Sometimes when dealing in Real Estate, I feel like I’m watching an old 1950’s classic. The buffoon is so dumb that the most stupid things will get them into trouble. This weeks article demonstrates just how stupid people can be in their attempt to save money. You’d forgive Dorothy for asking Toto the question, “Isn’t a property appraisal free?” in puzzled confusion as she watches the stars of this week’s act.
Dorothy is right. Real Estate Agent’s appraise the value of properties for nothing. Whether it be called an agent’s opinion, market opinion or comparative marketplace analysis, it is all for free.
Leverage heard a story this week, about a couple currently divorcing. One wanted to buy the other out and wanted to test the value of the property. The valuer was too expensive and they set upon an idea that they could get a real estate agent to do the same thing for free.
They made a plan that would get the real estate agent to come in and appraise the property on the promise that they would sign an agency agreement. They would sign the agency agreement as an act of commitment to get the most accurate valuation. This is exactly what they did! The agent came to the house and provided a market opinion on the property. They then both signed an exclusive agency agreement. In the exclusive period, one sold the property to the other.
What fools! They could have terminated the agency agreement in the 24-hour cooling off period, but failed to do so. They could have allowed the exclusive period to lapse before selling it to the other, but they didn’t! The exclusive agency agreement allows the agent to be the only person to sell the property. Exclusive agency agreements normally state that, if the property is sold by anyone in the exclusive agency period then the agent must be paid their commission.
What has started out as an exercise to get a cheap valuation may end up having a very expensive outcome for both husband and wife. They have signed an agency agreement, appointed the agent as a selling agent and given no one the power except him. They may now face paying at least half the commission to the agents for this act of buffoonery.
You may shake your head at this absolute act of stupidity. You may think you have been watching Abbott and Costello trying to be real estate agents. The beauty here is that, for the first time, the agent will likely be the winner.