Publishing > Advanced RE Buying 101 > Chapter 2

  • Industry Introduction - The Toxicity Starts at the Top
  • "Rogue Realtor Malfeasance" - A SECOND Attempt at Industry Clarity​

Industry Introduction - The Toxicity Starts at the Top

Real Estate Brokers and their Agents are NOT Angels by default.  In many cases, the opposite is often true, no matter how good looking or well spoken they are, unfortunately. 

With this publishing, many of you may come to  recognize people you've never met as being more commercially crooked than some of your current favorite antagonists and nemeses in Politics, Commerce, the Media, or Hollywood.

Facts:
  1.  In 1950, the United States sued the National Association of Real Estate Boards for Price Fixing (view) 
  2. In 2020, the United States sued the National Association of Realtors (NAR) alleging they established and enforced illegal restraints on the ways that Realtors Compete  (view)
  3. Home Seller's across the country pay 5-6% in commissions to sell their home via the US Brokerage System in the United States.  That money is contractually obligated by the Seller to his/her "Seller's Broker" who then specifies the portion to be paid to the "Buyer's Broker" upon transaction completion. 
    1. With all money for a transaction coming from the Seller, ALL Professionals involved in the transaction have a "logical" reason to bias their behavior towards the Seller.  The Buyer is secondary. If this buyer doesn't work another one will.  This bias starts with the State Level Brokerage Associations that create the contracts and the Brokerages that operate the state level marketplaces. The Agents that work for the Seller's Broker and Buyer's Broker along with all the inspectors that get involved in the process, also have a reason to slant towards the Seller, no matter who hires them. 
    2. Everyone has heard he phrase "Buyer Beware". What they didn't realize was the true level of beware-ness required.
    3. This was not the more open secret it should have been until now. 
  4. CAR, the California Association of Realtors, is comprised of Real Estate Brokers and Agents. There is no reason to extend them, as an aggregate or individuals, any greater level of trust than you might currently extend to the DNC, the RNC, the CDC, NIH, Big Pharma, Anthony Fauci or Bill Gates, at this time.  
  5. CAR creates and mandates "Purchase Agreements" for the entire State of California.  Those contracts are in fact slanted towards a seller's benefit, although that is tough for most to discern without pointers. 
    1. Oddly, the Monterey County California Contract differs from all surrounding counties to provide even more shade to a seller. 
    2. Unlike surrounding counties, the Monterey County contract does NOT require the Seller to provide Disclosure Documents to a prospective Buyer prior to making an offer. 
    3. This makes buying a home in Monterey County California closer to blind bidding  in Storage Wars, when compared to surrounding counties.  
    4. The Monterey County "after-the-fact" Disclosure process seems to have been introduced in the past 10 to 20 years although no one we've spoken to yet can provide any details on when that shift occurred, who initiated it, nor why CAR allowed it given the healthier but still unsavory situation that exists in surrounding counties.  
  6.  The CAR mandated "Purchase Agreements" include a "required" Mediation clause for disputes arising after the transaction.  That clause stipulates disputes must go through mediation prior to arbitration or litigation. What sounds attractive to a novice buyer is quite the opposite.  
    1. All Mediation in California is subject to "confidentiality" and "non-disclosure". 
    2. If you were wronged and you pursue it via mediation, you may not be able to share any details about it.
      1. How's that for a surprise? 
      2. Doesn't that create a system where a rogue Broker or Agent could pull negative tricks over and over again without creating a public record of it? 
    3. Mediation is not like the Peoples Court (a court of equity). It uses "Court of Law" (maritime law), which relies on case precedent, so you better pay for an Attorney if you want a prayer at clarity. 
    4. That said, Mediation is not binding. Thus the fees paid to the Attorney will seldom get you any type of relief. Typically they will only expose you to a legal system that runs deep in Pirate's roots and one that makes pursuing most civil malfeasance economically futile. 
    5. NOTE:  A harmed buyer can opt out of required mediation, per the clause, BUT...
      1. If you opt out, you are penalized by having to forgo the opportunity to collect litigation legal fees for your troubles
      2. So. If harmed, you either pursue recourse with a gag in a mediation system setup mostly to expose the game of economic futility after the fact OR you pursue litigation in a system where defense attorneys can act in an irrational manner to run up your own attorney fees to make your claim economically futile.  Just the way the Legal Pirates have always liked it.   
"With a system like this in a country that values money more than integrity,
​what could possibly go wrong?
Troublesome Summary
  1. Most State Sponsored contracts across the country will typically have a contractual bias to protect sellers over buyers, because the current system only asks seller's to make a payment for services. 
  2. The California contracts have a mediation clause that requires "confidentiality" and "non-disclosure" as the first step in dispute resolution, even though the stipulation for "confidentiality" is not clearly disclosed.  
  3. Monterey County California has a different State sponsored contract than surrounding counties. It does NOT require a Seller to provide disclosure documents until after an offer has been made, and such a system is even more ripe for manipulation by unethical sellers, agents and brokers. It allows them to market and remarket properties with under disclosed flaws until the perfect "mark" is found, with no mechanism for legal oversight what so ever.
  4. The current system in Monterey County is something that makes the Peaky Blinders and Captain Hook proud, while everyone else licks their wounds. 

Important Questions to Ask Yourself now...
  1. If Brokers and Agents with average moral compasses were aware of these simple systemic facts that protect Seller's in numerous ways to the detriment of a Buyer, might they take advantage of the system to obtain seller listings in situations where there are property condition concerns? 
  2. If Brokers or Agents habitually behaved inappropriately in transactions resulting in mediation disputes, is there any central database run by the California Association of Realtors or any other organization that could be reviewed to see who did what, when and how often? ​

    ​If not, is the real estate market in California actually operating in a more unregulated fashion than is beneficial for Home Buyers and all Consumers in General?

"Rogue Realtor Malfeasance" - A SECOND Attempt at Industry Clarity

In 2007, an Appraiser tossed the Bankers and "some Rogue Realtors" under the Bus in congressional hearings.  Shortly there after, the 2008 mortgage crisis hit.  A crisis fully driven by real estate rogues and those in Banking they rubbed elbows with. In an odd move to everyone in the industry,  Appraiser's got the brunt of blame and oversight when they contributed very little to the problem in relative terms.  It's hard to understand why Appraisers were targeted for Banker and "Rogue Realtor" malfeasance until you realize an attempt was made to out everyone else in 2007 by an Appraiser, and then everything starts to make more sense. 

https://www.banking.senate.gov/imo/media/doc/hummel1.pdf​

CONTINUE TO CHAPTER 3...