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  Long term success in real estate is built on trust and referrals.  With this in mind, it’s a shame that some fly-by-night agents are abusing their position at the expense of an industry’s reputation.  A recent article in REALTOR™ Magazine discussed the problem of loan fraud. 
   I know there are many naysayers that are highly critical of the National Association of Realtors and would expect the article to be more of a ‘how to’ than a critical condemnation of the practice.  The truth is Realtors as an organization have high standards designed to protect the public and the reputations of Realtors.   If you truly believe you benefit yourself by working without one, I highly encourage you to take on the process of buying or selling a home yourself.  If you get sick of the experience, try it with a Realtor and you’ll begin to appreciate the whole idea of specializing in a practice.  That being said, I was once a naysayer too. 
         Realtors have a Code of Ethics.  If they violate the code or the law, they can be fined, have their license stripped from them, and be publicly humiliated. (All decisions and judgements are published in a newsletter.) One lapse of judgement and they may be barred from working in real estate all together.

  One of the best things people can do to protect themselves in real estate transactions is to keep in mind the following:

1.     Buying a home? Have someone represent you.  In most cases, the cost that would be paid to a buyer’s agent has already been agreed upon between the seller and listing agent.  If there is no buyer representation, the selling agent just makes more money for himself.  This being the case, the listing agent is probably the least likely individual to treat you fairly and get you the best deal.  Their allegiance is to the seller.   Some states allow agents to work as an agent for the transaction, providing equal services to both buyer and seller.  In reality though,  it’s unlikely that the listing agent will be completely unbiased.  You can eliminate much of the headache of the transaction by pushing the work on a good agent.  For legal reasons, if you have already signed a contract with a listing agent, you may not be able to bring in a Realtor.  That should not stop you though from having a lawyer review the contract terms and be present at closing. Especially if you’re not comfortable with reviewing a HUD-1 (a what?) at closing.
2.     Selling a home? Make sure you list it on the MLS so the largest group of buyers will be aware of it and you can get the best price.  Do your own homework as to the value.  If you’re listing with a Realtor, have him provide you with comparables.  Drive by them yourself and make a decision of how comparable they are.  Still not satisfied? Go see the homes your home will compete against. Check out this great advice in Money Magazine.  

3.     Facing a foreclosure? Beware of real estate investors.  Most investors prey upon the weak and desperate.  The only thing they care about is making a quick buck.  Make sure you understand what you are signing.  Any contract should be clear and straight forward.  You should not have to make a decision on the spot.  In most cases the deal that is being presented to you isn’t really the best option for you.  It’s just the best deal for them.  If possbile, seek legal advice.  Contact an Attorney who also works as a Realtor or find an agent that is specialized in negotiating with banks.  Banks don’t want a foreclosure and will often accept a lower price than what is owed to avoid it (called a short sale).

4.     Know a Realtor’s Code of Ethics.   In most States, the contract itself will describe the responsibilites of both you and the Realtor.  If a Realtor fails you in a manner where you actually lose earnest money,  don’t be afraid to take legal action.  All brokers/broker associates in Colorado must carry errors & ommisions insurance for when they screw up.  Most Realtors, if they recognize it’s their fault, will be quick to make amends with you. If you can’t settle it, file a compaint with your State’s real estate commission.

5.     Avoid breaking the law.  In most cases of fraud, the buyer and/or seller actually know what’s going on and they don’t care.  They are actually pressuring their agents to make the deal work.  To avoid being an unwilling participant, remember the following:  Disclose property defects.  Don’t attempt to slip something by the lender.  Don’t exchange anything of value outside of closing.  If it won’t show up on the final settlement sheets that go to the lender (HUD-1), it’s not legal.  Make sure everything in the contract stays with the home when moving out. Maintain the home in the condition the home was in when the contract was written.  If any repairs become necessary on the home, these should be disclosed to the buyers.

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