Donald Trump: A Poor Real Estate Examplar

May 29, 2016

Donald Trump got his start (with his dad’s help) in real estate. Everyone knows that.

And Trump lent his name and endorsement to Trump University. Most everyone knows that.

But unless you’re involved in real estate investing, you may not be aware of Trumps other ventures into real estate and his organization’s symbiotic relationship with real estate investor clubs and associations.

There are hundreds of real estate clubs (often called REIAs–real estate investor associations) around the country. Some are affiliated with national organizations; others are independent. Some have only a few dozen members; others have hundreds. But these aren’t just “clubs” in the traditional sense. Their members spend a lot of money. One REIA in the mid-Atlantic has members who spend about $45 million annually . . . just at The Home Depot. Imagine what they spend elsewhere. Then multiply that by . . . well, who knows? Point is: Real estate investor associations are a real force in real estate investing.

Trump and Ragland

Sherman Ragland, head of DCREIA, and Donald Trump.

It was these groups that Trump and his companions worked their ways into over the past 10-15 years. It was one reason why Trump University initially was so successful; Trump was already revered. He had created an image and became a role model for investors. But . . .

Most REIA leaders preach that investors are there to help, to find solutions, for people who are in financial trouble. Yes, those solutions can produce big profits for the investors. But the investors are offering solutions that the traditional real estate establishment (brokers, real estate agents, etc.) can’t. They help people buy homes with lease options. They help restore neighborhoods by buying run-down homes and rehabbing them. They help people sell homes quickly, even when the homes are in terrible condition or when the sale has to be completed in weeks, not months. The message investors hear, and most accept, is: You can get rich by helping people solve their problems.

The problem with Trump is that he’s not concerned about helping solve other people’s problems. In fact, Trump despises people with problems.

In 2006, nearly two years before the housing collapse, Trump said:

I sort of hope that happens because then people like me would go in and buy. If there is a bubble burst, as they call it, you know you can make a lot of money. If you’re in a good cash position—which I’m in a good cash position today—then people like me would go in and buy like crazy.

That was real estate. The problem is: Trump doesn’t have any sympathy or empathy for anyone in a tough situation.

Remember the John McCain statement:

He’s not a war hero. He was a war hero because he was captured. I like people who weren’t captured.

I’m writing blog this on Memorial Day weekend, and I wonder if Trump (who never served in the military) feels the same way about members of the armed services who died serving their country. Are they heroes only because they died? But does Trump only like people who didn’t die? Does he consider those who died, to use his term, “losers”? (Oh, heck. I don’t have to wonder. Of course he does.)

Then there’s this:

Ariana Huffington is unattractive, both inside and out. I fully understand why her former husband left her for a man. He made a good decision.

That’s consistent with “Kick ’em When They’re Down Donald.”

From the National Review on Trump and eminent domain:

“Most of the time, they just want money,” he said. “It’s very rarely they say, ‘I love my house, I love my house, it’s the greatest thing ever.’ Because these people could buy a house now, that’s five times bigger, in a better location.” Trump has firsthand experience with eminent domain fights. In 1993, he tried to purchase the home of Atlantic City resident Vera Coking to expand his hotel and casino. When she refused to sell, New Jersey attempted to condemn the property and have her evicted. . . .

Trump later said he offered Coking $4 million; her grandson said Trump’s top offer was $1.9 million. Whatever the sum, Coking refused. In July 2014, with Coking now in a San Francisco retirement home, her family sold the property for $530,000. Trump called that amount “peanuts.” “She saved me a fortune!” Trump said with amusement. “I didn’t build a hotel in Atlantic City, which is dying, okay? I should send her a letter [of thanks.] I mean, honestly!”

There are dozens of other examples. But the point is: Trump is not, nor has he ever been, a shining example for real estate investors to follow. In fact, The Donald typifies everything a real estate investor should not be.

And with that lack of empathy, you don’t have to wonder what Trump would be like as President.

Advertisements

Lending Money to a Rehabber? Protect Yourself!

March 18, 2015

Thief With MoneyI recently received the following question from an investor who is considering lending money to a rehabber. I’ve been there and done that and learned a number of very expensive lessons. Hopefully, he–and you–can avoid some of my mistakes. (It’s a long post, but well worth reading!)

I recently came across an ad on Craigslist for a house flipper looking for investors to help finance some of his projects. He specifically needs funds for the renovations and will fund the purchase price himself or through another investor. He says he has a proven track record and is willing to show his documentation. He mostly operates in the $100K to $200K range. 

He typically will need about $15K to $30K for the renovations, which he will mostly do himself. The projects typically take about 10 weeks from start to finish. He spends about a month with renovations and then 6 weeks to sell. 

In exchange for lending him the renovation costs – within 48 hours after closing I would receive the original investment plus 25% of the profits. He said he usually nets about $20 – 30K on a deal. So 25% of 20K would be a net profit for me of 5K. 

I’m very interested in doing this but am wondering what type of precautions should I take? I obviously will have an attorney look over the paper work. I’m not sure if I can put a lien against the property, if that is even an option. 

How do I protect myself? How would you proceed going forward?

Thank you for the question.

I was involved in a very similar situation a couple of years ago . . . and ended up losing $15,000 because I made some mistakes. (Dumb mistakes, really.) And I lost another $14,000 in another deal a few years before that—but it still involved “lending” someone else money for a rehab. (Different mistakes.) I discuss them both below. I’ll call the more recent rehabber “Dave T.” And I’ll call the other investor “Marty W.” So you’re getting the benefit of a $29,000 “education” here.

You can avoid making most of the mistakes I made.

First, a disclaimer: I’m not a lawyer, so this isn’t legal advice. And that leads me to my first recommendation.

Involve a Lawyer

The first step, of course, is to have a lawyer familiar with real estate and real estate investors review the paperwork. And use a good one. Not a pre-paid legal services type. I do have Prepaid Legal Services. They’re OK for some things. But not for this. (Both of my situations described below absolutely baffled them.)

Do Your Due Diligence

Second, do your due diligence on the investor. I did that, and “Dave T” came up clean. I checked with the leaders of two local real estate investment associations. Both knew him and said he was a good guy. He invited me to look at his ongoing rehabs one Saturday, and I did. The rehabs looked good. The crews were competent. I checked on some of his previous rehabs, and they’d sold and been profitable.

Still, pay to do a background check on your rehabber. I use a company called BeenVerified, but there are a bunch of others out there. Those background checks won’t pull up everything, but they’re a place to start.

As I found out, none of my research into the rehabber’s past guaranteed that he’d continue to operate profitably. I suspect that he ran into a series of bad rehabs. I lost $15,000, but there were people who lost $50,000, $75,000, and more on some of his other rehabs around the same time. There are limits to checking out how a person has done in the past. What you’re concerned about is how he’s going to do with your money going forward. Still, don’t skip this step; red flags in the past shouldn’t be overlooked.

Put a Lien on the Property

Third, you absolutely must put a lien against the property. Yes, it is an option. In fact, it’s more than an option. From your perspective, it is an absolute requirement.

Depending on how many people he’s borrowing from (the “other investor” or a hard money lender), you might be in second, third, or even fourth position. Second is OK if the numbers are solid. Third is somewhat risky. And fourth position (meaning the other three get paid off before you do) is extremely risky. Try for first or second position.

Note: That’s one of the mistakes I made. The guy I was dealing with said he’d record the lien, but never did. It’s not much consolation, but that’s how he handled his other investors, too. So, stupid as I was, I wasn’t the only one.

So you must make 100% sure the lien is recorded. You do that by never, ever handing the rehabber the money. You always go through your attorney or an independent third party. And the money doesn’t get handed over until the investor proves he owns the property and until the lien is recorded. Your attorney or you title company can help you with that.

Now you’ve gotten to the point where you’ve lent the money with the loan secured by a mortgage on the property. That doesn’t guarantee you’ll ever get your money back. It’s possible, for example, that the investor just got his numbers wrong. Or (as happened in 2007 and 2008), the market collapses and what would have been profitable in January is a loss in September. Or, more likely, there are undiscovered repairs that have to be made.

For example, “Dave T” told me about a rehab he was doing on townhouse in Washington, D.C. It turned out that there was a problem with the sewer line between the street and the house. He’d built in a 10% “cushion” on his $100,000 rehab (his properties would sell for $530,000-$650,000 or so once done), and it all vanished with that one unexpected repair. Or perhaps something isn’t up to code and when the rehabber or his contractor goes to pull the permits, the city requires an expensive update, upgrade, or modification.

When I rehabbed a property once, I got one bid of $50,000 and another for $130,000. The higher bidder was proposing a certain way to address asbestos flooring in the kitchen. The lower bidder was proposing another strategy. That alone added close to $30,000 to the higher bid.

Where the lien should protect you is: If the investor sells the property, you’ve “clouded the title” with your lien. It’s got to be satisfied—that is, paid off—before the transfer of title. If there’s enough money (remembering that the first mortgage gets paid off first, then the second, then the third, and so on), you’ll get your money. If there isn’t enough, the investor will have to negotiate with you and perhaps the other lien holders to accept less than you’ve agreed to.

Stay on Top of the Rehab

If you’re in the same town or city as the rehabber, drive past the property every week. Make sure that construction is proceeding. (If it isn’t, maybe the investor has run out of funds. It may be too late for you to get your money back, but don’t let it come as a surprise when, 6 months later, the job still isn’t done. And your lawyer may be able to suggest some steps to make your position more secure—such as placing a lien on the investor’s other assets.

Brawley Profit ProjectionsIf you’re not in the same town or have someone else drive past every week. Another true story of how I lost another $14,000: I provided “Marty W” (who had a glowing recommendation from a real estate guru) $14,000 to rehab a property in Spartanburg, South Carolina. I’m in Northern Virginia—460 miles away. At the time, at least, “Marty W” was hanging out in Boca Raton, Florida. In this case, the paperwork was done properly. However, the rehabber apparently ran out of money and never got around to rehabbing the property. Tip: Check on your guy’s current projects. Apparently, “Marty W” had bought a bunch of lousy properties.

Another problem: “Marty W” gave me some wildly inflated comps. I was given comps on properties that sold for $65,000. Marty’s worksheet claimed a “Fair Market Value” (the after-repair value) of $70,000. In truth, this property, rehabbed, might have sold for $20,000. I got that figure from a Realtor who knew the area . . . but after my money was gone.

This was back in 2006, before “virtual” or long-distance investing became popular. Anyhow, I never received any word from Marty that there was trouble. It’s just that the repayment date came and went and there was no money. If I’d been in Spartanburg, I could have seen this property, compared it to the comps, and soon would have seen that no rehab was being done.

So: You either need to be there or you need someone good and trustworthy—“boots on the ground”—to watch out for your interests.

Make Sure the Title Company is Aware of Your Lien

Here’s another thing to worry about, and another possible solution: A few years ago, I had an option on a property. I filed a “Notice of Agreement” at my local courthouse. That was intended to cloud the title—to alert anyone checking the title before a sale or transfer that I had an interest in the property. Although I decided not to proceed (this was during the market collapse in 2007), I had not removed my Notice of Agreement. It was still there.

However, the property was sold/transferred twice without anyone noticing my Notice of Agreement. Only when the third owner attempted to sell it to a fourth—in 2014—did the title search uncover my Notice of Agreement. The point is: Even with a lien or other instrument that should appear along with the title, those can be missed.

How do you address that issue? Stay on top of the property. If you know the title company that your investor is planning on using, send them a certified letter with a copy of your documentation alerting them that you’re a lien holder on the property. Your lawyer should be able to suggest other methods, too.

Have Access to the Rehabber’s Books

If the rehabber is just promising a set return–say 10% or 20%–on your money, you don’t need this. But if a rehabber is promising you 25% of the profits, then you must have a way to verify what the profits were. You want to make sure that all the costs are what they’re claimed to be. And you also want to make sure that those expenses went for your rehab–not some other rehab.

Conclusion

There’ nothing you can do to ensure a 100% return of your money and the promised profits. Sometimes, despite everyone’s best intentions, it doesn’t work out. There’s always risk. What you need to do is minimize all the risk you can. And, as discussed above:

  • Have a good lawyer—one who knows real estate—involved from the beginning.
  • Do your due diligence, though understand that at best that gives you an accurate history, not a view into the future.
  • Put a lien on the property.
  • Stay on top of the rehab.
  • Make sure the title company is aware of your involvement and your standing in the transaction.
  • When you’re being paid a percentage of the profits, condition your loan on your being able to access the rehabber’s books.

New Posts Coming!

March 18, 2015

Calendar PagesWow! I hadn’t realized it had been so long (years, in fact) since I’d posted anything here. I’ve been busy posting elsewhere–on Trulia and Yahoo! Answers, among other places. (Plus a bit on Zillow, some on LinkedIn, and some elsewhere.)

I also have some “gigs” on Fiverr where I get paid a miniscule amount ($4) for fairly in-depth, detailed answers. I do it for the mental challenge, as well as to help people get out of (or avoid) sometimes sticky situations.

Anyhow, I thought I’d share some of those with you, as well as generate some new original content for this blog. So stay tuned.


We Read This Crap So You Don’t Have To: Mike Warren

November 9, 2011

Would you buy a car if the car dealer itself had a banner: We only sell overpriced clunkers.

Would you go into a restaurant if the menu had a warning: Our hamburgers are made from spoiled meat from diseased cows.

Then why would anyone respond to a real estate guru’s promotion boasting about one of his own students going bankrupt (presumably after following his real estate advice)?

Mike Warren email on his student's bankruptcy Here. See for yourself:

“A student”–presumably Mike’s student–had to declare [except Mike misspells it “delcare”] bankruptcy because “they” [should be “she,” not “they”] were over-leveraged on properties she’d bought.

Never fear, though. Mary Jane wants to keep doing what she’d been doing. Never mind a little bump in the road like a bankruptcy. So Mike’s got a way for Mary Jane to keep buying real estate. And he says it’s honest, ethical, and legal. It could be.

My question is: Will it help Mary Jane make some money? Or are the only folks making the money Mike and his “buddy”?

That sure is a great testimonial: My buddy can help you buy more real estate, even though the real estate you bought as a student following my advice landed you in bankruptcy.

I think I’ll pass.


6 Tips To Help Your Business From “Talk Like A Pirate Day” (September 19)

September 14, 2010

Talk Like A Pirate Day: Sept. 19

It’s almost here–the annual “Talk Like a Pirate Day.” Mark your calendars for September 19. But it’s not just a day for having fun (see below), but even for picking up a few useful tips.

OK. So what is “Talk Like a Pirate Day“? From Wikipedia:

International Talk Like a Pirate Day (ITLAPD) is a parodic holiday created in 1996 by John Baur (Ol’ Chumbucket) and Mark Summers (Cap’n Slappy), of Albany, Oregon, U.S., who proclaimed September 19 each year as the day when everyone in the world should talk like a pirate. For example, an observer of this holiday would greet friends not with “Hello,” but with “Ahoy, matey!” The holiday, and its observance, springs from a romanticized view of the Golden Age of Piracy. The holiday is a major observance in the religion of the Flying Spaghetti Monster.

The official site, with lots of links, is at http://www.talklikeapirate.com/ You can see how people celebrated in the past–parties, get-togethers, and more. And I particularly like the sites that will translate text–or even full web sites–to “pirate speak.” See this one: Translate-Pirate.com To see what the White House web site looks like as spoken by a pirate, click here. (No, no one is accusing President Obama of being a secret pirate!)

Enough fun and games. Well, maybe not. But, still, is there anything to be learned from Talk Like a Pirate Day? Absolutely. Things that you can use to help get more clients and more business. (Some of these were written with Realtors in mind, but they’re all applicable to anyone wanting to improve their business.) And a few other tips, besides.

Keep the Calendar in Mind: Why is September 19 Talk Like a Pirate Day? The day was actually triggered when one of the co-founders injured himself on June 6, 1995, and yelled “Aaarrr.” When they decided to “spread the word,” they recognized that June 6 was D-Day. Out of respect, they chose another date. So: Look at the calendar. And in addition to the observances you’re aware of, be sensitive to observances of other religions and other cultures before scheduling an event. If you’re doing a mailing, you may want to time it so you’re not competing with lots of other mail.

Make it Easy to Remember: So, why September 19, and not the 18th or the 20th? It turns out that September 19 was the birthday of an ex-wife of one of the founders. That was easy for him to remember. The same lesson applies here, from the way you brand yourself to the name of your web site. In this case, the point is to make it easy for customers and clients to remember you . . . and how to contact you.

Learn How to Publicize Your Activities. How did Talk Like a Pirate Day catch on? The event’s founders sent a letter to humorist Dave Barry in 2002. Barry liked the idea and promoted it. The rest, as they say, is history. The take-away message here is that the media can help you. Just identify the right–the most appropriate–outlets and get the word out. If what you’re saying or publicizing has value, you may well receive beneficial coverage.

Do Good Deeds. Set up activities that benefit charities. Talk Like a Pirate has a section on its web site for such activities. It even has a nicely-done 8-step planning process. It says:

As everyone* knows by now, International Talk Like A Pirate Day is mostly about (wait for it) talking like a pirate.

But almost since the beginning, some fine folks have used the day as an excuse to raise money for good causes.

The Marie Curie Cancer Care team in the UK was first out o’ the gate, urging folks to organize piratical fund-raisers to support their efforts to provide research and end-of-life care for cancer patients. Others have joined in over th’ years to use ITLAPD as a way to raise money for everything from feedin’ the hungry to sponsoring local children’s programs.

This year, the Pirate Guys are urgin’ their fans around the world to use their Talk Like A Pirate Day parties to pass the pirate hat for a worthy cause, be it social, humanitarian, cultural or political.

Which cause? That’s up t’you. There be no end o’ good causes that could use an infusion o’ doubloons. Read on down for some ideas.

Cap’n Slappy has a soft spot in his black heart for Doctors Without Borders/Medicins Sans Frontieres, the international medical humanitarian organization that brings medical care to people all over the world in times of crisis. They even offer tips for making your fund-raiser a success – and an easy way for you to collect donations on line! Tell’em Cap’n Slappy sent you!

Give Something Away. Talk Like a Pirate has some downloadable ring-tones. (Who could resist “It’s still ringin’ ye scurvy dog!”)? Sure, you can do ring-tones. But offer on your web site free reports, or free information. Give consumers a reason to come to you, remember you, and do business with you.

Have Fun. I think that point’s already been made.

So, make plans for Talk Like a Pirate Day. But take away some tips that can help you on the other 364 days of the year as well.


Some Truly Stupid Email Subject Lines

July 23, 2010

Do you ever feel that “enough’s enough” as far as stupid, misleading, or just peculiar email subject lines are concerned? I know I do. And it seems like I’ve been receiving more and more of them recently dealing with real estate investing. (Well, not really real estate investing. More like selling products to would-be real estate investors.) I guess it’s because the “ordinary” or straightforward subject lines don’t work as well any more.

It’s gotten like the headlines you see (if you choose to look) on tabloids like News of the World. Sort of a “Can you believe this? Can you top this?”

Here are just a few recent ones that have slithered into my in-box:

Scandalous Mexico Photographs exposed [Greg Clement. February 23, 2010. First line of e-mail: “I will unveil dozens of scandalous pictures from Team Realeflow’s recent trip to Mexico on Thursday’s “Wealth Protection” webinar with Jeff Watson.””]

My wife is scamming my brother and I. It’s B.S.! [Josh Cantwell: June 18, 2010.” In addition to being grammatically incorrect (should be “brother and me,” Cantwell’s e-mail doesn’t make any sense vis-a-vis the subject line: “I put together some free training videos and an ongoing case study of a REO that we just bought, and that my brother Mark is rehabbing with my wife Lisa’s IRA funds. This deal has some super cool, and one not so cool, twists to it, and it going to be a great case study for you to follow and learn from.”

My friend Lee has lost it… [Mike Ochsner: April 23, 2010. “I’m not sure if you were on the webinar last night, or if you came and left, because you were unsure exactly what you were seeing, but I’ve got to say, I was shocked by the whole thing. Lee has never, I repeat NEVER, done anything like this.” As in Casablanca: “Shocked! Shocked, I say.” In this case, Mike was shocked that Lee offered the some sort of discount  on an overpriced program–probably along the lines of the “$37,000 value for only $1,995” pitch.]

**Newsflash** Google Is Run By COMMUNISTS [Preston Ely: July 21, 2010. Explanation: “you’re not gonna believe this … so the other day, Google shut half my advertising campaigns down.  They wouldn’t even give me a reason.  Apparently they are communists who don’t like their advertisers making actual money. But that’s not all … Then I’m at lunch with this dude who tells me that Google secretly accepts bribes (I mean payments) from companies to ensure they get top organic rankings! Can you believe that??? Freakin crooks!” That’s a long-winded attempt to promote a book and a product that tells you how to get high rankings from Google.]

“Minnie Mouse Caught Cheating On Mickey With Preston Ely!” [Preston Ely: July 1, 2010. Here’s the explanation: “I used to love Minnie Mouse.  So much so that I wanted to punch Mickey in the whiskers and steal her.  There is a relatively good chance that you can’t relate.   I tell you this for the same reason I tell you anything, which isfor no reason at all.  I just happen to be hosting a huge real estate / internet marketing event in Orlando July 22-25, and it reminded me of my youthful Disney character crushes, of which there were many (*cough* Princess Jasmine *cough*).” Well, that may be more than we need to know]
 
“Caught On Tape!”  Preston, Britney Spears, & Marilyn Manson! [Preston Ely: July 5, 2010. OK, this is another one, though not quite as peculiar as Ely’s fascination with Minnie: “Don, I’m gonna be honest … the video you’re about to see if maybe one of the most scandalous I’ve ever made.  I almost wasn’t going to send this to you, but you’re going to learn soooo much that I just have to. It’s over two hours of me teaching marketing and motivation at the Freedom$oft event I hosted in March. You’ve never heard anything like this before in your life – I promise you.” I’m still not sure what Britney Spears and Marilyn Manson have to do with this.]
 
porn isn’t the answer [Preston Ely: March 25, 2010. Talk about a killer app: “Did you know that pornographers used to be the #1 generator of $$ on the internet?  True story.  Feel free to use that little fun fact at the water cooler today in the office.  Thankfully they’re not anymore.  Guess who is? We are.  You may not have known this, but my friends and I make more money on the internet than anyone in  the world.  We literally dominate it.  Google my name if you don’t believe me.  (preston ely)”

Do you think DC is sexy? Or does it look like he got beat with an iPad? [Than Merrill: May 11, 2010. “I know DC Fawcett really well…and he is decent looking guy, but he is definitely not Brad Pitt. And seriously look at this picture?  Who takes a picture like this? Who I say? Nobody normal that I know… However, today DC must be wearing some special cologne or milkbone underwear because I have never seen such madness. We ran a webinar with him this morning about his “Commercial Short Sale System and Partnering Opportunity” and as soon as the webinar ended the phones in my office blew up.”

Greg Clement & Jeff Walker Are Gay [Preston Ely: August 9, 2009. “Web definitions for gay: cheery: bright and pleasant; promoting a feeling of cheer; “a cheery hello”; “a gay sunny room”; “a sunny smile” What’d you think I meant? You’d be gay and cheery too if you had the bad ass SIMS system working for you like they have for themselves!’] 

COFFEE ENEMAS OR IRS ENEMAS…WHICH ONE IS HEALTHIER? [Dwan Bent Twyford: June 8, 2010. Honestly, Dwan and her husband Bill seem to be two of the more straight-shooting folks, and they send out far fewer e-mails than the folks above do. And perhaps the subject line isn’t misleading. From the e-mail: “If you have ever been on the receiving end of an IRS enema, you know how much control they actually have once they set their sights on you. Having personally gone through this. Join me on WEDNESDAY EDUCATIONAL DAY which is on THURSDAY this weekI never want to see it happen to you!
.
In a related category are the “Apology” e-mails. Often, these “apologize” for supposed computer crashes after an all-to-successful product introduction, or apologies for not having enough inbound lines for a webinar. You’d think these folks would get tired of playing the village idiot.

I am so sorry about what happened last week. [Greg Clement: February 9, 2010. This one almost sounds legitimate: “Last Thursday’s very important INTERNET training webinar was cancelled.  Jeff Walker got sick and couldn’t make it.”]

FW: sorry my fault [Greg Clement: February 2, 2010. “The email I sent yesterday had a link in it that didn’t work for a lot of people.  SORRY.” This sort of thing seems to happen a lot.]

Sorry, I sent you the wrong link. [Greg Clement: January 19, 2010. “I just sent you an email and it had the wrong link in it. Ignore the link that I sent you in the previous email, it won’t get you on the early bird webinar.”

*whoops* no links in that last one … (How to HIJACK Your Buyer’s Brain For Billions) [Preston Ely: June 3, 2010]

That’s the sort of e-mail subject lines being sent out now to try to capture the public’s clearly waning attention. Wonder what it’ll take next year? And, perhaps more seriously, it’s becoming more and more difficult to take these folks, their pitches, and their big buck products seriously. I’ll admit: McDonalds sells hamburgers with Ronald McDonald as a pitchman. But there’s a difference between a 99 cent hamburger and a $1,995 real estate program.


Buyers Say the Darndest Things: Bowser the Buyer

December 4, 2009

Remember Art Linkletter’s “Kids Say The Darndest Things“? Well, would-be real estate buyers sometimes say some pretty darned odd (and funny) things, too.

I’ll start posting some of them here. I’m not making fun of these folks, but in some cases I do wonder how they manage to even get up in the morning. In other cases, the would-be buyers are vastly overcomplicating a situation. We’re not talking about the intricacies of real estate transactions. Usually, it’s just plain common sense that seems in short supply.

So, let’s begin.

This one comes from Trulia, a consumer-oriented Web site with a question-and-answer area, where I post answers pretty frequently. Names have been removed to protect the innocent. (Curious? Here’s the link to the full posting.)

Does B****** Real Estate not want to sell houses? They consistently hold open houses without listing the address.
Apparently, they don’t want you to buy a house they are selling unless you are working with one of their realtors. I’ve spent hours just trying to track down the address of a supposed “open house” they are holding. Their website is convoluted and won’t let me search their listings (the “registry” doesn’t work and you can’t see any info without it). I refuse to work with one of their agents for the simple fact that they have made my home search process such a pain in the neck.

Huh? I guess I understand your frustration at not being able to determine from the one company where the open houses are. But the only reason to keep pounding your head up against a brick wall is that it feels so good when you stop. So: Stop pounding.

Contact a Realtor from another company. You choose. And you screen the Realtor so you’re comfortable with both the company and the Realtor. then explain what you want. And–here’s the good part–it’ll mean less commission for the listing agent and for the listing firm! You see, the commission is already agreed to. If you buy the house through the listing agent, he/she gets both ends of the commission. So, help the company share the wealth . . . with an agent of your own choosing.

Notice the would-be buyer says he’s spent hours trying to track down the address of a single open house. Maybe he could have called and asked? Or, as I suggested in my answer, maybe he could have called a Realtor with another firm?

And beyond that, I’m reminded of the story of a dog chasing a car. The dog chases and chases it. One day, it finally catches the car. Success! Except . . . now that it’s caught the car, what does he do now?

In this case, we have Bowser the Buyer chasing open houses for hours on end. What would happen if Bowser the Buyer finally finds out the super-secret location? Imagine: He discovers the location, goes to the open house and, miracle of miracles, decides he wants to buy the house. Well, what then? He says, “I refuse to work with one of their agents.” So, he’s got no agent of his own and he refuses to work with one of theirs.

Like they say, you can’t get from here to there. But I guess you can keep yourself pretty busy running in circles.