Real estate agents take rap for run-down houses

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Atlanta ticketing real estate agents for run-down properties

By D.L. BENNETT
The Atlanta Journal-Constitution
Published on: 07/09/08

Atlanta real estate agents trying to weather the slumping market by selling foreclosures have run into an unexpected problem with a city government tired of neighborhoods overrun with derelict properties.

City code inspectors have begun ticketing some listing agents, holding them liable for code violations on run-down properties they are selling, often for out-of-state institutions.

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Several agents with similar properties have been hauled into court over the past few weeks — yet another offshoot of a foreclosure crisis that's spread across the region but hit certain intown neighborhoods especially hard.

Agents, already under pressure from declining sales, say the city's unfairly picking on them because they are easy targets. The city, they say, should be applauding their efforts to get foreclosed properties into the hands of new owners who will properly care for them.

City officials say they just want some of the blight cleaned up.

Rick Hale, a Midtown agent who represents lenders with properties in some of Atlanta's toughest neighborhoods, said he'd never heard of agents being ticketed until he got cited in May.

Hefty fines could scare some agents away from representing run-down housing and drive agents out of the business.

"Realtors are hurting right now," said Hale. "This is not cool. They think we are just going to get reimbursed. But it doesn't work that way. They are going to ruin some careers over this."

The Atlanta Board of Realtors has set already organized a meeting between some agents and the city to soothe some of the tensions.

Robert Broome, governmental affairs director for the Atlanta Board of Realtors, said he understands Atlanta's efforts to get run-down properties in shape. However, he says he's not for slapping fines on every agent who lists properties needing rehabilitation.

"The situation in several neighborhoods in Atlanta is tragic," Broome said. "We are as distressed as anyone about the conditions. I am afraid there may be a little bit of going after the low-hanging fruit — if there's a sign out there, the agent is an easy target."

Hale's been cited for a building he listed for sale at 950 Bolton Road in northwest Atlanta, part of a former apartment complex now abandoned and vacant.

Hale said when he got the citations — eight of them, one for each unit in the building — he thought it was a mistake or a joke. He said he had the building professionally boarded only to see miscreants break in over and over.

Hale said he was advised to plead no contest because that would quickly resolve the dispute and let him get back to work.

He was shocked when the city court socked him with $3,311 in fines last month.

"This is a huge stretch and an injustice," Hale said.

With the buildings owned by several different lenders, an outstanding water bill north of $150,000 and a rough-and-tumble community around the complex, Hale said he couldn't even get an offer with a $12,500 asking price. He has since lost the listing even though he paid the fine.

Hale's also been ticketed for a building at 930 Garibaldi St. and faces a court date in August. Hale intends to fight that one.

Buildings like the ones on Garibaldi and Bolton are scattered around the city but heavily concentrated in communities like Riverside, Vine City, Pittsburgh and English Avenue.

Many sit vacant and dilapidated for months as lenders go through the process of taking them back through foreclosure and then putting them on the market.

City officials said they could not estimate how many agents have been cited. They noted the city code gives officers leeway to cite anyone from the owner to someone who has the ability to control or maintain the property.

Frequently the owners of some of the worst properties are out-of-state financial institutions, which can make it difficult to track them down or get them into city court. Real estate agents, though, are local and have their names and phone numbers right out front.

"They are certainly getting a little bit desperate," said Wayne Flanagan, another agent who has been cited and even threatened with arrest. "One [code enforcement] agent told me, 'We don't know how to get hold of out-of-state asset managers. We know how to get hold of you.' The only reason they are fining us is because we are available."

City officials say that's not true.

"I want to make clear we are not out there citing just listing agents," said Tenee Hawkins, spokeswoman for the code enforcement department. "It is our understanding they are the agents for the owner. They have some agreement to maintain the properties. We didn't just go after the agents because we can't find anyone else."

Hawkins said the department is doing its best to ensure someone cleans up and secures some of the worst properties in the city. She noted there are hundreds of homes and other buildings in distress in various neighborhoods and lots of pressure on the department for action.

"The city is desperate for all of us to take whatever steps we need to resolve this," Hawkins said.

Citations like the ones issued to Hale, Flanagan and others may come down to the language in their listing agreements.

Some contracts to sell for out-of-state lenders can obligate an agent to some duties of keeping the property clean and secured even if that may be nearly impossible. A standard listing agreement doesn't have that language, agents said.

Code enforcement officers can't know which contracts do without first citing agents and taking them to court.

That might make some rethink even trying to sell foreclosure properties.

"What I am mystified by is in some of these areas is why code enforcement is there and not Atlanta police," said Gary Tice, another agent who has been cited. "This is not a code enforcement problem."

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Comments

By Zach

Aug 3, 2008 5:04 PM | Link to this

Wow! Such hard work to sell homes these days.

Three or four years ago a very, very, high-end real estate agent was profiled in the AJC. I really didn't know the rules of the game selling high-end real estate, at least for this one real estate agent.

As I recall she lived in Windward but many of her clients bought homes in the Country Club of the South. Talk about different worlds for real estate agents!!! Cesspools as opposed to olympic-sized swimming pools.

I can't remember everything in the AJC article, but this real estate agent often times paid thousands of dollars to fly in upscale photographers from Los Angeles, or New York, to take glossy photographs of her multimillion dollar listings. Of course the panache factor was of upmost importance. A Kodak picture was a no-go.

Apparently this real estate agent often bonded with her affluent clients and consequently she developed, deep, meaningful, and trusting friendships over the years. That angle was stressed in the article.

This gloriously happy and cheerful agent, along with her husband, was photographed in her expensive boat on Lake Windward enjoying the fruits of her rewarding career.

I wonder if this real estate agent is still flying photographers in from Los Angeles in 2008? Maybe a photographer riding a Greyhound bus from Winder? it would be a little less expensive.

I think almost every sector of the housing industry is in for some hard knocks. The downturn will last a long time, and the foreclosure process has just begun.

I was just reading an assessment the other day from a top-notch real estate guy in California. It opened my eyes quite a bit. I guess high-end homes, in posh areas, will eventually be hit rather hard, too. Super bargains are down the road in posh areas but it's a few years off.

I think these fines are absurd. Even paying a $1000 for a house in a blighted area is hardly a bargain. Are you going to live in the house? Is this house going to attract quality renters--renters who will have the check in the mail on time?

Slap hefty fines, or jail time, on the dishonest people who got us in this mess.

By Phil

Jul 28, 2008 2:23 PM | Link to this

I have been lic for going on 8 years and recently have been picking up more and more bankowned properties, does anyone have a good POC for the requirements for HUD properties, price lists on bording up and trashing out? I would like more infomation on the boarding up and what are the current requirments on trashing out properties. Thanks and I hope everyone is doing ok, its a tough time right now but it will get better in the next yr or so. Phil

By REALTOR�

Jul 20, 2008 4:01 PM | Link to this

DEAR JOE:

I work 12-20 hour days, seven days a week, spend my money to market homes with advertisements, professional virtual tours, stagers, signage, etc. and I made $20,000 less last year (about $35,000 - before taxes and expenses) than the year before and I may make less this year.

Oh by the way, I spend at least 1-2 thousand a year for continuing ed to keep myself abreast and designations (and their annual dues) to differentiate myself.

Oh yeah - our National, State, and Local Association of REALTOR� Dues - over $400 a year...

If I have a Relocation Listing Client - it takes hours to properly prepare a CMA - that is if you are ACTUALLY studying the neighborhoods and each property as you should - it sometimes takes hours to prepare a saturation report in order to prepare a ERC report which can take a full day and requires you to visit at least three comparable properties ahead of time. Not to mention the time to photograph those houses and prepare the Photo Addendum done before the professional photographer takes his photos.

I have worked nine months for one buyer client before, for a $185,000 sale which grossed me $2424.24 before taxes and expenses. I have no idea how many homes I showed them - first East Cobb, then West Cobb, then Smyrna, then they finally bought a condo in mid-town (?????)

Right now I am working with five buyers. One since July 10th, one since July 3rd, one since June 5th, one since May 1st, once since April 8th, OH YEAH, MAKE THAT SIX there is one I have been showing houses to since January of 2007 (an older lady who likes to go see 2-3 houses every month or so because she has nothing better to do I guess, so I do not have the heart to say no to her). These people may never buy - who knows!?

I spent $175 for gas last week driving just one of my clients to see (care to guess) almost forty (40) houses in the $180,000-$200,000 range. Not to mention researching each of those properties to get square footage, mortgage pay-off information, disclosures, actual days on the market, etc., etc., etc.,

I picked them up from their hotel instead of meeting at my office. Do you pick up your clients?

Almost forgot the time I spent writing FOUR different offers trying to find someone willing to accept 'too-low' offers.......BECAUSE EVERY BUYER OUT THERE HAS TO GET A HOUSE FOR 'RAPE AND PILLAGE PRICES' or they are not interested.

Day before yesterday I picked up a client downtown, took him to see a listing which had actually already gone under contract but he insisted he needed to see it for 'educational' purposes, then dropped him off at his doorstep, drove back to the office at 8:30 PM, and wrote and presented a contract for another client.

Last week I saw a foreclosure with no appliances, no baseboards, no light fixtures no HVAC, no light switches, with the ceiling kicked through and insulation everywhere. That home was fairly clean. I have seen homes with the smell so bad you cannot enter, one with a swimming pool used as a trash dump for months. Some where the water was left running, and mold growing, some with even the copper wiring and copper plumbing torn out, and one with the gas meter removed.

Last week I got knocked down at the door by a 100 chocolate lab, backed into a mailbox because the driveway was so steep it was 'invisable' and which will probably cost me $500 to replace - not to mention the cost to repair my car.

One agent I know worked on one deal 6 months on a pre-foreclosure, and then when they got the counter-offer last week; it was fifty thousand OVER the listed asking price because the agent priced it to get an offer.

- Such a great and cushy job - the life of a REALTOR�.

By REALTOR�

Jul 20, 2008 3:59 PM | Link to this

By Funny

Jul 14, 2008 9:59 AM | Link to this

Fraknkly, if miscreants are destroying properties in your neighborhood and you do actually care-- then DO SOMETHING ABOUT THE SCUM IN YOUR NEIGHBORHOOD. It's the local people that are the problem, not the property owners.

By Pericles

Jul 11, 2008 3:44 PM | Link to this

On the contrary, Suz, the property is not owned by Mr. Hale. If the City were citing owners or entities with an ownership interest in the property, I doubt Mr. Hale would object. Mr. Hale is a real estate broker who is contracted by the owner to market and sell a property--not to manage or otherwise operate the property. The presence of "vagrants, drug dealers, you name it" is evidence of the failure of the police department to preserve and protect the neighborhood.

By Suz

Jul 11, 2008 11:20 AM | Link to this

I live near one of the properties owned by Mr. Hale. If the only issue with this property was uncut grass, I wouldn't complain. On the property are burned down apt buildings, trash everywhere, broken windows, vagrants, drug dealers, you name it. This apt complex is by far the biggest eyesore in my area. Some of these people deserve the fines.

By Ryan

Jul 10, 2008 4:24 PM | Link to this

Keep close watch to see if the city actually sends someone to clean the property, especially if they are going to bill or put a lien on the property. I have a current discrepancy with the city because I have always personally maintained my empty properties and when the attorney received title, there was a lien for clean up fees from the city. Is this a new scam?

By Josh Suess

Jul 10, 2008 2:38 PM | Link to this

Talk about violating civil rights with the City's guilty until proven innocent approach. It sounds to me like the individual code enforcement officers and the city attorney are about to find out first hand what the criminal and civil penalties are for violating civil rights.

Even if a listing agreement happened to have an obligation to clean and secure a property, the City is not a party to a private contract and as such has no legal standing to enforce the terms.

-------------

..."Some contracts to sell for out-of-state lenders can obligate an agent to some duties of keeping the property clean and secured even if that may be nearly impossible. A standard listing agreement doesn't have that language, agents said. Code enforcement officers can't know which contracts do without first citing agents and taking them to court."

By Atlanta Realtor

Jul 10, 2008 1:53 PM | Link to this

All you people complaining about the appearance of properties in your neighborhood: If the appearance offends you, YOU cut the grass. As a realtor I have less stake in the property than you do. Remember that when you point the finger at anybody, there are 3 pointing back at you. Do you expect your realtor to clean your house when you put it on the market, too?

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