It’s Saturday, and you know what that means. If the Arizona Republic doesn’t piss all over the real estate business, someone might accidentally go out and buy a house.
Here’s the scoop:
Complaints against real estate agents are on the rise, with consumers accusing them of everything from selling property without a license to cutting corners to make a sale.
As of June, the number of complaints opened with the Arizona Department of Real Estate had jumped 53 percent since 2003, the year before the housing boom took the Valley by storm. Complaints forwarded for discipline increased 150 percent in that same time.
If those numbers sound nebulous to you, you’re reading too carefully. Stop that!
Part of the spike in complaints reflects the rush of new agents who flooded the market to take advantage of the housing boom of 2004 and 2005.
Does it? Is there a correspondence of complaints to new licensees? If there is, it’s not demonstrated in this story.
The number of new brokers and agents rose 38 percent in the past three years, well behind the pace of complaints.
New brokers aren’t new licensees, so the correlation is even smaller than intimated.
Here’s a real number, though:
Most of the complaints come from consumers. Others come from agents complaining about other agents or governmental jurisdictions reporting what they believe are illegal subdivisions. In all, 1,620 new complaints had been opened with the real estate department through the fiscal year in June.
There are 90,000 real estate licensees in Arizona. About 90% of ADRE complaints are dismissed without action. With the right microscope, this “news” is a conflagration.
The top three complaints: License violations, convictions or failing to disclose a conviction, and advertising violations. Real estate advertisements must list the name of the broker that the salesperson works for, according to the department.
And these would all be complaints brought by the ADRE or other agents, not by consumers.
Elaine Richardson, the state’s real estate commissioner, said she was alarmed by the trend of new complaints exceeding the number of new brokers and agents.
“If we don’t get a handle on it, that brings us back to people getting bilked out of their money,” she said.
Which is to say that, to Commissioner Richardson’s knowledge, no one is “getting bilked out of their money” now. If you want to write for a newspaper, it is vitally important that you not know how to read.
We come eventually to the anecdote. There is only one, which proves this is really big news, but we can’t have a news story without an anecdote. What happened? Some poor, shivering, semi-literate, starving people in (ahem!) Fountain Hills lost their earnest deposit when they didn’t disclose to their lender that their financial situation had changed. How is this their real estate agent’s fault? Well, it cannot possibly be the fault of the only people capable of disclosing to the lender that their financial situation had changed. This is America!
We have quotations from reporter Glen Creno’s favorite Realtors, even though they have no more specific knowledge about ADRE cases than anyone else. I think this is supposed to be “the other side of the story” — but there is no other side to this story.
There is no story. Complaints are up after a two year real estate binge. Big surprise. Virtually all complaints will be dropped, and those that stick will not have been brought by consumers. No one is losing money who didn’t ask for it by engraved invitation.
Want proof in hard numbers? We actually get a few at the end:
Richardson took office in 2003. She says she’s trying to more strictly enforce regulations. In 2003, the agency issued 46 civil penalties totaling $114,500 in fines. This year, it was 117 totaling $218,150. Not every complaint is settled with a fine.
Fines for 117 licensees out of 90,000 licensees total. It turns out real estate agents are as safe as houses.
Now that’s news!
Technorati Tags: arizona, arizona real estate, phoenix, phoenix real estate, real estate marketing
Todd Tarson says:
Thanks for providing the microscope. Most hearings that I sit on (that is when a case finally gets through the system and is not dropped for other reasons) involve agents or brokers with plenty of experience. Hardly any that I’ve sat on have involved brand new agents.
There was one that I’ll share with you on (and try to conceal all facts as I’m sworn to do so by my duties to the Committee).
Brand new agent with their first listing of a lot. This agent (Agent X) is only representing the seller. The buyer wishes to purchase the listing and hires a completely different broker and agent (Agent Q)from a different brokerage than Agent X. AFTER CLOSING the buyer comes to find out that he bought the wrong lot. He files a complaint against the listing agent (Agent X). He has a beef with the Agent Q as well, but Agent Q and the broker ‘give back’ some amount of money to the buyer. Buyer is happy with Agent Q at this point, but goes ahead with the complaint against Agent X.
Also keep in mind that Agent Q has been in the business for years.
Again, I can’t get into specific facts, but we are talking a brand new agent in Agent X. Before the hearing panel members are given written testimony and evidence from both sides in the complaint. Sometimes the case is already made to some degree. Before the hearing we call for executive session and discuss why we are even here since it is painfully obvious that any ethics violation here is at the hands of the Agent Q. We then begin the hearing and let the buyer make his case. Once he concludes we do NOT let the respondant respond or testify and the panel files a complaint against Agent Q. End of hearing.
Now Agent X is still on the hook for a follow up hearing, but at least the right agent (Agent Q) is now named in a separate complaint. Agent X will be found not in violation, but I won’t make the same bet for Agent Q.
November 20, 2006 — 4:05 pm
orlando says:
I just purchase a home novmber,and in december it rain and my basement flooded come to fine out that the foundadtion is bad what can i do to the realtor that sold me that house noing that the foundation was bad.
February 28, 2007 — 9:02 am
Greg Swann says:
> what can i do to the realtor that sold me that house noing that the foundation was bad.
If either Realtor or the seller knew that there was a material defect in the home and did not disclose this fact, you probably have a case. See a local real estate attorney to see what your rights are and how they can be enforced.
February 28, 2007 — 9:06 am