I am going to a closing today for a short sale in Elk Grove. It kind of surprised me when I looked at my production that about 25% of my closed Sacramento short sales this year are homes in Elk Grove. That's probably because Elk Grove was the fastest growing city in the United States in 2006, and look at what happened. When prices fell, Elk Grove took a tremendous hit, and values fell by more than 50%. A short sale in Elk Grove is almost a given. Although, I did sell another home in Elk Grove this year that was not a short sale, but those are few and far between. It seems almost all homes for sale these days in Elk Grove are a short sale or an REO.
In this particular Elk Grove short sale, I received a call from the seller over the weekend. She was concerned that when she went by to check on her house, the buyers were inside. They were inside without their agent. In fact, their agent was nowhere to be seen. The seller was shocked, and I don't blame her one little bit.
The buyers even thanked the seller for "stopping by" and turned back to showing the seller's home to their friends. How's that for attitude?
Now, ordinarily, one does not give a key to the buyers before escrow closes. Not even on a short sale. But some buyer's agents make the mistake of treating a short sale like it's not a real transaction. The sellers, not wanting to rock the boat this close to closing, asked that I not make a big deal out of this even though it is a big deal. It's a huge deal.
I called the buyer's agent. I could see that she accessed the lockbox last week because I have a record online of every agent in Sacramento and Elk Grove who entered that short sale. So, she must have given the key to the buyers before the weekend. Real estate agents have no right to give buyers possession of a home they do not yet own. Not only is this against MLS regulations and against the law, it's an extreme liability for that buyer's agent, her buyers, and the sellers, too.
The buyer's agent snapped at me when I politely asked if she had given the key to the buyers. "So, whatdya want? Do you want me to get the key back?" she asked incredulously, as though I had a lot of gall to make that request. Hello? Are we on the same planet?
You know, nothing floors me in real estate anymore. That's probably because, whether I realized it or not, I am an Elk Grove short sale agent. I don't just sell short sales in Sacramento. You know, I work in a very strange environment. Unfortunately, short sales sometimes tend to bring out the worst in people.
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Certified HAFA Specialist
My Sacramento Real Estate Listings
Elizabeth Weintraub is an author, home buying columnist for The New York Times-owned About.com, a Land Park resident, and a Land Park real estate agent who specializes in older, classic homes in Land Park, Curtis Park, Midtown and East Sacramento. Weintraub is also a Sacramento Short Sale agent who lists and successfully sells short sales throughout the four-county Sacramento area. Call Elizabeth Weintraub at 916.233.6759. Put 35 years of real estate experience to work for you. Broker-Associate at Lyon Real Estate. DRE License # 00697006.
The Short Sale Savior, by Elizabeth Weintraub, available at Amazon.com.
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The old "early key" situation seems to rear its ugly head every once in awhile. I remember one specific instance where a buyer agent provided keys early to a buyer, and they moved in. The key was given on a Thursday. Escrow was to close the next morning. Alas, you know the rest of the story. The loan didn't fund, and it caused significant anxiety for several parties for an additional 11 days.
What a piece of work that agent was! I've seen folks treat REOs and Short Sales like this when it even comes to SHOWING the homes. The Buyers Agents that do this don't take their jobs or responsibilities seriously at all and it really drives me mad.
I have seen that happen and right now it has become a little bit of the wild west out there! I think there are so many challenges and loan delays that consumers are losing it. I use a Supra for all my lockboxes since taking a key early is very likely to happen!
Elizabeth, I do have a ton of respect for the professionals like yourself that do Short Sales, but I was going nuts when I first had my two short sale listings. I don't know where these agents came from, how they passed the exam to be licensed and honestly I was extremely uncomfortable to put myself in any proximity to those ignorant and unethical agents. Scary.
Elizabeth - I can't think of anything that pi$$e$ me off more than an agent who gives a buyer access to a home before closing. I even had one agent call me 2 days before closing and said "I have taken the house key from your lockbox ... how soon can you get your lockbox and sign off of the property?"
Hi Elizabeth, this one takes the cake. This is not even a "Speechless Sunday" post --and I'm speechless!
Unbelievable that the other agent doesn't realize the liability behind all this! This is why I take the lockbock off after all inspections/contingencies have been removed.
Elizabeth - WOW - this is a violation of everything we in the real estate community are suppose to represent. I hope you reported the selling agent to the proper authorities.
I'd say it's unbelievable that the agent would do that - but I too have seen it happen - and the liability issues involved make my head spin!! Just SO wrong on so many levels to think it's OK to give buyers keys before closing & without permission - oh wow!!
Report her to her broker and if that does not get the required result then report her to the state. She should know that this is basically trespassing. She should not be giving keys out and yes she should get them back. UNREAL.
Tell your broker to tell her broker- very scary!
Hi Elizabeth~ It is appalling that some agents don't think the rules apply to them! Those are the ones that deserve to have their license revoked!
I just heard a story in my market where the buyers actually moved into the houe before the short sale closed and then there was a big glitch and it wasn't going to be approved or ever close. So, the buyers were desperate to find a place to live and had to move out immediately. I actually thought it was kind of funny in a how stupid are people kind of way.
Who you gonna sue? The agent who gave out those keys before settlement!
I had a non short Sale home close about a month ago and had a similar situation. My seller went back to the house to get a couple things out of the house the week BEFORE the closing.
He was slightly surprised to see Every light on in the house...
He walked up to the front door, it was open...
low and behold the buyer was inside "fixing a few things". he took the door off the microwave because he wanted to have it repaired, he has all his sample paint colors so he could put them up and see what he liked, etc etc. My seller questioned how he got in and he said the other agent gave me the code. I ALWAYS use electronic boxes to avoid this situation, but the homeowner was a builder and wanted me to use his combo box so service people could get in and out easily. Apparently, too easily.
HI Elizabeth,
No matter what you might do with any given agent, if they are prone to those types of "taking liberties", there may not be anyway of stopping them other than removing the lockbox after inspections and forcing anyone who wants access to contact you. I totally understand your frustration. Your lesson is a good one for all of us and puts me on notice to make sure we have those reinforcement discussions up front, much the way we have always done with relocation buyers.
Best Regards,
Gayle
This is beyond belief, and the attitude is the icing on the cake! There is no harm in the buyers wanting to show their friends, in fact I support anything that keeps them engaged, but for heaven's sake, make an appointment and GO WlTH THEM! I stopped by a short sale listing once about a week before COE to find the buyer's mother puttering about. When I asked what she was doing there, she announced that she was waiting for Stanley Steemer! I could barely scrape my jaw up off the floor.
I have no tolerance for situations like this. The buyer's agent doesn't have to answer to me, but I will make sure they answer to the board and local authorities if warranted.
Yes...the attitude IS the icing on the cake here. Wow. You summed it up, Elizabeth, with..."it's an extreme liability (for both parties)" ...and in my opinion...a really big liability to the seller when you get right down to it. After all, it's their insurance still covering the property. What was this agent thinking??????!! On rare occasions we used to allow early-buyer-possessions (with all the legal documentation that accompanied such action) back in the day, but with the current environment, I'm glad we've eliminated them altogether.
It doesn't sound as if the selling agent thinks she did anything wrong! She would be the first one sued if something happened and the homeowners insurance had to pay anything. Sometimes you just have to wonder "What is WRONG with some people!" You are right even though your sellers didn't want to make a big deal out of it IT IS A BIG DEAL. At the very least, she should be reported to the MLS. Congrats on helping so many Elk Grove homeowners!
Elizabeth,
Many years ago, I stopped by one of my listings before the closing to pick up the sign and lockbox. The Buyer had actually moved his furniture in the day before the closing as it was more convenient! Needless to say, the Buyer's Agent and I had a bit of a discussion. It turns out the Buyer got the lockbox code from the inspector. Needless to say, I now either use electronic mail boxes, or I change codes often!
Kerry
A local teacher tells a story of a prepossession given to buyers of a pricey waterfront home - that burned to the ground before it closed.
Guess who was not insured yet because the tranny hadn't closed?
Guess who was not covered for 'renters'?
Prepossession is one of the riskiest things that can happen in a transaction--and in most cases, it shouldn't be permitted to happen.
And in short sale transactions that have to be submitted 'just so' to the bank and can be rescinded . . . even more so.
I would have immediately notified my broker of the situation. Let him/her call the buyer agent broker and deal with it
The thing is this agent has now ruined it for everybody else. Now, right after the home inspection and appraisal, that lockbox is coming off the house. If the buyer's agent wants to do a final walkthrough, they'll have to drive to my office to get the key and then bring it back. Plus, come back to my office when it closes to pick up the key. I probably won't do this to agents I know but others, well, what else can you do? This isn't the first time it's happened this year. But it's definitely the most blatant.
I promised the seller I would not report the agent. My duty is to the seller.
Hope the loan isn't FHA and the lender doesn't find out about it. THAT could hurt BIG TIME too!
It sounds like some real negligence on the part of the broker. It's not a complicated short sale issue but one of the basics of real estate practice. <shudder>
Elizabeth unfortunately this happens more often than it should and in traditional sales as well. I once had an agent give the key to her buyers while my clients were still living there. They came home the day before closing and the wallpaper was ripped off the walls.
I am hearing more about agents improperly giving buyers keys and lock box codes. I guess that they forget they aren't allowed to do that. Some probably just don't care.
Elizabeth,
You promised the seller (your client) not to report the agent. On the other hand, once the transaction is complete, he/she is no longer your client.
This agent needs to be stopped from doing this in the future.
Good luck on the settlement.
Rich
Elizabeth, I'm with you.... they cannot possibly be living on the same planet. Congrats on the feature.
Elizabeth - I have been on both sides of this fence. As a listing agent, and as a buyer's agent that had to forcefully say "no" when pressured by my buyers to gain access before closing!
I agree with comment #18, I would have reported that with the quickness.
Wow. I can't imagine. Around here keys are actually handed over by the listing agent, not the buyer agent, at the closing table. It's not theirs until the money is handed over & the deed is on record.
Short sales may bring out the worst in some people, but it brings out the best in others (like you and those who are skilled in the short sale arena). I had this exact same thing happen to me last year. What happens if the deal doesn't close--if the loan doesn't go through at the eleventh hour? Crazy!
I can't imagine the liability issues that she is opening herself and her clients up to. Amazing what people will do.
I would disagree with your not reporting the other agent. After the transaction closes you should report them. When it comes to professional misconduct a seller shouldn't have the say on what happens next.
I recently had a buyer that wanted me to open the house so they could have furniture delivered... Umm, no. There are some folks that either have a hrd time saying no, or just don't have the sense to...
Elizabeth - Congrats on a well deserved feature... Like you, there isn't too much that surprises me anymore - that's just not right.
I had to read this based on the title, Elizabeth...and I think I would have blown a gasket or two over something like this. That you have handled it with such grace speaks volumes of you and your integrity as an agent.
I am amazed at the gall of some agents..I went to take the lockbox off a home that had been signed but not recorded due to complications from the bueyrs lender...lo and behold the buyers were already living in the home! I was so furious....and she was so non chalent about it when I called the otehr agent!
Some buyers and their agents dehumanize the seller who is in foreclosure. Then they get indignant when you call them on it.
I can't even imagine that an agent would give keys to any buyer in any situation prior to closing!
If early keys is going on in your area, you and your fellow agents need to report the offending agents AT ONCE to the local board.
No excuse for stupidity anywhere in this business. If I sound harsh, you should see what happens with this offense around here. Being hauled before the board is the least of your worries.
The home is not yours until it IS YOURS. Any other access needs to beagreed to in writing or accompanied by the agent.
Just call the police and let them know there are trespassers at the property. Do it with the buyers agent on a 3 way!! That will teach them.
Elizabeth:
Was she inexperienced or simply uninformed? It is hard to believe that anyone who has been selling real estate for any length of time would hand keys to a buyer before a closing. What a can of liability that opens.
I guess it falls on you to train her - or call her broker.
When I got my start in real estate many moons I was told by my broker to never release keys until confirmation was called out by escrow. I know that many agents will release the garage to a buyer, but I have found that it is still a risk.
This can be a quick way to unwind a deal before it closes. Early keys and early possesion is a BIG NO with me.
Yes, people are breaking all kind of rules with short sales and foreclosures. What about the short sale seller who is paying no mortgage and suddenly as you are about to close escrow "decides" that they don't want to move for another month.
Elizabeth,
Not just short sales or REOS. I had it happen with a vacation property where the buyers moved in 4 days before the scheduled closing - their agent had given them the key from the electronic lockbox. She paid to move them out and back in 3 weeks later when it closed after delays. That ate up her commission check!
Sometimes I envy when the rest of the country have lockboxes in their market place. But then there are times like this, I see why if there was lockboxes in Manhattan New York, it can be very hard to control the access of the property, and the sellers will feel very unease.
Oh you hit a nerve...unrelated actually. I am the buyer's agent on a deal and the listing agent is very difficult. We won't get confirmation of title recording until after escrow closes on Weds, I want to go get the keys to hold until we get confirmation and give to buyers once we get it. Listing agent says "no" because she can't trust me not to give them to them early.
So, with a very short timeframe to get things done prior to a tenant moving in, we lose the entire evening (when a handiman could get things done) because the listing agent is a b*tch. We actually have the contract state we get keys at 5pm ON the day of close. Ugh
Hey Tni: I know the type of short sale seller of whom you speak, and I don't work with that type. They generally give themselves away long before the listing paperwork is signed. Although, I did, by mistake, sign a listing with a seller like that last year. We also signed a purchase contract with a buyer and was about to open escrow when I figured out: oh, uh. And I canceled the listing. That type is not worth my time nor yours.
Hi Karen: Why don't you give your buyers their closing gift early? Meet them at the property with your favorite locksmith and change the darn locks at 5 PM?
What an attitude that poor agent has! Sounds like she should be getting a reprimand from someone.......maybe her broker or your real estate board, state board? How about a formal complaint especially after the closing is completed.
Me thinks she needs an attitude adjustment and knocked down a few pegs at the least.
Mindbogglingly reckless behavior. If I were the broker I'd fire her. That is almost a guaranteed lawsuit here in NY.
I would take the lockbox off the property once all the inspections and other contingencies are released. That way, you have control of who enters the house and when. I agree with many of the above. A call to the broker would be a must.