On the Shady Side of the Road

Sigh…if there is one thing to be said about the real estate industry it is that you are always learning new things.  There is no end to the little nooks and crannies and intricacies.

The lesson learned today is not so new or surprising, however once learned is never to be forgotten.  What is it?  If there is something shady about the person on the other side of a transaction be it buyer, seller, or agent, run the other way!

In the most recent case, my buyers are purchasing a home from a seller/agent/broker that bought a home at auction. 

Agents that do 1 transaction every 10 years so they represent themselves are an interesting breed.  You would think, “hey, I’m saving myself some money, it makes sense!”  Yes, except if you don’t know what you are doing, maybe you are not.

Here’s how it all went: he bought a home at auction, it was a multi-unit but he put it on the market as a single family home until someone reported it as a violation.  He accepted our offer even though he had “way higher offers”, yeah sure.  The property had an encroachment.  No permits as a multi-unit.  No security deposit for the tenant in the back.  No rental agreement for the tenant in the back.

This transaction was a nightmare every step of the way the more it unfolded.  Each day was like turning the page of a horror novel.  We knew when there were issues with the input of the property as a single family home instead of a multi-unit that the agent/seller/broker was not on the up and up.  We knew when he took our offer even though people were throwing money at him that he was being dishonest.  But we chose to continue because they loved the house and it was their very first transaction and first piece of San Diego real estate.

Now, after 3 months of escrow and with tenants that have been inherited without security deposits, without rental agreements, with encroachements, etc etc.  We realize that we should have taken the first sign of shady behavior and realized that there was more to come.

The fortunate thing is that the buyers love the house.  The lesson learned: when you are dealing with unethical people, stay away.