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The pressure’s on

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Special to The Times

AS property prices stall and homes become harder to sell, buyers and sellers are looking more closely at the performance of their agents and holding them accountable for what they do -- or fail to do.

Even during the market’s dizziest days, some agents may have been missing the mark, as measured by the number of grievances filed with California’s Department of Real Estate. Now, at a time when sales skills matter more than ever, industry observers believe brokers and agents -- particularly the inexperienced -- are in for a rough ride as buyers and sellers become tougher to please and perhaps eager to find someone to blame.

Tom Pool, the department’s assistant commissioner for legislation and public information in Sacramento, is bracing for more complaints. “The hyper-appreciation of the last few years tends to cover up a lot of ills,” he said.

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Complaints fall under two general headings -- legal and ethical -- and can include accusations of inaccurate advertising and poor record-keeping as well as gross negligence or dishonesty in the handling of client trust funds.

In the last five fiscal years, the number of complaints about agents that the department has investigated has risen from 6,987 to 9,103. License denials have gone from 659 to 1,382 per year, revocations from 251 to 394 and suspensions from 72 to 113.

As California property prices steadily climbed in recent years, there was an explosion in the number of licensed real estate agents and brokers. Department figures show the combined numbers stood at 538,598 in July -- a jump of more than 80% from the 297,359 license holders a decade ago. The percentage increase far outpaced that of the state’s population, which grew about 11% during the same period, according to the U.S. Census Bureau.

“About half our members have never seen a down market,” said Colleen Badagliacco, president of the California Assn. of Realtors.

Edward Barrios, an agent with Shorewood Realtors in Manhattan Beach, believes a “gold-rush mentality” accounts for many of the people jumping into the real estate profession in recent years.

They’re beginners

Some lack the necessary skills to keep pace with and interpret changing market needs, he said, and others are getting licenses just to trade their own homes, or do so for family and friends, saving thousands of dollars in commissions. “Every day,” he said, “I see agents who don’t know what they’re doing.”

Although it cannot resolve disputes or unwind transactions, the Real Estate Department can discipline agents and brokers. “We try to get the bad actors out of the business,” Pool said.

In the Southland, according to research supplied by Lona Luckett of the Better Business Bureau’s Colton office, consumers are most concerned about general service issues, selling practices, promised refunds, advertising practices and contracts.

When Linnea Pattillo and her fiancé, Zaur Yevdayev, sat down to write complaints to the Better Business Bureau, the Department of Real Estate, the California Assn. of Realtors and their real estate company, it was hard for them to know where to start. The couple, high-end-furniture designers with a business based in Wilmington, had a laundry list of issues with the agent selling their home in San Pedro.

Among those included in the Better Business Bureau complaint, Pattillo and Yevdayev said that their home was not on the Multiple Listing Service website for the first 17 days of the contract and that for two weeks the sign outside the house carried the name and phone number of the wrong real estate office.

They said that the agent failed to turn up for a scheduled two-day weekend open house and that on another occasion an inexperienced agent arrived instead.

Their agent, Tracy Mandac Plummer, who has about 10 years’ experience, disputes almost all the claims made against her.

She said the basic problem was that the couple wanted too much money for their 1,000-square-foot house and that they “wanted to sell it yesterday.”

Plummer said the MLS posting was delayed because, after pushing back the listing date, the owners only called her about it two days before she was due to leave on a long-planned vacation she had told them about well in advance. The agent said she never missed any open houses. A mistake was made with the sign out front, she said, but that was changed within 24 hours.

After about a month and a switch of agents, the house finally sold for $650,000, about $40,000 less than the original asking price.

The job got tougher

Such differences may seem extreme. But Dick Gaylord, a veteran California broker who takes over next month as president of the National Assn. of Realtors, said it’s a growing challenge for agents to bridge the gap between the divergent expectations of buyers and sellers.

Gaylord, who’s been in the business for 30 years and is currently with Re/Max Real Estate Specialists in Long Beach, said sellers can’t help recalling the higher prices of the recent past, while buyers -- buoyed by media reports of slumping prices and sales -- expect a bargain. When one party is left disappointed, he or she may look for someone to blame.

“It’s certainly becoming harder to reconcile the two,” Gaylord said.

If the relationship between an agent and a buyer or seller starts to sour, the two parties should first try to resolve matters themselves or seek out the agent’s broker, Gaylord suggests. Arbitration may also be an option if such a clause has been included in the contract.

Pattillo and Yevdayev did not research their agent, other than basing their choice on a friend’s recommendation. Referrals are important, said Badagliacco of the California Assn. of Realtors. But she likened selecting an agent to dating. Sellers and buyers should consider a number of agents and take time getting to know one before committing, she said. She also notes that even in boom times, when there are multiple offers on a home, there are likely to be several disgruntled people who miss out.

The agent’s goal is to create win-win situations for buyers and sellers, Badagliacco said, although in today’s slower market, that “mythical sweet spot” might be more difficult to achieve.

And for newer agents, she said, “the learning curve is a little bit steeper.”

Standards haven’t fallen

So, is it just too easy to get a real-estate license? Not according to Gaylord, who said the process has grown more demanding over the last 20 years.

Under a law that went into effect Monday, candidates must successfully complete three college-level, real-estate-related courses before they can apply for a license; previously, it was possible to complete one course and work on the other two after obtaining a license.

Licenses cost $120 for agents and $165 for brokers and last four years. They can be renewed at the same fees after completing 45 hours of Department of Real Estate-approved continuing education courses on ethics, consumer protection, handling of trust funds and other topics.

In addition to researching an agent thoroughly before signing on the dotted line, Thomas Davidoff, assistant professor with the Real Estate Group at UC Berkeley’s Haas School of Business, said buyers and sellers should not be afraid to try negotiating fees.

“Economists love the idea of performance-based contracts,” said Davidoff, himself an economist. He suggests a bonus system measured against such criteria as the final price or sale/purchase timelines. “Incentives are a good idea, especially for sellers.”

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Where consumers can turn for help

Buyers and sellers can get information on handling disputes and other real estate topics through a number of agencies. At the California Department of Real Estate’s site, for example, consumers can download a complaint form or check to see whether an agent’s license is current and whether the agent has faced disciplinary action. Among the resources available to consumers are:

* California Department of Real Estate, www.dre.ca.gov

* National Assn. of Realtors, www.realtor.org

* California Assn. of Realtors, www.car.org

* Better Business Bureau, www.labbb.org


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