left the the scene of their new smoldering house. Guess who got the insurance money and guess who lost out? Yep, the foreclosed upon owner was compensated for the "accidental" electrical fire because the alarm came in prior to the auction and they were still the owner.
Before considering any house offered at an auction-DO YOUR HOMEWORK and make a deal with the occupants for a cash for keys deal!
Lots of great advice here from other people, but I just wanted to add onto the response made by "Hi-from Virginia" posted below.
The part about auctions not always being a good deal is true, but I don't want these comments to steer you away from making up your own mind on this.
What I would like to caution you on is that most often an outside of a house may not reflect what is behind those walls and you usually do not have an opportunity to inspect before the auction and your ownership.
Many times happy bidders (buyers) get the home days beyond the sale (varies according to state laws-WA. is 20 days) . Once inside, they find that the interior has been so severely damaged that it requires extensive re-permitting to make the repairs.
More homes are also found with some sort of bobby-traps installed, one resulted in an accidental shotgun death of the very person who installed it and accidentally tripped his own trap.
In one near Bonney Lake area neighborhood (Pierce County) years ago, the house was found full of dangerous snakes. Some of them were dead from starvation but many were still alive and active and had escaped from their cages in search of food since they were left abandoned. One snake was over 15' and cornered the new owner before she smashed through a window to escape.
On occassion, homeowners who have faithfully paid for 20 years wind up in foreclosure and as it approaches, they become angry at the loss of all of their equity over a few missed payments-often that anger is taken out on the house.
In one case, an angry homeowner had a mysterious electrical fire about 15 minutes before the auction. while the fire department was putting out the last few sparks from the now half burnt down structure, an unsuspecting person had made the successful bid and became the new owner.
Can you imagine the surprize that they got as fire trucks passed by them as they left the the scene of their new smoldering house. Guess who got the insurance money and guess who lost out? Yep, the foreclosed upon owner was compensated for the "accidental" electrical fire because the alarm came in prior to the auction and they were still the owner.
Before considering any house offered at an auction-DO YOUR HOMEWORK and make a deal with the occupants for a cash for keys deal!
Britney Johnson answered:
Mike-just curious, are you aware of the new Washington flipper laws? It applies to homes non-owner occupied, non-rental, and held for less than one year.
Answer to Tom Roche, Real Estate Pro, Bremerton, WA regarding comment from Britney John (...agency agreement)
Revised Code of Washington (RCW) 18.86.010 (1)(A)
Also this creates a problem with the agent becoming "agent de facto", in other words, by the agents conduct they accept all of the risk and are obligated to perform just as if their agent, but there is no obligation for them to pay you.
Revised Code of Washington (RCW) 18.86.010 (1)(A)
Also this creates a problem with the agent becoming "agent de facto", in other words, by the agents conduct they accept all of the risk and are obligated to perform just as if their agent, but there is no obligation for them to pay you.
There are many reasons why an agent will not bring a buyer to a FSBO property even though they are offering a commission. Here are the most common one's.
1. State law: before anyone can be represented, they must be under contract by State law. If the seller has not already listed with an agent, then it must be the buyer for it to be legal. In Washington, like most other States, the buyer is seldom under contract and so that leaves the agent in a legal dilemma.
So why is it that agents from other companies can show a property without this documentation coming from them? When the listing agreement is signed by the seller, they have already authorized their agent to employ other agents to help them sell. That agent is under an MLS cooperative agreement with other member agents.
Agents who are not a MLS member are at risk and basically operate just like approaching a FSBO.
2. Insurance: most insurance agencies for agents forbid representation without prior agreement. When they bring an undocumented buyer to your property, they are in effect acting as "agent de facto" as your agent. Since there isn't an agreement to spell out everyone's responsibilities, again this puts the agent in a dangerous and potentially costly situation.
3. Although many sellers will say that they are offering a commission, what assurance does the agent have that it will actually be paid. Last year there were over 100 lawsuits filed nationwide that made the same claim with the seller almost always prevailing because there wasn't a prior written agreement.
The TV sitcom actor Jerry Seinfeld lost a $100,000 commission dispute with his agent in NYC. What saved the agent? GOOD DOCUMENTATION.
I'm the Broker for an investigative real estate agency (believed to be the only one in Washington State). In addition to the usual sales-purchases, a large portion of our business is investigating real estate deals that have gone bad. We actually prepare the civil presentation for court and forward criminal conduct information to the prosecution.
I recommend to my agent clients that before they show a property, that they print out an MLS agent detail, flip it over and run it through the printer again this time printing a guest log on the back. Before the client gets to see the inside of a property, they sign the log, fill in their address, phone, and the agent notes personal info. for safety reasons.
This log saved one agent recently who was in a procuring cause situation and showed that the client did in fact visit the property as their client even though they claimed otherwise and was attempting to work with a relative agent who was too lazy to show it.
Over the last few years, my business has increased and it is almost always as a result of faulty documentation where someone who thought they were doing the right thing, did not put it on paper correctly (P.S.: most of these are FSBO).
1. State law: before anyone can be represented, they must be under contract by State law. If the seller has not already listed with an agent, then it must be the buyer for it to be legal. In Washington, like most other States, the buyer is seldom under contract and so that leaves the agent in a legal dilemma.
So why is it that agents from other companies can show a property without this documentation coming from them? When the listing agreement is signed by the seller, they have already authorized their agent to employ other agents to help them sell. That agent is under an MLS cooperative agreement with other member agents.
Agents who are not a MLS member are at risk and basically operate just like approaching a FSBO.
2. Insurance: most insurance agencies for agents forbid representation without prior agreement. When they bring an undocumented buyer to your property, they are in effect acting as "agent de facto" as your agent. Since there isn't an agreement to spell out everyone's responsibilities, again this puts the agent in a dangerous and potentially costly situation.
3. Although many sellers will say that they are offering a commission, what assurance does the agent have that it will actually be paid. Last year there were over 100 lawsuits filed nationwide that made the same claim with the seller almost always prevailing because there wasn't a prior written agreement.
The TV sitcom actor Jerry Seinfeld lost a $100,000 commission dispute with his agent in NYC. What saved the agent? GOOD DOCUMENTATION.
I'm the Broker for an investigative real estate agency (believed to be the only one in Washington State). In addition to the usual sales-purchases, a large portion of our business is investigating real estate deals that have gone bad. We actually prepare the civil presentation for court and forward criminal conduct information to the prosecution.
I recommend to my agent clients that before they show a property, that they print out an MLS agent detail, flip it over and run it through the printer again this time printing a guest log on the back. Before the client gets to see the inside of a property, they sign the log, fill in their address, phone, and the agent notes personal info. for safety reasons.
This log saved one agent recently who was in a procuring cause situation and showed that the client did in fact visit the property as their client even though they claimed otherwise and was attempting to work with a relative agent who was too lazy to show it.
Over the last few years, my business has increased and it is almost always as a result of faulty documentation where someone who thought they were doing the right thing, did not put it on paper correctly (P.S.: most of these are FSBO).
Britney Johnson answered:
Deborah Madey:
Thanks for your comment.
Personally I believe that the limited services do not do the seller a service and they waste their time and money. Most advertise that it is a way to get a property listed in the MLS, but beyond that, not much else is done and the seller is left to do all other marketing or as one limited services company does in my area, charge $150 per hour for any other services needed.
Often months pass by before the seller realizes that it is not the MLS that sells the property, it is the good efforts of the agent as the MLS is just a tool for agent communication.
I believe that if you are not representing a person such as with your question, yet you continue to give expert and direct advice, you could be setting the stage for problems down the road. As long as someone claims to have representation, I would refer them back to their agent or keep your responses general in nature and always inject, that it is a general answer and that they should seek specific advice from their own agent.
If this agent is ignoring his/her client, then your local licensing authority may want to have a chat with them because they are not doing a service for their client by implied professional responsibilities (my state has direct minimum responsibilities set in law).
With real estate, I'm sure that you are aware that there can be a "fiduciary responsibility" to an unrepresented party of the transaction. I see more agents who are contesting this responsibility by informing the unrepresented party that they should have their own agent before proceeding forward and making it clear that they represent only their client much the same as courts do when a pro se party comes before it. Once that statement is made, the other party who remains unrepresented can be held to the same legal standards just as if they had an agent Most of my work comes from fsbo deals that went horribly wrong so instead of them saving a buck by going it alone without an agent, they pay me thousands to unravel the mess (the average case that goes to trial can cost them well over $30,000).
I do see the internet playing an even larger role in sales and I also see video tours rather than in person tours taking a large leap into the industry. Once the buyer narrows the serach to a few properties, then I see the agent actually opening the door.
A few years back, I had a sale that I still talk about today because it amazes me. I sold a large multi-million dollar property but here is the strang part; I never met the seller, I never met the buyer, I never stepped foot on the property. About the only thing that saw was a thank you note with a very large commission check attached. From that point on, I had a belief in the internet and now we prepare sale documents for properties throughout the country (by fee) all by internet.
Regarding the request that you received to withhold material defects information:
You seem like a true professional so it is not a surprize to me that you refused to do that.
My state, Washington, has a disclosure law by document. The disclosure must be made regardless of if it is agent or fsbo sold unless the buyer waives it in writing (except environmental issues which can not waive the form). This document is mandated by our title 64 (64.06.020) and can have a criminal or civil penalty attached for failing to truthfully answer the questions.
The disclosure document must be in the state mandated format and not even one word can be changed, although addition disclosure can be added. It is the same with many states, maybe even yours.
A few years back in I believe it was New Hampshier, a family of 4 lost their lives as a result of a seller known defect that they concealed with a heater. The very first time the heater was used, it killed every family member as they slept from carbon monoxide poisoning. The seller claimed that they did not know about the defect in the second of two heaters, but bills from the heater service company clearly showed that they did and one even contained a warning not to use the heater until repaired.
As a result of this cover-up, the seller is now serving a lengthy prison term and states scrambled to strengthen the disclosure laws. You may lose a seller by doing the right thing, but you will sleep much better with a clear conciounce.
Thanks for your comment.
Personally I believe that the limited services do not do the seller a service and they waste their time and money. Most advertise that it is a way to get a property listed in the MLS, but beyond that, not much else is done and the seller is left to do all other marketing or as one limited services company does in my area, charge $150 per hour for any other services needed.
Often months pass by before the seller realizes that it is not the MLS that sells the property, it is the good efforts of the agent as the MLS is just a tool for agent communication.
I believe that if you are not representing a person such as with your question, yet you continue to give expert and direct advice, you could be setting the stage for problems down the road. As long as someone claims to have representation, I would refer them back to their agent or keep your responses general in nature and always inject, that it is a general answer and that they should seek specific advice from their own agent.
If this agent is ignoring his/her client, then your local licensing authority may want to have a chat with them because they are not doing a service for their client by implied professional responsibilities (my state has direct minimum responsibilities set in law).
With real estate, I'm sure that you are aware that there can be a "fiduciary responsibility" to an unrepresented party of the transaction. I see more agents who are contesting this responsibility by informing the unrepresented party that they should have their own agent before proceeding forward and making it clear that they represent only their client much the same as courts do when a pro se party comes before it. Once that statement is made, the other party who remains unrepresented can be held to the same legal standards just as if they had an agent Most of my work comes from fsbo deals that went horribly wrong so instead of them saving a buck by going it alone without an agent, they pay me thousands to unravel the mess (the average case that goes to trial can cost them well over $30,000).
I do see the internet playing an even larger role in sales and I also see video tours rather than in person tours taking a large leap into the industry. Once the buyer narrows the serach to a few properties, then I see the agent actually opening the door.
A few years back, I had a sale that I still talk about today because it amazes me. I sold a large multi-million dollar property but here is the strang part; I never met the seller, I never met the buyer, I never stepped foot on the property. About the only thing that saw was a thank you note with a very large commission check attached. From that point on, I had a belief in the internet and now we prepare sale documents for properties throughout the country (by fee) all by internet.
Regarding the request that you received to withhold material defects information:
You seem like a true professional so it is not a surprize to me that you refused to do that.
My state, Washington, has a disclosure law by document. The disclosure must be made regardless of if it is agent or fsbo sold unless the buyer waives it in writing (except environmental issues which can not waive the form). This document is mandated by our title 64 (64.06.020) and can have a criminal or civil penalty attached for failing to truthfully answer the questions.
The disclosure document must be in the state mandated format and not even one word can be changed, although addition disclosure can be added. It is the same with many states, maybe even yours.
A few years back in I believe it was New Hampshier, a family of 4 lost their lives as a result of a seller known defect that they concealed with a heater. The very first time the heater was used, it killed every family member as they slept from carbon monoxide poisoning. The seller claimed that they did not know about the defect in the second of two heaters, but bills from the heater service company clearly showed that they did and one even contained a warning not to use the heater until repaired.
As a result of this cover-up, the seller is now serving a lengthy prison term and states scrambled to strengthen the disclosure laws. You may lose a seller by doing the right thing, but you will sleep much better with a clear conciounce.
Hi again MH:
I really can't add much more than what Deborah Madey said. Obviously she paid attention in law 101-lol.
Let me just say that "agent de facto" status can apply to any profession that can represent another persons interests. This includes real estate agents, construction superindentents, and even attorney's.
Attorney's are very careful not to give out too much legal advice without having the person sign an agreement regarding representation. Attorney's (not lawyers-there is a difference) are also careful about even participating in chat rooms and blogs such as this while using their actual name (wink-wink) because if someone were to rely upon their advice and it later turned out to be wrong, they could make a claim of agent de facto status and seek damages.
For someone to prevail with such a claim, they would have to prove that they had conversed with the person in such sufficient detail that they came to believe that the person was an expert/professional with superior knowledge. This must go far beyond the general conversation and must result with damages so you people here have nothing to fear.
Although claims of agent de facto are starting to increase in lawsuits, they are usually the last claim and the suits are generally decided on another issue so there has not been a conclusive decision on this matter.
As Deborah said, this status can place an agent in a severe problem area, especially if a sale is near, then fails. Undocumented sellers get upset and start to blame agents claiming that they relied upon their guidance and information to move the sale forward. Buyers get upset claiming that the agent should have done more. Some agents even find the seller and buyer teaming up in lawsuits all while they have not made a dime from the transaction.
Although courts often recognize the real story, it is not their position to inject a defense or an argument into the case and so here stands the agent all alone getting it from both sides. Many banks are so concerned about this situation, that they hire agents to resell REO properties thus they distance themselves from any such claims.
This is not the 50's where a handshake means everything to all people. Today we have many people who seek the first opportunity to sue knowing that you have insurance coverage that is likely to settle before trial.
I am just finishing a book that will go into publication in the next few months. It covers many legal "what if" scenarios, many of them are in real estate. The book accomplishes this by presenting the facts in a short story. The reader then must decide the case as a juror based on that information.
To get the answer or to actually discuss the case with other "jurors", the reader will be directed to a web site where the author or authors representative will be there to guide the legal discussions along to a conclussion. The goal of the reader is to ignore non-essential information while picking out the key elements of the case. It does cover an agent de facto situation. Each story will not allow someone to just flip to a textbook answer and they are designed so that you will have to call on several areas of knowledge to reach the conclussion.
Send me your email and I would be happy to send out a complimentary copy to you.
Thanks for reading my comments.
I really can't add much more than what Deborah Madey said. Obviously she paid attention in law 101-lol.
Let me just say that "agent de facto" status can apply to any profession that can represent another persons interests. This includes real estate agents, construction superindentents, and even attorney's.
Attorney's are very careful not to give out too much legal advice without having the person sign an agreement regarding representation. Attorney's (not lawyers-there is a difference) are also careful about even participating in chat rooms and blogs such as this while using their actual name (wink-wink) because if someone were to rely upon their advice and it later turned out to be wrong, they could make a claim of agent de facto status and seek damages.
For someone to prevail with such a claim, they would have to prove that they had conversed with the person in such sufficient detail that they came to believe that the person was an expert/professional with superior knowledge. This must go far beyond the general conversation and must result with damages so you people here have nothing to fear.
Although claims of agent de facto are starting to increase in lawsuits, they are usually the last claim and the suits are generally decided on another issue so there has not been a conclusive decision on this matter.
As Deborah said, this status can place an agent in a severe problem area, especially if a sale is near, then fails. Undocumented sellers get upset and start to blame agents claiming that they relied upon their guidance and information to move the sale forward. Buyers get upset claiming that the agent should have done more. Some agents even find the seller and buyer teaming up in lawsuits all while they have not made a dime from the transaction.
Although courts often recognize the real story, it is not their position to inject a defense or an argument into the case and so here stands the agent all alone getting it from both sides. Many banks are so concerned about this situation, that they hire agents to resell REO properties thus they distance themselves from any such claims.
This is not the 50's where a handshake means everything to all people. Today we have many people who seek the first opportunity to sue knowing that you have insurance coverage that is likely to settle before trial.
I am just finishing a book that will go into publication in the next few months. It covers many legal "what if" scenarios, many of them are in real estate. The book accomplishes this by presenting the facts in a short story. The reader then must decide the case as a juror based on that information.
To get the answer or to actually discuss the case with other "jurors", the reader will be directed to a web site where the author or authors representative will be there to guide the legal discussions along to a conclussion. The goal of the reader is to ignore non-essential information while picking out the key elements of the case. It does cover an agent de facto situation. Each story will not allow someone to just flip to a textbook answer and they are designed so that you will have to call on several areas of knowledge to reach the conclussion.
Send me your email and I would be happy to send out a complimentary copy to you.
Thanks for reading my comments.
Britney Johnson answered:
Hi MH and welcome to this group.
I am assumming that the MLS service that you are speaking of is the Northwest Multiple Listing Service?
If this is correct, canceling your listing is easy and does not require the agents participation. Send a letter to the NWMLS directing them to immediately release the listing and to remove from publication.
You should be aware though that cancelling a listing DOES NOT CANCEL your obligations under the contract, but it may cancel the agents obligations to you. What could occur is that you wind up listing with another agent (under another contract) and be liabel to both if the property sells. Both agents could also make a claim that they are entitled to full compensation (not shared) under contract law which is a court matter separate from any MLS hearing.
If you do not relist the property or allow the first agent to continue their marketing efforts, they could make a legal argument that you have unreasonably prohibited a potential sale and could again make an argument for the commission.
My company has a supplemental agreement that is signed and it extensively covers what will happen if a listing is removed or if a buyer does not allow showing (there is a several thousand dollar penalty and we place a voluntary lien on the property through authorization within the contract). My addendum has been legally challenged and succeeded in the courts.
Many agents lose commissions when some unscrupulous sellers decide that they want the commission to go to a relative or a friend who just got their license so they usually "temporarily" remove the property from the market until the listing expires and they relist with them. This is unfortunate for them because much of the hard work (and costs) are at the beginning of a listing. By having clear documentation in place, it can avoid a later dispute.
I am assumming that the MLS service that you are speaking of is the Northwest Multiple Listing Service?
If this is correct, canceling your listing is easy and does not require the agents participation. Send a letter to the NWMLS directing them to immediately release the listing and to remove from publication.
You should be aware though that cancelling a listing DOES NOT CANCEL your obligations under the contract, but it may cancel the agents obligations to you. What could occur is that you wind up listing with another agent (under another contract) and be liabel to both if the property sells. Both agents could also make a claim that they are entitled to full compensation (not shared) under contract law which is a court matter separate from any MLS hearing.
If you do not relist the property or allow the first agent to continue their marketing efforts, they could make a legal argument that you have unreasonably prohibited a potential sale and could again make an argument for the commission.
My company has a supplemental agreement that is signed and it extensively covers what will happen if a listing is removed or if a buyer does not allow showing (there is a several thousand dollar penalty and we place a voluntary lien on the property through authorization within the contract). My addendum has been legally challenged and succeeded in the courts.
Many agents lose commissions when some unscrupulous sellers decide that they want the commission to go to a relative or a friend who just got their license so they usually "temporarily" remove the property from the market until the listing expires and they relist with them. This is unfortunate for them because much of the hard work (and costs) are at the beginning of a listing. By having clear documentation in place, it can avoid a later dispute.
Britney Johnson answered:
Hi Daniel,
There is a misconception in foreclosures that the bank owns the property prior to auction and therefore has the authority to make sale deals. That belief is completly false!
In Washington, the titled owner remains as such up to the moment that the house undergoes the auction process. The highest bidder who has met the minimum due at auction becomes the new owner even though they have no right to possess the property until 20 days after.
The bank can not keep one penny beyond what is owed to them and the remainder is either disbursed to the next lender in line or to the foreclosed upon owner.
The mistake that you made was dealing direct with the bank prior to them having ownership. In your case, there was another bidder and so they did not even get that far. My I suggest that you work with a real estate agent the next time who can help you to put together a "short sale" offer.
Short sales are difficult to get from a bank but most agents have the skill to present a reasonable offer that would be beneficial to all parties. Basically you will need to locate a property that is facing foreclosure, but still has some time to work the deal. Your agent will need to make direct contact with the owner. To do this, your agent may ask that you sign a buyers agreement.
Also consider looking into HUD homes.
There is a misconception in foreclosures that the bank owns the property prior to auction and therefore has the authority to make sale deals. That belief is completly false!
In Washington, the titled owner remains as such up to the moment that the house undergoes the auction process. The highest bidder who has met the minimum due at auction becomes the new owner even though they have no right to possess the property until 20 days after.
The bank can not keep one penny beyond what is owed to them and the remainder is either disbursed to the next lender in line or to the foreclosed upon owner.
The mistake that you made was dealing direct with the bank prior to them having ownership. In your case, there was another bidder and so they did not even get that far. My I suggest that you work with a real estate agent the next time who can help you to put together a "short sale" offer.
Short sales are difficult to get from a bank but most agents have the skill to present a reasonable offer that would be beneficial to all parties. Basically you will need to locate a property that is facing foreclosure, but still has some time to work the deal. Your agent will need to make direct contact with the owner. To do this, your agent may ask that you sign a buyers agreement.
Also consider looking into HUD homes.
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