Tenants Being Used as Pinballs in the Seller's Short Sale Machine
This past weekend I took a set of retiree buyers to view homes in Murrieta CA over 50 miles away from my service area. This was due to my client not being treated very well by the referral agent. Even with pre-approval in hand, no appointment had been setup in two weeks, calls were not being returned - that sorta thing.
Anyway, we drove up to the neighborhood of the first home my buyer insisted on seeing and I groaned inside. Because neither the MLS description, MLS photos, nor the agent when I spoke to her the day before indicated to me it was a gated community. I only had the remote key to the front door and not the gate combo. Although the printout said "Go Direct" I should've asked. How could I have forgotten to ask? I pulled over to the side and attempted to call the agent. It went straight to voicemail as in mailbox full or phone turned off. A large SUV pulled into the roundabout driveway so we immediately tailgated followed them in. We drove deep into the complex and ended up parking right beside the same SUV.
As the young lady (age 30-something) got out of her car, I apologized and assured her that we were the "good guys" getting ready to view a home for sale and not stalking her. I also mentioned that we were grateful for her allowing us to come in having come all the way from LA. She wearily laughed and told us she was glad she could help while gathering her groceries. In the back seat I couldn't help but see three little blonde heads all in car seats. We joked with her that she had her hands full literally and figuratively. My buyers even offered to help her, which in hindsight now, could have been deemed awfully suspicious, but she
politely declined.
With printout in hand we went looking for unit #101 and wouldn't ya know it. A super huge Marmaduke looking dog was standing taller than all of us with paws on edge of the wraparound patio that also included a portion of the path to the front door. My Supra remote key useless as this too wasn't mentioned in the MLS private remarks.
The woman that we had parked next to walked towards us with plastic bags of groceries hanging down both her arms, as she ushered her 3 little boys up the walkway. One was clearly special needs who was determined to wander off. She looked at us and asked which unit we were we coming to see because the one behind us was up for sale. I told her it was unit #101 (pointing to the one in front of us). She looked confused then upset. She then told us that we were the second set of people to come to see the house she was renting (the others the day before). But according to the seller and agent the home had already been sold. She and her husband had already gotten a notice to be out by August 31st, but then were told there was no urgency because the "new buyers" weren't in a rush. I asked if she had gotten a call from the listing agent telling her that we were coming, she said she postiviely hadn't. That was unacceptable.
She apologized and asked if we could give her 10 minutes to clean up a little and settle the kids. We apologized and asked her only if she were sure. She said she didn't want us to have wasted a trip. In perfect timing I got a return call from the listing agent. I didn't go into the gate code or Marmaduke issue but told her the tenant had no idea we were coming and is under the impression that the house had already been sold or was in escrow. She assured us that it wasn't because the home had an approved short sale, but had fallen out of escrow and they needed a new buyer ASAP! She told me that the buyer had no idea and the seller was trying to hold onto them as long as he could to continue getting rents until he could get another buyer into escrow. I told her we were placed in a very uncomfortable position but I didn't lay into her too much just in case we were the next set of buyers and needed her full cooperation.
The tenant motioned for us to come in. She tied the "harmless" dog up. We stepped into the home and oh my goodness. One child was climbing up a built-in wall unit, the special needs one was throwing a temper tantrum at the top of the first set of stairs, while the youngest was in the middle of the floor with arms raised crying. This poor overwhelmed lady looked as if she were going to burst into tears! I know I'm going to get a lot of flack from readers for this, but I put my keys and purse down and asked if I could (pointing to the baby), she threw her arms up shaking her head yes as if she couldn't verbally answer the question if she wanted to.
I picked up the crying 2 year old and shhh'd him and patted his back as we all toured the home together with the mom explaining to the buyers about the amenities and how great the area was. The baby was quiet for about 10 minutes which is forever to a mom! The home was completely thrashed. Clothes strewn, toys and boxes everywhere, dried stains on a couple levels of the carpet. There was one level that was completely spotless. I guess that was all she could manage under her chaotic circumstances! My buyers although having a hard time with the mess, because of the layout was still considering an offer. I was advising against it simply because it was tri-level with no ground floor bedroom. Although both quite spry, not advisable for retirees as
I had been diplomatically explaining to them on the drive up.
I called the listing agent afterwards and left her a voicemail and text explaining how bad we felt popping in on the tenant who had 3 kids all under the age of 5 (one special needs) and a dog. How gracious and cooperative she was to allow complete strangers into her home although we were unexpected. In other words that was unacceptable and tenants have a right to be notified especially since it states it on the MLS!
It's an overall bad situation for all parties. Bad for the seller who is trying desperately not to lose another month's rent while trying to get a new buyer in. Bad for the listing agent who is trying to hold onto to the shreds of a listing after a buyer falls out. Bad for the buyers' agents that are unknowingly popping in on very emotional and sometimes hostile situations. But most importantly in this particularly case, very bad for the tenants that have 3 young kids under age 5, are packing to move, have strangers popping in unannounced at all times of the day, a listing agent that is not communicating with them, and a seller pushing them to go, then stay. Through circumstances not of their own, these tenants are being smacked and bounced around like pinballs in a pinball machine at the seller's and agent's whim and convenience until the seller can "score" again.
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Pinball machine public domain wikipedia. Pinball balls photo courtesy of Ian Crowfeather , crying baby photos by nezemnaya, dog photo by Defence Images all for Flickr nd Creative Commons. This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 2.0 Generic License.
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What a traumatic experience for you, your buyers and the poor tenant. Seller and agent should be far more considerate and professional.
Ellie - Yes on counts 1 - 3 and I agree!
short sales are VERY sensitive situations......hard for all parties invovled.......
It just does not seem right that the seller gets to keep collecting rent and not paying the mortgage. And those poor renters in the middle of it all.
That poor Mom not only has the hard job of three little one's but the stress the owner of the property is placing on them is ridiculous.
As for the agent...................... she needs to get with it and do her job by communicating with these folks and get the correct information into the MLS. Good grief.
The seller would have been better off to keep the property vacant. It's not always possible to have a good cooperative tenant. I had a tenant from hell who wouldn't allow potential buyers to see the property --- and so it foreclosed.
As for referring your clients --- did you try to get one of our Active Rainers to help you out? At least you know whom you'll get by the way and what they blog about.
Good luck on the next round.
Ben - yes...yes they are.
Christi - the MLS and tax records didn't state if it was going into foreclosure or not so I can't say for sure the seller wasn't paying the mortgage. But it is awfully insensitive not to take some of the tenant's situation into consideration.
Cameron - Amen brother!
Pacita - I'm not sure if the seller was behind or not for them to consider the option of removing the tenants and not collecting rents, but to treat a cooperating tenant this wayis just cruel and insensitive. As for the referral, I used someone that I had used before, but for whatever reason this time it didn't work out. Thanks!
Investment short sales are best off vacant in my experience. Not only does the tenant have the "opportunity" to make life difficult by not authorizing showings, in the state of Nevada, there is a question as to whether the seller is committing fraud by collecting rents and not remitting them to the lienholder...
In Hawaii, the agent or owner is required to give tenants 48 hours notice prior to showing. I'm surprised that California doesn't required something similar. So inconsiderate of both the owner an agent to do this to anyone.
Andi -- That is appalling on so many levels. Someone dropped the ball here. Does the listing agent know about the tenant and her circumstances and that she needs some advance warning of showings. The LA needs to get coordinated with the seller and tenant on how this property can be shown to maximize the potential of getting it sold.
short sales can be a nightmare. You were so fortunate to get such a nice tenant. I've had situations where they agree to the appointment and then refuse to let you in. Kuddo's to you for letting the agent know how considerate the tenant was to you.
Great article.We have even seen situations where foreclosures are rented out. Some have a happy ended. I showed a short sale like yours and asked the tenants where they were going and offered to help. I was the first agent to ask them that. After many showing, astonishingly, they told me while I was helping them find a new place to live, only 2 other agents offered assistance. May write a post on this. Thanks for sharing. Maybe offer to help the tenant find a new place.
I wish I had your Tenants in my new Short Sale..tenant will NOT allow entry. Offers are "subject to interior inspection." Can't blame her, yet the Sellers are frantic..you got lucky for sure!
Andi, Absolutely shameful. Listing agents need to have better control of the sellers and the status of the homes they list. Absent that … they should NOT be listing them.
I HATE it when landlords don't pay their mortgage and the tenant keeps paying. There should be a law against this.
Three kids under five wow I could not imagine! That is not even taking into account the moving and the dog or one with special needs. Hope she gets all settled into her new place and everything calms down for her!
First, congrats on the feature. I have seen many situations with tenants as pinballs. It is certainly not a good scene.
Great Post Andi! You are absolutely correct! Tenants need and deserve more respect in this market! As tough as this market can be, we all need to remind ourseleves that tenants need respect and consideration! What you did shows the quality Realtor and person you are Andi! You are an inspiration to us all! Thank you!
It's defniitely not fair to the tenants and sounds like a stressful situation for the mom with 3 young children. It sounds like her landlord should have communicated with her about the status of the short sale. I agree with Pacita, comment #6, it's better to keep the property vacant during a short sale.
That really is a sad story, Andi, and especially in this hard rental market. Those poor people are going to be out on the street having to look for a property themselves soon.
If a property is tenant occupied, both owner and agent should communicate clearly with the tenant. Not only is it a huge bother for the occupant to allow showings, but expected to do so without notice and being kept in the dark about the status of the sale is unacceptable.
UGH - Andi, what a story. Just who is that listing agent? Trying to "hold on to the listing" of a short sale when a buyer walks is not fun, but lack of communication with the tenant is unacceptable. Looks like you handled it well, though.
What a nightmare . . . and there are about 5 stories in one with this post! Tenant occupied property, listing agent who can't figure out what to include (accurately), a maxed out mom, and rearing children correctly . . .
Its very sad the that the listing agent didn't provide you all the access information needed and didn't schedule the showing with the tenants.
A great description of what happens when a listing agent forgets how emotionally vulnerable tenants can be. It sounds like you were lucky to have mature clients along for this episode.
I had a 26 year old buyer get into his first home in December. He'd moved 6 times in 2 years, many of those prompted by short sales or foreclosures on the part of the seller. I worked with him for nearly a year, getting his financial house in order so he wouldn't be another future casualty. It's tough, really tough what happens to the tenants. We have to keep them in mind too. You did great.
Nice post.
It's awful what "inconsiderate" treatment some good people suffer at the hands of the callous and self involved!
Have a great second half!
Heartwrenching experience. I have seen this myself here in Southern California. There is a class of investors buying distressed properties, then renting them out until they can re-sell. This is a disturbing trend. Renters must truly beware.
Unfortunately, these circumstances do occur, however, infrequently, yet we must adapt to the consequences regardless, don't we?
There are definitely more victims of the housing collapse than just sellers. I advise my Nashville Tennessee short sale sellers to openly discuss the situation with their tenants so that when the time comes for the tenant to leave there is no chance of the tenant claiming that they did not know.
So sad. Such a stress for everyone involved. I would think the tenants would move.
Been there done that. You handled it very well. Good for you!
Kimberley - yes I was lucky, the sellers moreso yet they are abusing the situation unfortunately.
Kathleen - I thought once I brought it to the listing agents attention she would say something to indicate her regret, no such luck in our conversation and no response to voicemail or text.
Mo - the short sale game has changed everything. It's not like this market hasn't ever happened before, so I'm not sure why there aren't more things put into place to thwart abuse.
Rosalie - it looks like they have a little while longer to be uprooted. They are moving in with parents up in San Luis Obispo. But maybe having her parents there will help because the husband works during the day.
Melissa - Thanks! It's certainly not a scene I wish to be caught smack dab in the middle of.
Mike - thank you so much for saying so!
Pamela - it is definitely the more admirable thing to do rather than take money and keep them in limbo.
Jane - in this case they will be staying with parents for a little while which will be rough for all involved. The parents get two adults, 3 small kids and a large dog for a little while. Hopefully the extra hands will be a help to the mom.
Sylvia -I AGREE!!
Juli - I have a heart for underdogs and in this case the tenants are definitely the underdog!!
Carla - Ha! I should have broken it up into 5 posts SHEESH!
Robbie - it is too bad...a bad headache.
Mitch - yes the clients are very mature and their heart went out to her as well. I'm sure she was on their prayer list that night.
Karen - CONGRATS to your buyer!! That is a lot of moving! Nothing like moving 6 times in 2 years to get them to see the stability in having their own home.
Bruce - callous is a good way to describe it. When speaking to the listing agent during the time the tenant was tidying up it was like talking to a brick wall. All she could see is getting it sold and not the soul behind the potential sold.
Ed - this is very interesting. I know I've seen house sitters lodging in flips but that is entirely something else if they are renting it under the guise that the tenant will be able to make a home there, only to be uprooted when a buyer comes through.
Kimo - yes well in their case they have no choice. :(
Jim - lets hope they all follow your advice for a smoother transition and transaction.
Faye - it appeared they were still going to shoot for the Aug. 31st deadline.
Jan - thank you !
You have to be so much more than just a realtor when you run into these type of listings.
You handled it great.
UN believable! Some people have no conscience. You handled a difficult situation graciously- Bravo!
WOW, great story and hopefully it has a happy ending and a contract!!
When I have those conversations about Realtors paying their dues I will remember this story!
Times are tough. Some landlords are better than others. Many tenants are honest and hard working and get treated very poorly.
What get sme is teh tenant is paying their rent and the landlord is cahsing that rent check but in most cases not using it to pay the mortgage, it is just not right... nIn cases like this i feel very bad for the tenants
I had a couple of those here in Jacksonville Florida, it is so embarrassing as an agent
Yes, I have seen many Tenants rights abused here in Arizona! I will not show a house with a Tenant in it unless
I call the Listing Agent and make sure of what the situation is before I show it! Thanks for sharing the story!
Have a great weekend and congrats on being featured! Marilyn
Normally everyone has something nasty to say about tenants but this is a good exception. They don't know the seller is stringing them along just to get the monthly rent check. Another one is when people in foreclosure pull renters in with ridiculous monthly rents, when the tenant moves in within a couple of months, the sheriff shows up telling them the story. They are out a place to live, security deposit & have additional moving again.
The situation you faced here was reprehensible, and the listing agent is certainly not a "professional" by any stretch of the imagination, however, something else in the comments caught my attention.
It is very possible that the Seller is still paying their mortgage with the rent they are receiving. Not all short sales have mortgages that are in default. Although it is probably the rare exception rather than the norm, some sellers must move for a job or other pressing reasons, and simply cannot sell their property for as much as they still owe on it. A tenant in the home during this process can be the only way the seller can continue making payments while the property is being sold. Again, I think it is just good for us to remember, that not all short sales have a mortgage that is in default.
My word, that poor lady. I would have also picked up the crying child.
I blame the listing agent for this mess. Potentially the referal agent as well.
That poor tenant 3 kids is tough, but there is no excuse for the listing agent.
I would check what the rules are for the mls and see if they are in violation of the listing rules, i.e inaccurate information. I would also send a diplomatically worded email to them and their broker that important information was left out of the listing.
What a bad situation and wrong of the listing agent. You handled it very well considering the circumstances!
there is only one person to blame...the listing agent.
Whats wrong with saying "tenant occupied" "gated community" or "appointment needed"?
Listing agent is L-A-Z-Y and unprofessional...you were too nice.
Eve in Orlando
Congratulations to you, Andi, on you professional and compassionate handling of this trying situation. And shame on the listing agent for not rising to the level of professionalism demanded by the circumstances.
I have worked in that area, having grown up there. There are so many newer agents or "busy" agents that don't do their jobs right. That is awful what the listing agent is doing. That's a lazy agent who doesn't have the full info in theMLS. That's what the MLS is for!!!!
I'm with #55 - The Listing Agent deserved to be chastised for not being professional or efficient. This happens way to ofter...No Gate Code-Oh just follow someone in, they say when you call to ask why. Why couldn't they tell me that when I made the apt., so I could budget the time needed to sit there?
I understand why you held your tongue. That puts you at the top of the professional list! Joy
Congrats on the featured story - very controversial. People put their trust in us and as Realtors we have to be honest. That listing agent has to go...
Thank goodness for good agents like you!
It's smart not to burn your bridges with another agent - but that listing agent is definitely one who needs to learn her job or quit.
Boy this listing agent really has dropped the ball and is making it more difficult for everyone involved. I know it's been a while since you wrote the post, I hope by now you have your clients in escrow on a home they will love. If you ever need an agent in the east bay (oakland etc.) I will treat them right:)
That's truly unbelievable, and I feel incredibly sorry for that poor tenant. The seller and their agent should be more honest and forthright about what is going on.