bribing real estate agents
When I started in real estate in the 1970s, I represented mostly investors looking to buy a rental home. I also cultivated investors by showing regular homeowners how they could tap the equity in their homes to buy investment properties. It was a completely different world of real estate back then. You may find this difficult to believe, but I never asked my investors for their opinion or how they would like to write a purchase offer. I bought all of their properties in my name as assignee using promissory notes. The world of Sacramento investors has changed a bit.
The premise back then was as a real estate broker I could better negotiate and ferret out the good deals for them. After I bought the property, I assigned it to my investors, they put cash into escrow and we closed a week later. I received a commission and they got the property. It was a strange way to do business but it worked for many years.
One of the advantages to this system was I could act very quickly when a new home came on the market. Back then, we didn’t have computers. MLS books were printed once a month with weekly updates. Real estate agents found homes for sale through networking and the daily newspaper. It’s hard for me to even imagine doing business like that now. It seems so dark ages, like etchings on a cave wall, to think about having to stop at my office or a telephone booth if I needed to make a phone call.
Today in Sacramento the market is desperate. Sacramento investors are nearly hysterical. And first-time homebuyers are in tears. The problem is no inventory, and it’s getting worse as we head into the time of year that is generally the slowest — December. Five years ago there were almost 10,000 homes for sale in Sacramento County. I just ran a search in MLS, and we have 1,373 residential homes for sale in Sacramento County. We have 5,162 homes in escrow with accepted purchase offers. But most frightening is over the past 30 days during the month of November we have closed 1,370 homes. That’s only the number of homes that have been reported and many companies lag MLS input by a few days, so that number will increase by the time all is said and done.
We have less than 30 days of inventory. There is nothing to buy and the demand is extremely high. To say it’s a seller’s market is like saying we have a little rain here in Sacramento right now. We have a torrential storm.
Investors have figured out what they need to do is target the top producers. They are calling the biggest listing real estate agents in Sacramento and begging for first chance at writing an offer. I rank up near the top so they are calling this Sacramento real estate agent. One of them, and I won’t tell you who it is, called yesterday. They offered to kick back 66% of the commission to me if I would give them an edge in negotiations and make suggestions as to how they could beat out their competition.
I don’t think they were prepared for my response. That’s because this approach must work with other real estate agents or they wouldn’t be doing it. I said: “You know, it sort of sounds like you guys are asking me to compromise my fiduciary and give you a leg up in exchange for additional compensation. To grant favors. To ensure you win the purchase offer. I know you probably don’t mean it that way, but that’s exactly how it sounds.”
Their response:“I take it you’re not interested.”
If you’re looking for a Sacramento real estate agent to sell your home, give Elizabeth Weintraub a jingle at 916.233.6759. I answer my phone.