Sept. 22, 2010

The Pitfalls of Nepotism in Real Estate Sales

Heels at Naples Pier

Experimenting with Inexperienced Real Estate Agents

Who doesn’t have a friend or family member with a real estate license? I think there is an old joke about driving across the Georgia-Florida state line and having one handed to everyone in the car.

It’s easy enough to get a real estate license, two weeks of class and three hundred bucks and presto, license. Heck, even the guard at one of my favorite communities is a presto licensee. He reminds me every time I drive through that he also happens to be a reel-ah-tur. Funny, every time I drive through that gate, he’s wearing a Smokey the Bear hat and looks like a Wackenhut security guard to me.

Last week I watched a transaction go down in flames by a presto license. It’s hard to watch but watching one go when it could have been prevented is even worse. Sometimes it’s almost predictable. Most of those predictable times its easy to identify because the real estate agent has little to no experience. Even worse is when it’s caused by a so-called friend or even a family member with a presto license.

How a consumer loses focus on their own personal, financial well being to help out a family member, when they need help themselves, is confusing to me. In this troubled market, when some sellers are having so many issues with selling short or foreclosure nipping at their heels the idea that they’d turn to someone with ink still wet on their license is troubling.

Maybe it’s because they’re trying to throw a bone to a family member, maybe they just don’t know how to say no. The end result is that they lose. In the best of times, with an equity sale … maybe, just maybe it’s the time to test drive your brother-in-laws, fresh out of the Cheerios box, real estate license but not when there is the possibility of foreclosure and a massive deficiency judgment in the near future.

Unless that licensee is going to be mentored and monitored by someone with experience why would anyone ever gamble with their finances or volatile legal predicament?

A buyer and I just stepped out of an absolute rodeo with home owners who were losing their home to foreclosure and chose to use an inexperienced member of their family to try to sell short. With several months of no results and constant pleas to turn the matter over to someone else to process the transaction the home was foreclosed upon.

The owners of that troubled real estate let themselves get sucked down by their poor choices and well meaning family member who thought a piece of paper made them something they weren’t; an experienced real estate agent. It was a mistake to the tune of roughly a $150,000 deficiency judgment and years of trashed credit.

Driving a car, just like selling real estate, requires a license and no set amount of experience or training. Simply having a license to drive doesn’t make a good driver any more than having a real estate license makes anyone a good real estate agent.

Unfortunately, everyone usually earns both of those lessons the hard way.

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Real Life in Bonita Springs is a project by Chris Griffith dedicated to writing useful blog posts for consumers about the Bonita Springs, Florida area.  Find out what it is really like to live in Bonita Springs, Florida by reading about our fair city. You’ll get the latest in local real estate information, Bonita Springs real estate market reports and a little bit of humor.  If you have topic ideas, feel free to request a story about the idea, after all, this site is just for you.

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