🚫 Avoid These Risks: The Consequences of Going Agent-Free! 🏠

What's up, you guys? Welcome back to the podcast, The New and Experienced Investor Podcast, the first and only real estate podcast that brings real estate investors from all walks of life together. I'm one of your hosts. I'm Alex Barnett. I'm the new guy.

And I'm Joe Homs, and that makes me the experienced guy.

That's right. Yeah, we've got some experiences to talk about today.

Experiences, yes.

Yeah, we're bringing real-life experience in today's topic.

Yes.

And I love when that happens because then it sparks something that's happening currently. People can use the information to make better choices.

Well, I don't know about better choices.

No, they say no one's a car.

We're gonna bring you up to date on some topics that, uh, occurring out there. The biggest one is the NAR lawsuit.

Yep.

And I'm not going to talk anything about the NAR lawsuit itself because, yeah, they still have not settled it. The, you know, the DOJ just entered the game the other day, literally the other day, and now everything's on pause again.

Yeah, once they get involved.

All the contracts that, uh, the California Association of Realtors were going to send out, they've been paused because they may change everything up.

Yeah.

And that's what I've been telling my Pelago agents is, you know, I'll update you when they update me because they keep changing their mind every 5 minutes.

Oh yeah.

You know, and there's actually a group that is looking to form to sue NAR.

Perfect.

Other agents want to sue NAR for not standing up for their rights. I don't I don't have an opinion either way other than I think NAR had no choice. It was, you know, stop the bleeding or declare bankruptcy. So I don't know what else they could have done.

They're making it up as they go along and, you know, making decisions.

Yeah, I mean, you know, honestly, why the lawsuit got that far is just incredibly crazy. And in this environment, it's like How does a jury say that, you know, this lawsuit's worth billions of dollars? It just doesn't— that just doesn't make sense to me either.

They just don't know.

Do they think money grows on trees? Or where does that money come from to pay these attorneys? Because, you know, the attorneys are the ones that are going to end up—

Oh yeah.

With the majority of the money.

Yeah.

Nobody else.

There's been a few, like, billion-dollar payouts from lawsuits, and you're like, The, the, the people don't have that money. It's like made up.

Yeah.

But so anywho, anyway, we'll get all into that. But first, let's talk about our meetup.

We do have a meetup.

Yep.

And it's next month on the 22nd. 22nd, Hangar 24, uh, with a very, very, very special guest speaker.

Yes.

Yes. He's going to teach you how to flip a property in less than an hour.

Yeah.

Is that clickbaity enough?

That's good. Yep.

Okay. I'll be there to teach you how to fix and flip a property in less than an hour.

Yeah.

It should be a lot of fun.

That's great. Because you could, you could, you know, say you could kind of play it both ways. Like you can flip a house in an hour.

Yes.

Or you can learn how to flip a house in an hour.

Yeah.

Ah.

Yeah. The learning part.

Okay.

Not the flipping part.

All right.

I don't even think a professional could do that.

Could you do it in 24 hours if you didn't sleep?

I think they had some HGTV shows that do that.

Yeah.

Yeah. You work all through the night.

I mean, they send the homeowners— I don't remember what the name of the show.

Oh, yeah.

They sent them away, you know, for a day or two, probably a day. They came back and it was all done.

Yeah. Was it Move That Bus?

You have to— was it Move That Bus?

What's that one?

No, Move That Bus was like at least a week, I believe.

Yeah.

Who was it?

It was long.

Oh, that's right. And they like would turn it into like a race car themed house or something.

Yeah, that was just like the kids' rooms.

Oh, okay.

That's what I always focus on.

Yeah, apparently.

It was like there was like slides everywhere.

It's so cool.

Okay, that was a good show. You cried every time.

Yeah, every time.

Every time.

She cries very easily.

Yeah, I do.

We were, we were out somewhere and she heard the one Beyoncé song that she likes.

Shut up.

She was crying. You sure it wasn't Taylor?

No, she likes a lot of Taylor, but there's like a few—

Like, there's a lot of key changes, okay? And it just like, it gets to me.

Yeah, it hit her. A lot of key changes.

You have to be in the industry to know what that means.

Yeah, yeah.

I have no idea what she just said.

Yeah, that's lingo. It's deep lingo.

Yeah, if it's, it's like if I talk, you know, Really high-level real estate information lingo.

It's all acronyms.

It'll go right above.

That's how I am. You guys are like, I'm sending out the OCB, the OCMB, and we got to get the CO2 signed and the listen. I'm like, what am I signing? Just tell me where.

Yeah, exactly.

I should learn that stuff though.

Is it okay if I sign it? Yeah, just sign it.

Just sign away. Just sign up. We'll make the rest of it happen. Don't worry.

I'm a trusted, licensed person.

Yeah, just person in general.

Just, yeah, person. Just take my word for it.

Yep.

Okay. Yeah, that's good. I've got insurance and experience. Just take— just sign it.

Okay, just sign it.

Get over it. Yeah, don't read it.

Yeah, that's perfect.

If you're an engineer, you read every word. Oh, I know.

Or an attorney.

And like 3 days later, they sign it. Uh, Joe, we just signed it. Yeah, they accepted an offer. Oh yeah, like an hour after I told you to sign it. So you weren't even in the game after that hour.

Yeah, we just got through it. We all signed it. Yeah, it's not available anymore. Oh, that's good. That is good.

But hopefully next time they don't have to read it again because they already read it the first time.

Yeah.

It's all the same stuff.

This time the process will be a lot quicker.

There you go. That's how you learn.

That's fine. Perfect.

But, um, yeah, so let's, uh, let's go ahead and jump on into it. Today we're talking about not things that can happen not working with a real estate agent.

That's one of the topics that— and I'm going to read some stuff off my phone here, so I apologize for reading, uh, but Let's talk about because we started out with NAR. So let's talk about what the public is thinking right now, even before this goes into effect. So I am writing. I did write an offer for a property multifamily, and I was writing two offers. And so I called the agent on one offer because he was only offering one percent. And I said, uh, agent, um, I've got a cash offer coming your way, full price. Okay, full price. The only contingency is the home inspection. Um, are you willing to give me 2% instead of 1%?

Seems fair.

I thought it was fair. So he, he calls me back and says, well, I've had this conversation with the seller and NAR came up and they're only offering you 1%. And I said, okay, um, yeah, what, what happens if it goes up to 2%? Well, then I would be making less than you. Okay, which told me that he has a 3% listing. He's keeping 2 and offering 1. So now the question is, who's more important, I guess? Or at least that's the way I looked at it. So he obviously is telling me that he's more important. He deserves 2 and I only deserve 1.

Hmm.

So we kind of left it there. And by the way, I did not send the offer. I sent a form basically asking him to revise the offer before he sees the offer. So if you're an agent, Don't don't be sending him the offer because he did ask me. He said, "Well, why don't you send the offer over and we'll take a look at it? And if it's like you say, you know, we'll negotiate." No, uh uh. Let's let's negotiate now before you see it. So then I wake up this morning and long and behold, in my email is the form signed. Okay, and he said he would deal with the seller on his end.

Okay, there you go.

Yeah, hello. So, um, I sent the offer over and now I'm just waiting at this point, see what's, what's going on. And multifamily's, uh, way different than single family in that obviously there's renters living in these places. So they want you to send the offer, then they want to negotiate it and then approve it. And then at that point in time, you get to come over and look inside.

Yeah.

Okay, so it's like, okay, we've done all this. You go over there, you look inside, you don't like it, you walk away. It's like, it's, it's very strange, right? You know?

Yeah, it's more formalities, but—

But it is. Um, yeah, the moral to that story is you're going to start, as an agent, you're going to start seeing a lot more of this. Um, and, and I told him, I said, you know, this is a precursor to The NAR lawsuit, when all the commissions for buyer's agents disappear off the MLS, what do you have to do? You have to call the listing agent. Hey, are you guys offering any commission? No, you're not? Okay, we're moving on.

Yeah. Okay.

So if you're a seller out there and you do not want to offer commission, that's your right. And it always has been your right. But you're probably not going to get a lot of showings or even a sale out of it.

Okay, not a good move right now.

Not a good move. Which kind of leads me into the next topic of discussion, double-ending deals. So, you know, in, in the case of offering 1%, I don't know what the listing contract says because I'm not privy to that, but does it also say in there that if you get a buyer for this property, you already have 2%. If you get a buyer, do you get the other extra 1% or are you just going to represent me for the 2% that we negotiated?

Sticky situation.

Yeah. I don't personally like double-ending transactions because, you know, you're a fiduciary in this transaction, which means you're supposed to be fighting for one side. And if you're a listing agent, you're supposed to be fighting for the listing agent, the seller side.

Yeah.

Okay. So when you represent the buyer, like, where does your loyalty lie? You know, you could be the honest, most honest person in the world. But stuff comes up during a transaction, you know, and then it's like, okay, so am I going to be on the seller side on this issue or the buyer side? Because legally you have responsibility to both.

Mm-hmm.

But which one do you have more responsibility to if that's the case? A lot of agencies, real estate agencies, do not let their agents do double-end deals because they just cause problems.

Makes sense.

But that may be the path where we're headed because if, you know, the seller's not offering a buyer's agent commission, and if a buyer actually wants the place, he's going to go directly to the listing agent. So the listing agent has to make a decision. Do you want to work for, you know, the 2%? Or, you know, are they even going to let you have the extra 1%?

Mm-hmm.

Who knows? There's, there's a lot of things.

I remember, um, my first deal was a pocket listing and lady represented both of us. I was really impressed with how she did it because she would like give me hints of where I needed to be at but would keep their side hidden still. She's very Political, diplomatic, whatever you wanna say.

Mm-hmm.

I think you have to have experience to be able to pull that off correctly.

And, and a, and, you know, people, buyers go directly to the listing agent because they get that, you know, secret information.

Mm-hmm.

Like, hey Alex, I've got 10 offers and you need to be here.

Mm-hmm.

Okay. If you want this property.

Right.

And I'll represent you.

Yeah.

If you're here. So, I mean, there's nothing wrong with that. I mean, you're there to get the highest price. You're telling the buyer that this is where you need to be at.

Yeah.

By the way, I'll represent you.

Yeah.

You know, ethically, no. I mean, that's fine. You know, the seller's getting the highest.

Yeah.

You know, now if they had told you, yeah, we've got 10 offers, I'll get you in with this bottom offer here if I represent you, that's a different story.

Right.

Yeah, exactly, exactly. Which I'm sure, yeah, people do because then they double dip.

Yeah, I hope they don't do that, but you know, we're—

Someone's done it.

We're all humans and yeah, sometimes we're all not ethical.

Yeah, sometimes you gotta, you know, buy a new Tesla, so you do what you do. Do what you gotta do. No, no one's doing it right here.

Okay, so let's move into the next area.

Moral of the story is don't put the douche in fiduciary, which is which is we're moving on. All right.

Which is every every every agent's you know dream call. You know it's like Joe. Oh, Joe, I wanted to let you know I bought a place. I'm in escrow and I'm having some trouble and I want your advice.

Hmm.

Well, first of all, you're buying this property without me. Second of all, I can't give you advice. You have an agent.

But we're friends.

But, you know, he's— He's the listing agent. He's double-ending the transaction.

Hmm.

But now we're having problems, you know. So one of my agents called and says, here's the latest deal I called you about yesterday. The agent just wrote my friend. Okay. And yeah, and as an agent, you have to be careful when you're giving advice on something like this because ethically you're not supposed to do that. But again, you know, this is, this is a friend. So, you know, I'll leave it up to you, agent, to decide what to do. They're apparently not a good friend because they went to somebody else.

Yeah, that's the agent's like plight is—

And informed her that the seller had changed his mind and does not want to sell the property. Well, it had cost her $30,000 in performing due diligence and loan fees alone.

Geez.

The dual agent is advising that she just cancel escrow and walk away.

What?

Yeah, where's the ethics there?

Good God.

Who, who is this person protecting? Yeah, you know, that's really bad.

That's really bad.

He states the buyer does not want to deal with eviction or evicting The non-performing tenant and has changed his mind about giving the buyer $70,000 credit for repairs. Okay, now in a real estate transaction, everything should be in writing, and it sounds like it was, but now he's changing his mind, which he can't do.

They always try to do that.

But he's trying.

They always try to do that.

Mind you, this is all last minute after she signed escrow papers and loan docs. Imagine that.

Oh my gosh.

Yeah. She's ready to close. Although she can do that, what is the most clever way of doing this in order to collect a civil lawsuit? Okay. So, they're thinking, you know, let's just cancel this thing and go after them civilly.

There you go.

You know, that's not my preference.

Oh, okay. Do you sue them for performing?

I hold their feet to the fire and I would not close anything. I'd get the lawsuit going.

Right.

You know, and I'd cloud the title on the property, put down there that, you know, I have a lawsuit going against this person so that they can't run out and sell it to somebody else, which is— I don't know what's going on. Give a notice to close escrow or just a cancellation notice since all of this information is coming via email? From the dual agent and outside of escrow, I think she should give a notice to close escrow, which I agree with. Yeah, demand that they close escrow. I think the seller and the dual agents are colliding against the buyer— colluding, sorry. It says colliding, but it meant colluding. Mind you now, escrow will charge her all kinds of fees, plus the loan guy is entitled to his commission. What is the best way to proceed for the buyer to recoup her costs in a civil suit?

Oh, gonna need a dossier on this one.

Yeah, um, like I said, I, I, I do the demand to close escrow. The seller has no right at that point to stop the escrow. Um, demand to close escrow, and if escrow's not close, then hire an attorney to sue the seller for performance, which I have done before.

Mm-hmm.

And I've been successful in doing it.

Yeah.

It's, it's pretty easy as a buyer to get out of a transaction because you have all these contingencies to remove before you lose your initial deposit. It is way more difficult for a seller. Once a seller signs that contract that they're selling the property to you, I mean, let's, let's look at this scenario. I'm selling— I'm a seller. I'm selling you the property for $1 million. And you come back to me and say, I did a home inspection and we found $200,000 worth of work that needs to be done. I want you to subtract that from the $1 million. And I say no, which is my right.

Mm-hmm.

I can say no. Okay, you say, okay, forget that, I still want to buy the property. Uh, now I cannot say I'm not going to sell it to you, right?

Right.

Because now we've just agreed that you're not gonna take $200,000 from me, you're going to continue on the transaction for $1 million. But the seller can't just arbitrarily say, yeah, I'm not selling it to you anymore, which happens When, let's say, the seller or the listing agent or both sells it to somebody and 2 or 3 days later they get a better offer.

Right.

And so they're going to go, well, yeah, we don't, we don't want to, you know, do anything here and whatever. We'll see what happens. And that's up to you. You can. And if they send over a, you know, request for repairs that's too high, you can say no.

Yeah.

But then it's on the buyer to say, okay, well, Yeah, we'll go ahead and do it. The heck with, you know, the heck with the $200,000. We'll just eat it. And, you know, we want the house that much.

Yeah.

So the seller can't back out, even, even if they have another offer that's a lot higher.

So you accepted our offer?

Yeah.

You didn't have to accept. He had all the offers in, right?

Correct.

Okay.

And I think it's to your point of this dual agency, and he's just like, "Ah, just walk away. It's better for everybody if you just lose your thirty grand." Yeah, yeah.

Right?

And and you know, speaking of losing thirty grand, so we're we are personally in a transaction that we've owned this property I think over a year now.

I'm gonna move in.

Yeah, yeah. It's a flip. It's a flip.

I'm just gonna live in San Jacinto.

We started with tenant difficulties and took us a while to evict. the tenant. They finally were evicted by the sheriff's department, which was very strange in itself.

You know, that took about 9 months. Yeah, just the eviction.

Yeah. And then the rehab. And then we sold it, put it into escrow, and the buyer could not perform.

60-day escrow, no performance.

60-day escrow, couldn't perform, and they wanted more time. And so, um, you know, this is why I always tell people, you know, work with your own agent, and your own agent should hopefully be experienced enough. And obviously we are, because we said, oh yeah, we'll give you more time, no problem. Remove all the contingencies, and now you've lost your deposit, and we want you to send that to us.

Mm-hmm.

We want you to authorize escrow to send that money to us. We'll give you another week because Mr. Lender is saying, I can do it. I can do it in another week. I can do it. I'm like this close. I can do it. So they released the funds. That was like $6,000 that they released to us. A week went by and no. So we kicked them out of escrow.

Mm-hmm.

Yeah.

Yeah.

Put it back on the market and got another buyer. Here we are, buyer number 2 on this property. We're in the same situation. Okay, same situation. They just released their initial deposit for an extension of time, $10,000, which is fine with me. I mean, the last 2 months we've gotten $16,000. It's almost like renting the place.

Mm-hmm.

It's actually a little bit better with the rents out there. It's, it's fine. Okay. It's like, you know, I'm not crying.

But, but the second agent is at least fighting to keep his client in escrow with us because we did send a demand to close because of all the delays with the lender. And then he proposed a per diem to keep the transaction open until the loan is finished processing.

Okay. Which is where I was getting to. Now here, here we are, number 3. And, uh, he's on a per diem, which, if you don't know what that is, it's basically we're charging him $200 a day for a certain period of time, and he is to put the money into escrow. And if they don't perform in this 2-week period, because the lender keeps saying it's ready, it's ready to come out, I mean, the loan docs are just there, just, you know, it's like— Do you really believe this lender? You know, it's like, what are we working on, 45 days with this one?

I have a feeling that they started the loan process later than they let on. So I think we're approaching like 30 days with the loan complications.

Yeah, but we're in escrow 45.

Yes.

Yeah, correct. And so they want another 10 days, but it's going to cost them. Nothing's free. It shouldn't be free. And you should be an intelligent professional, uh, you know, full-time real estate agent to know how to navigate through these problems. Because I'm telling you, there's not one transaction in real estate that doesn't have any issues. They all have issues, you know. It could be minor issues or it could be a major issue like this.

Mm-hmm.

And it was kind of funny because the first buyer called escrow a week after we had received her funds and said, hey, where's Where's my money? And escrow said, well, you authorized us to release the money to the seller.

Got it notarized.

Oh yeah. I don't know if I understood that. And I'm thinking like, did you not understand that? Or did the agent not explain it to you?

That's probably—

You know, or did the agent just say, sign here. I'm a professional.

Yep.

You know, just listen to me. We'll move forward. We'll get this done.

Uh, no, he's one of those guys for sure.

You didn't like him, did you?

No, we weren't fans.

Not a fan.

And then this guy, you know, we explained all that up front to him and said, you know, hey, this is what happened last time. Yeah, are you able to perform? Oh, absolutely. Yeah, Alex, Lauren, I can perform, not a problem. My client's well qualified, ready to go. And here we are.

Yeah, here we are again.

Well, and then one thing, so here's one pet peeve I've gotten from these guys is whenever they're like delivering a message or it takes them a couple days later, they preface their response with something like— he'll be like, I broke my foot, so like I haven't been like able to get back to you. Or the, the loan guy was like, I was in the hospital for 2 days.

I'm like Well, the actual, the actual lender, I'm only conversing with his assistant at this point because every time I try to call him, yeah, he's either out of the country or in the hospital. What?

Why do we need to know that? Like, leave that part out. Yeah, you just say the thing.

Yeah, well, you, you would hope that they would be honest with you.

No, no, God no. That's the like, uh, my, my tire's flat on the way, I'm late because of the traffic, and Yeah, that's that move. But it makes you look like a dumbass, makes you look like more of a dumb-dumb.

Just reply with the answer, you know? Yeah, we don't need the backstory, basically, is what—

Yeah, it's just really weird.

Like, get these texts like, well, they think if they give you the backstory that, you know— Oh, that's okay. Yeah, I feel bad. Yeah, you know, it's like, uh, no, no, this is a business transaction. Let's keep it business, you know? It's like, I don't care where you went on vacation. I mean, I've had agents tell me that. It's just, Joe, like, I'm in Vegas right now and I can't, uh, really deal with this.

Yeah.

I'm glad you're having fun. We're waiting for you.

Yeah. Okay. I guess we'll have to wait. And then, you know, you call agents which never answer their phone. Okay. That's another pet peeve, but anyway, they never answer their phone. Hi, this is, uh, whatever agent. I work from 9 to 5. If you're calling me after 5, just leave a message and I will call you back tomorrow. Really? You must not be a successful agent. Yeah, so I don't know any agent that doesn't work 24/7. I know, including weekends, right? Like, when business is calling, you better be answering because if not, it's going to go to somebody else.

Exactly.

Like, bizarre. Very weird. Just bizarre.

It's very weird. And he mentioned on this— just staying on this transaction— he said, uh, the agent was like, we went down to the bank and met with the owner of the bank and made sure— personally— and made sure that he approved it, and we still have nothing.

I was like, do you know what bank it was? No, he's lying. He's lying. Now, you know, 40 years ago, I used to go to a local bank and I was able to speak with, you know, the president of the bank who was there. And I actually got some transactions done that way. But try going into Chase or Bank of America, Wells Fargo.

Oh no.

You know, they're going to look at you and go, what the hell are you talking about? You know, we get paid by the hour. We're given this script and we cannot deviate from this script. You, you want to like do this? Oh no, we can't do that. No, no, it's not that hard. You can do this. No, I'm sorry, we cannot do that.

Right.

We have a script and we have to follow the script. If not, they fire us because we're not following the script.

Yeah.

You know, so we can't be nice to you. It's That kind of reminds me of— I'm getting a Cybertruck.

Yeah.

And they emailed me the other day and the finance department, because I'm trading in my X, and they said, okay, well, your wife is the registered owner of the X. I go, yeah, I've been married to her for 45 years, but what's the question? Well, she has to be here to sign off.

Nice.

On this thing. Okay. I said, okay, I was planning on bringing her anyways, but I understand. Okay, I understand. So then I emailed them back the next day and I go, hey, wouldn't it be a really great idea if you could put unlimited charging on my Cybertruck? Because the vehicle I'm trading in has the unlimited charging.

Yeah.

Okay, I would think that would be fair because you were offering it before, and I won't tell anybody. Okay, it's like I threw that in. It's like, I really, I won't tell anybody. Okay, he emails me back the next day. He was a nice guy. He emails me back the next day. Well, currently that program is not available for the Cybertruck. Yeah, so I'm keeping my fingers crossed that he's just gonna do it for me.

Yeah, that would be cool.

But I don't think so, because again, here's the script. They can't go out of the script. They have to keep with the script.

Yeah, exactly. Yeah, the computer wouldn't let him.

No, true, true. Nowadays, yeah, yeah, if we didn't have computers, they'd go, I like you. Yeah, here we go, you know, recharging. Just, yeah, free charging, you know. What are they gonna do, fire me?

Yeah, no, no, they'd never find out.

No, they'd never find out. And I wouldn't tell anybody. Like right now, I'm not telling anybody that I'm going to get it. If I get it, I'm not telling you.

Yeah, you'll never find out.

Yeah, I'm not going to get it.

You may have to like ask Elon personally.

Yeah, you might be able to tweet him.

Send him an email. You can tweet him.

Sometimes they're just randos.

He invited me to go to Texas.

See the whole—

To see the whole thing.

How the sausage gets made.

But I was really busy that time, so I had to turn him down.

Dang.

Yeah, sorry. I shouldn't have, but I did.

Maybe the next one, whenever the next thing is. Space launch.

Yeah. Oh, and that kind of reminds me, because I wasn't telling you the truth. That kind of reminds me when you're talking to agents and they're like— this one agent I was talking to yesterday says, can you do this, this, and this? And I go, You know, I pretty much do that. I've got lots of experience. How much experience do you have? Oh, I have 10 years experience. And I go, oh, that's awesome. That's great. And I looked it up. He's got 5.

Ooh.

It's like, hello, agents. It's easy to look up how experienced you are, at least how long you've had your license. You know, it's not like the old days. It's all public record. It's there. Yeah, you know, so yeah, don't be telling non-truths.

Yeah, just when you get caught in a lie, whatever, just, you know.

Yeah, well, so what advice would you give to a retail seller or buyer looking for an agent? How do they vet an agent? Because we're kind of trash-talking some buyer's agents right now, and our theme is the risk of going agent-free. So how do you find a good agent that's gonna Represent you in the highest and best way.

How come she has all the good questions? You're supposed to be questioning all that.

Were we trash talking?

We were.

Sit down here next time. Oh man, you can press the button.

I know that's how it's been my whole life.

Great question. I have people ask me that all the time. First of all, it's an interview. It is literally, okay, Alex, how long have you had your license?

43 years. And then you look it up. I don't think people look it up.

Okay, that's really funny. You and Chad must be like connected because he just commented that he's the top 1% agent for the last 45 years.

Yeah, Chad gets it. This is what we tell people on the phone every day.

Okay, Alex, that's awesome. I, I— she's a very experienced person. Okay, so let's figure out how experienced you are.

Do you own I have a timeshare in Cancun.

Okay. So the timeshare in Cancun, that, that obviously that gives you a lot of experience to give me because I'm thinking about buying a home. So you, but you've never bought a home? No, just the timeshare.

Just the timeshare.

Yes. And they talked you into it.

Yes.

You probably paid top dollar for it.

Now looking back, yeah, it was top dollar.

So let me ask you another question, 'cause, uh, this property I'm buying is, is really an investment property for me. I'm just I'm just going to rent it out. Do you have any investment properties?

I have a BiggerPockets membership, so I know all about investing. Yeah, I've been to a conference before. I think I've— I think I can figure it out.

So, um, yeah, so you, you can— I mean, I know that you're licensed, you know, the state of California says you're licensed, you can do anything.

Yes.

Okay, but you know, this is the vetting process of any agent, you know, whether they're going to list your property or they're going to represent you as a buyer.

Yeah.

Is finding out what their actual experience is.

Totally.

Because you want to work with somebody that's a professional, that knows what they're doing, that can give you advice. Okay.

And it's like problem solving and coming up with solutions. That's the biggest thing. When we have an agent that is like, Can come up with solutions where we're like, hey, we need this done. They get it done. They come back with this thing. We work with them and then it's a smooth transaction. When that happens, it's unbelievable.

Yeah. So Alex, um, I am an investor. I'm gonna flip this property and somebody told me something about title insurance and there's something else that I should get. Do you know what that is?

A bingzer.

No.

Close.

A bingzer?

Yeah.

A binder policy.

A binder.

I know.

Yeah, he's doing this on purpose.

Playing a shtick. I'm doing a shtick.

And that's good because, you know, getting a binder, and the agent should know about it if they're experienced, is going to save you thousands of dollars at the end of the day when you go to sell this property. But I can tell you that probably 90% of the agents out there Just have no clue.

Yeah. I mean, if you don't have the experience, how would you know?

Yeah.

So that's the part of it. So I think you're totally right.

Yeah. Um, and, and, you know, please understand I'm not knocking real estate agents, especially the young real estate agents, but we have a young real estate agent, uh, here with us and it's good because she's learning kind of on the job.

Yeah, it's been an experience for sure.

You had said something the other day, and I forgot why you said it, but you said, I'll never make that mistake again. But I don't remember what it was.

Homeowners insurance.

Oh, was that it?

Yes.

That's right. We ended up closing on a property cash but did not have homeowners insurance.

On 2 properties.

Did you feel bad?

Me?

Yeah.

Yeah. Well, the transaction that you're talking about, I was in the hot seat because we had lined everything up with the sellers. We were buying their home cash.

Yeah.

And they needed a majority of the funds for, you know, like a daisy chain transaction to put down and close on their new home. Well, we were right at the finish line and we realized we forgot insurance and everything got put on hold. And that was putting their transaction at risk. So it was stressful, but we came up with a solution, pre-release of funds. And then we did end up closing on time regardless of the insurance issue. But just having that option for them and, you know, making sure everything ran smoothly was a good solution.

But you'll never—

I'll never forget it. Yeah, I, I was dealing with a very pissed-off ex-wife.

Well, I was just going to say, um, did anybody on this side yell at you or anything?

No.

No. Thank you. I just told you. Yeah.

And then we realized we didn't have—

You got a repeat from the other side.

Oh, yeah. No, it was making sure— it was more about making sure that, you know, because that's also Alex and Chad's company's reputation at risk. So I just wanted to make sure.

That'd have been okay.

Yeah, I know. We would have just dissolved, start a new one.

We're fine. Okay, great.

Enron situation. She read all the papers. You know, like I was saying earlier, there's always things that come up during a transaction, and the type of person that you are, uh, to able to figure out how to, you know, get this thing done. Yeah, you know, pre-releasing the funds, that was a great idea. You know, release those funds so that they can close on their side and then give us a couple of more days to get the insurance, which I have a great insurance person, by the way. If anybody wants a referral to a great insurance person, let me know. It took 2 days because she was going with one policy and it takes them 2 days to decide. But we ended up not going with that company. We went with another company that she could actually get right away. It ended up costing us a little bit more, but— You know, we were kind of between a rock and a hard place and had to do that. So time was of the essence.

Yeah. And the pre-release of funds we did also, it was just for the exact amount they needed to close. And we sent it over to their escrow for their property. And then the rest remained in our escrow, which was their, you know, their cash out pretty much until we closed.

You mean you didn't give them a check and they called you from Hawaii or something?

No, no way.

Oh, okay. Yeah. So yeah, that was a smart idea to do that as well. Yeah, I mean, don't hand them a check because you know that they're not going to use it.

I know what I'd do with it.

Yeah. She's in Hawaii already.

Oh yeah, she's gone.

Yeah, yeah, she's out of here.

Yeah, the whole time they're just looking at her like, when are we getting our money?

You promised. That must have been stressful. Thank God I wasn't on the other end of that conversation. But yeah, I had been sleeping That night, 2 nights before we were to close, and I like literally wake up in the middle of the night going, oh shit, we forgot to get insurance.

Yeah. And then we realized—

I need to call Lauren.

Yeah.

And then we realized we didn't have it on another property that we had already finished renovating.

Yeah.

So we had already held it for like 4 weeks without insurance.

Oops.

Never forget again.

Yeah. Just a checklist, simple checklist of things. That's it.

Problem solved.

That's it? Simple?

Simple checklist.

Wow. He's very involved in the transactions.

Well, I know. Yeah, I can tell.

That's how I picture it, at least.

He gets so excited when he gets a deal. It's like, Joe, Joe, we got a deal. We can do this deal. What did Lauren say?

Yeah.

Yeah, simple checklist. Have Lauren talk to me, okay?

Have Lauren look at it.

Yeah, you're, you're too excited.

I love this stuff.

Yeah.

What are the biggest risks for buyers with this new, you know, there's going to be a lot of them out there wanting to self-represent. It kind of reminds me of like, you never represent yourself in court. You get, you get representation. What are like the top 3 biggest rec— uh, risks for them going into a transaction without an agent?

Uh, I mean, the biggest risk is somebody's going to take advantage of them. You know, if it's a dual agency, like I said, um, you know, the listing agent really has the most fiduciary responsibility to the seller. So if something comes up, you know, are they going to, you know, inform the buyer? Are they going to pass along the buyer's concerns? Um, You know, there's lots of risks out there. You can self-represent yourself. But like you said, it's, you know, not a good thing, especially if like you're in court and, you know, it's a murder trial or something. And, you know, not a good thing. Yeah, we're not— So, the rules are supposed to be where there is no buyer that's unrepresented anymore. Um, they're going to have contracts that basically say, sign here if you want me to represent you, whether it's for the showing that you're there, like an open house or something.

Uh-huh.

Uh, or if it's a long-term relationship, every buyer should sign a form for whatever period of time that they want. To have that representation. And hopefully it's not the same person that's selling the house.

Yeah.

Because that, yeah, that kind of doesn't work either. And if you're a seller, same thing. It's like, yeah, you better have a conversation with the listing agent to find out where his loyalties lie. And if they don't lie with you, then yeah, that's a problem.

Yeah. And, and it's like, if you've only— okay, most people are just gonna buy one house in their life or 2 maybe. So if you haven't done that many transactions and you think you're just gonna go in there unrepresented, you're gonna make a mistake somewhere along the way.

Yeah. And it's, and it's not maybe that you're gonna make a mistake, it's that the agent's not gonna point it out.

Right. Yeah, exactly.

Okay. And actually, I was reading a listing on the MLS today, looking for fixers, and found one. And it said that the owner committed suicide in the property but did not die in the property. Okay, so the law says that you're supposed to report it if a person passes away in the property. But kudos to this agent. Yeah, that he disclosed— he or she, I don't know what it was— that disclosed this information, because that is pertinent information.

You know, you're gonna find out the second you move in.

You're like, absolutely, the neighbor's gonna come over and go, wow, they really cleaned up this place. What are you talking about? Well, I know they rehabbed it, but what are you talking about? Yeah, that's the room where, you know, he took the gun to, you know, and ate the gun and crawled out. The paramedics were here like right away, so they saved him. But when he got to the hospital, he died.

Oh man.

That's, that's disclosable information.

Yeah.

You know, because yeah, you, you think, you know, as a listing agent, you think, oh man, nobody's gonna find out. The first thing somebody's gonna find out is when the neighbors come over.

Yeah.

You know, it's like, okay, we— oh, we didn't know that.

Yeah.

So anyway, kudos to that agent who actually put that information in there. Um, and, and I, I mean, I like to do the same thing. If there's a death in a property, I put it in the agent comments.

Yeah.

Because, you know, there are some people that are superstitious and they want nothing to do with a dead body in the house, even though it's been removed. So I would rather know that up front. If you have a problem, then just don't come over and don't put an offer. There are agents that think differently about that. They say, okay, well, we disclose that after they put the offer in. Their thinking is come over, fall in love with the house.

Yeah.

You know, but yeah, I— any— when you disclose it, just if you have that Fear, you're going to cancel. There's no doubt. Now, it's not unusual or impossible if I have a house listed, let's say for a million dollars, and there was a death in the property, and I get a call from a person who has that superstition, and maybe they're savvy, and they're going to go, Joe, yeah, I think I can live with a death. At $900,000, would your client be interested? Yeah. Well, yeah, my client would be interested. So money does talk in those situations as well. So if I'm going to save $100,000 because somebody died in here, could be worth it. Could be worth it. Okay. And on the same token, I was buying a fixer to fix it up. Nothing disclosed on the MLS. Nothing. I get disclosures from the Agent, listing agent, death in the property. I go, oh yeah, this is, this is not good, you know, because on the MLS we're supposed to disclose whether there's a death on the property or not. I mean, there's a checkbox.

Yeah.

I like to write it so that agents look at it because you, most of the time you don't read what's marked on there, right? There's a stove, you know, there's a microwave, and there's a— oh, death in a property. We don't, we don't even get that far. So working with an experienced agent that I am, I went back to the listing agent. I says, "Whoa, this should should have been disclosed. You know, you didn't tell me because I'm flipping this house and it's going to matter at the end of the day." Now, it did not matter because the where I was flipping the house, there's not people that are buying that are superstitious. So it really didn't matter to me. But I needed to take advantage of the situation. So I called her back and I said, "You know, we we need." renegotiate this price. I, I want $30,000 reduction for this death because I'm gonna have to deal with it at the end of the day. She went back to the seller. The seller says, uh, I'll give you $15,000. I said, okay, I'm $15,000 in the better here. I'll take it.

Yeah.

Yeah. So you have to take advantage of those situations when they come up, you know?

Yeah, absolutely. I wonder if that's somebody's niche, go after death and property. Yeah.

You know, you could search for that on the MLS. Hmm.

Death and property.

I, I could tell you, um, there are certain areas in Orange County, one city in particular, if there's a death in the property, it's not gonna sell. So the only saving grace, I would say, if it wasn't a violent death, it was just a natural cause death. Is if you were to buy it at a really, really good price, discounted price, just hold on to it for that 3-year period and then put it back on the market after that, because you think you don't have to disclose it at that point in time. So yeah, okay, that's the move if you have the money to wait 3 years before you, you know, rehab it and close it.

Rent it out, maybe.

Sorry to interrupt, I'm just giving you your 10-minute warning.

10-minute warning.

10-minute warning.

That's good.

Because there's a big debate going on tonight.

Yep.

And, uh, we have to go from here to the location where we're watching.

Popcorn.

We're going to Big Time's house.

Nice.

Yeah.

Heck yeah.

Yeah.

That's cool. So I got—

I gotta go there. Do we have, uh, other than Chad— does Chad have any questions or anybody else?

Uh, Stephanie chimed in a bit earlier. Um, what I'd like to tell agents is what my mom used to tell me: no one wants to hear your excuses but you. Yeah, very true.

It's very true.

Very true.

Nice. I have a video, a couple videos in there.

Yeah, okay, let's hit some videos.

Maybe do like the top— the bottom one since we're talking about the real estate sale gone wrong. Uh, no, it's the third, third one.

Creepy real estate agent story. Okay, I know this did get a little like spooky. We need like some spooky music. Okay, here we go.

All right, one of the creepiest things I have seen in my real estate career is I walk into this empty foreclosure and all I saw was this record player and a few other personal items. And so the house had obviously been vacant for a long time. So I get this like chill going up the back of my spine and I'm walking around and out of the corner of my eye, I can still see it taped to the refrigerator is a cabbage Patch doll with duct tape going across its neck. I don't know who the heck left it there, whether it was someone that was maybe squatting in the house or the former owner, but I literally ran out of the house like the little bitch that I am and had somebody else come and get the doll. Would you have stayed in the house and kept the doll, or would you have kept running like myself or quickly walking like I did? Let me know in the comments below.

That's true.

That's not even that scary, I guess.

I mean, it's a little scary.

No, it is scary with that music was playing on the record player.

But yeah, that's, that's not scary.

Well, yeah, coming from this guy, easily scared.

I mean, I've been, I've been at houses, and I do have a policy. When I go to a house, I knock on the door even though I know it's vacant. It says it's vacant. I always knock on the door. Why do I knock on the door? 2018, you know, everybody was losing their houses and stuff, and there were people that were squatting in houses, and I'd be knocking on the door and I'd hear people running out the back, you know, and they weren't rats, right? They were people running out the back door. So I've always made it a policy to, you know, and especially when I show houses to other people, I always knock on the door.

Yeah, you never know what's going on.

Open the door. Realtor here. Yeah, you know, it's like—

Realtor with a warrant.

Realtor with a warrant.

I like that.

Realtor with a warrant here. The creepiest. Just let them know, you know. Honestly, if it's vacant or, you know, staged, you never know when somebody could have, you know, broken in. Yeah, let them know, scare them out of there. Hopefully, you know, they're not waiting with a bat or something. Oh my God, and you sneak in on them.

Oh, it's terrible.

It's a good tip.

The creepiest one I went to was Big Time's when he had his Joshua Tree.

Yeah, this was scary.

On like the dirt road.

Oh yeah.

And I couldn't get the lockbox.

In the middle of the night.

Middle of the night. So I jumped the fence, couldn't get the lockbox, so I jumped the fence and it was just like all the doors were open and all the lights were on. I was like, hello? Like, felt like someone had just been there.

It was so scary. And I, I was in the car, I was like, get back in the car.

Walked around, had all these like burned out cars. For sure someone's hiding out there.

I don't know if he still has that one.

No, he got rid of it.

He did? Thank God.

Yeah, yeah, that was like the scariest one.

That was scary. Yeah, and we had to go by so late because we did some sort of long loop where we went to Hemet, then Joshua Tree, and then by the time we got to his and And yeah, it was scary.

Well, that's because you're finding deals out in the middle of nowhere. That's why.

Yeah, it's a problem.

Yeah, it is.

So you don't do that anymore.

Alrighty, 5-minute warning.

You have another video?

Yep. Let's do one more because we got 5 minutes.

Okay.

Is Liz on?

Uh, no Liz today.

Oh my gosh.

This might be her first show she's missed.

Liz, wherever you are, we miss you.

Hello. Okay, we got why agents fail, things I would not do when hiring a real estate agent, or real estate sale gone wrong.

Pick one.

Pick one.

Real estate sale gone wrong. Let's go. Oh, I lost the, um, audio. How did I lose the audio here? All right, bear with me, folks. Let's try this again.

See if this works.

Let me restart it. Nope, I have no audio on this one.

Go up to the audio thing.

Oh, oh, oh, I got it. It's my fault. Producer error. Producer error. Hold on.

Gotcha.

Fixing it.

Nothing's your fault.

Unless we know. No, change that to chat, the audio up there.

Yep, chat.

Yeah, because I tried to change it.

There was this one time that—

Restarting one more time. Sorry.

Okay, I always tell my kids to inspect what they expect, and I'm going to say the same for you if you're hiring a real estate agent. There was this one time that we were talking to a sweet couple that didn't understand why their home didn't sell. Well, as we got to digging into it, my agent that was going to be meeting with them realized that instead of reducing their sales price from $1.5 million to $1.299 million, the real estate agent put it on the market for $12 million and added an extra zero. And left it that way for over 30 days. You guys, no wonder their home didn't sell. Their home was priced at $12 million instead of $1.2 million. Always inspect what you expect when you are partnered with a real estate agent. And if you ever have questions, our team is always here to help.

That's, that's great information. When I list a property, I always send the listing information to the seller.

Oh, nice.

Please take a look at this. Let me know if you want anything corrected. That's, that's a human mistake there. Okay. That nobody caught it.

And they're just like—

It's like very unprofessional.

I don't know why.

I mean— I mean, I've had sellers tell me, Joe, like, my house is the best one in the neighborhood. I think you should put it for $12 million. Well, the comps say it's only worth $1 million. Yeah, but I'm waiting for that oil chic. You know, that has more money than he knows what to do with to buy it.

He's gonna want this one.

I go, why would an oil sheikh with more money than he knows what to do buy your house for 12 and it's only worth 1? Does that make sense? Oh yeah, I guess it doesn't make sense. Yeah.

Oh my gosh, you can't be satisfied with the 1. Oh boy. Yep. So in the end, reach out. To Joe. He's got experienced agents.

Experienced agents that I hear from all the time asking me questions and stuff, which is fine. I love it when they do that. Yeah, makes my day go by a lot quicker.

Yeah. Um, so if people need—

I've been waiting a long time for this debate tonight. So I mean, I've, I've got bets, but I'm not gonna You know, disclose them here on live TV with the massive audience that we have.

Yeah, well, you'll have to find out for yourself.

Joe Rogan is blushing with, you know, the numbers that we have.

Exactly. You know, you had an extra zero, a few extra zeros on there. Yeah, cool.

Get there. Well, um, yeah, we are right at 5 PM.

All right, let's do it. Okay, we'll see you guys next week, and we appreciate you tuning in. Thank you so much.

Thank you. See you later.

Bye.

Watch the debate. If you want some more advice on real estate investing, reach out to us one-on-one.