Standing Out in Ohio Podcast

Real Estate Ethics and Legal Pitfalls Revealed

Jim Troth

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Is the stress of moving and selling getting you down? We share our own frustrating experiences with sky-high rental truck costs and the disappearing act of free moving boxes. But that's just the tip of the iceberg! This episode also brings you into the unnecessarily heated world of real estate transactions, featuring a tense re-inspection drama. When an agent demanded an updated termite inspection report, it set off a chain of fiery exchanges and procedural confusion. Discover why the NPMA 33 form is so crucial, and how adhering to state regulations and maintaining accurate documentation can save you from legal headaches.

Ever faced pressure to cut corners in real estate? We expose a troubling incident where an agent tried to push us into bypassing state rules. Learn the severe consequences of fraudulent practices as we share stories including potential felony charges over fake invoices and inflated repair costs. We also touch on the real estate market's current pulse, including the tantalizing prospect of lower mortgage rates on the horizon. This episode serves as a crucial reminder of the importance of honesty, professionalism, and ethical standards in every transaction. Tune in for eye-opening insights and essential advice to navigate the ever-complex world of real estate.

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Speaker 1:

hey everybody, welcome to the standing out. How podcast this is jam that course. With me is laura the office. Goddess, hello everyone, and heck of a good mover we are working on that, yes, we are slowly moving into the new house slowly. Oh my god well, we have very limited time for this busy season.

Speaker 2:

Yes.

Speaker 1:

And it's just hard to find the time. The struggle is. The struggle is real. Well, it's amazing. It's like holy cow and rental. We'll talk about the rental expense, that'll deal it in some other time, but anyway, rentals you want to rent a box truck for moving is stupidly expensive I don't know when that happened.

Speaker 2:

And then on top of it, you can't just go to like kroger's and buy the old egg carton boxes like he used or get the egg carton boxes like I'd get them for free. I'd tape them up and and use them. Oh no, you've got to go to like home depot or lowe's now and buy specific boxes for moving, because they don't give away boxes anymore at kroger's or meyer or any of those places yeah, well, probably somebody got cut on a box, or they.

Speaker 1:

They're a little kid. They let the little kid lick some old eggs on the carton and they got sick. So now it's just a paranoia thing. But, anyway somewhat liability.

Speaker 2:

Yeah, that's a good segue to the next one.

Speaker 1:

We got a story regarding a WDI that was done a month ago and then the agent was basically demanding that the report be updated.

Speaker 2:

Well, don't tell them too much, yeah.

Speaker 1:

But first listen to this. All right, I do love that jingle.

Speaker 2:

I do too. I always think of it in my head.

Speaker 1:

Well, that's fine, so anyway.

Speaker 2:

so, so, laura, we did inspection, okay, so like a month ago did this a month ago, and so we will occasionally go out and do what we call a re-inspection, where the buyer has said hey, I want items a, b and c fixed, and they want to make sure that they were done correctly or even done at all, because we found times when they weren't even done at all often regularly, and so that was what today was supposed to be a re-inspection it was like nine items.

Speaker 2:

They sent the list. We had all of that stuff. Nothing on the list and the text messages and phone calls with anybody said anything about termite. So we go out and we're doing our re-inspection. All of a sudden the buyer's agent shows up with her happy little ipad and goes hey, can you change this termite report for me? She's like I need to update this, to update this you should update this and our inspector's like say what I can't do, that no, but that's.

Speaker 1:

He's like I don't think I can do that, let me double check. So he calls us no, you cannot update a report NPMA 33, that's a form. The state requires it be on. No, you cannot update a report NPMA 33, that's a form. The state requires it be on. You can't just update and go, hey, it's a brand new report. You can't do that. So the agent and this started like what? 9 o'clock this morning, 930?

Speaker 2:

932, I think, was when I hung up with the inspector.

Speaker 1:

It was like five, six hours she is calling, texting, and then have the Emailing. Then have the mortgage person, the lender, call in demanding that we write a letter saying that it's okay, that everything's been treated, everything's fine. They don't want the new form or anything like that. We're like why don't you just get the receipt from the company that treated?

Speaker 2:

Because that supersedes us anyways.

Speaker 1:

Well, it's the treatment. That's what I mean. It's the treatment.

Speaker 2:

That's the verification of treatment.

Speaker 1:

And they go well.

Speaker 2:

the lender will not accept the paid invoice for treatment First time in 22 years, I have never heard of a lender accepting an invoice for treatment. Sounds fishy, sounds crazy. Well, and then the whole. Oh my God, you're horrible. Terrible because you're not writing this out for us, you're not updating this, you're not doing this on letterhead. You're horrible, terrible people. How dare you actually make us think that we need another npma? 33?

Speaker 1:

so we called there for the state department of agriculture runs the termite on the wood destroying insect licensing the program. We called, spoke with him, got a supervisor hey, this is what's going on. They want to know if we can update. He's like no, you can't just update that. We're like well, what? So we told him the scenario. So we told him the whole story. The month ago we did find termites. I think he found termites and carpenter bees and it looks like it's been treated. The agent wants us to update the report or write a letter and he's like no you can't just write a letter.

Speaker 1:

If you do anything regarding wood destroying, it is a report and it's for a real estate transaction. You have to do it on the NPMA 33 paperwork. And then I said, because there are any circumstances you see, we're just writing something on a piece of letterhead would be okay and he's like, no, never. So everything we did was correct. This agent is just wouldn't, listen to us not listening.

Speaker 1:

The fact that the loan officer said I don't want to get involved in it because we tried. We're going to email this proper information. Hey, we talked to the supervisor of the state. This this is what he's saying is what needs to happen. And the lawyer was like nope, I don't want to be in the middle of this. Well then, why the agent started? Because she apparently she believes she knows better than us which is stepping out, overturning her role in the real estate transaction, unless she's a licensed wood destroyer inspector, which I highly doubt well, if the loan officer wanted to stay out of it, why did the loan officer call and tell us?

Speaker 1:

that she needed that letter right away. She's not gonna get a commission unless the sale goes through.

Speaker 2:

That's the only reason I can think of well, and they both sat there and argued with amy. Amy repeatedly told them no, we have to do this, this is state law. I sent an email and said this is state law yeah like I, I don't know how many different ways, and then this agent goes behind amy in my back and emails Jim directly going hey, this is what's going on.

Speaker 1:

You need to take care of these people and tell them that I need my letter by the time I got home while you and I were out and about doing other things, so I was aware of what was going on, talking to you and Amy. So by seeing this, I'm like right they are. At some point somebody said that, yeah, they will take the, the invoice, but then again they said the client had told us that they would take the invoice.

Speaker 2:

Client client was cold the whole way through this because the client didn't call or complain once it was all the the agent.

Speaker 1:

Client knows that we work for his best interest, which means we're staying out of trouble because we find things that were requested to do and the agent just wants to sell, most likely in this case. Why else would you want to risk losing your license, or at least getting your real estate license? Get a fine, because you're overstepping your role of trying to tell other people how to do things when it's out beyond your scope. What article of the ethics is that? It's like article 15, 14, 15?

Speaker 2:

I was thinking 15. It could be. It's one of the teens.

Speaker 1:

So anyway that was our day.

Speaker 1:

But it's just insane and I don't know if it has anything to do with the NAR new rules for when they can't list how much percentage the buyer's agent is going to get. I don't know, but I can see agents going like the buyer's agent going oh crap, we're going to lose, we're going to start making less money because now we got to negotiate down our commission, right? I don't know. I have not seen any offers written up on the new paperwork. I'm not certain how it's going. I can see.

Speaker 2:

I've seen a lot of stuff on Facebook where they're talking about it and different agencies are going about things differently. I've seen seminars on how to correctly negotiate your commission for a buyer's agent. I've seen all kinds of stuff on Facebook recently for this.

Speaker 1:

Yeah, so I don't know. Hopefully we'll find somebody who wants to talk. I tried to find a real estate coach that would join us for the podcast, who could discuss this. Apparently, no coach knows enough about it yet To come on. To come on or have the time. Maybe they don't have the time. If they're half as swamped as we are.

Speaker 2:

I can see that yes perhaps, perhaps, right?

Speaker 1:

I can also see I don't want to say anything and it's being wrong. So they want to stand and kind of see how things shake out before they want to give an opinion on things.

Speaker 2:

Yeah, all I know is I've seen a lot of stuff being posted on Facebook and it's flying back and forth.

Speaker 1:

Yeah, but anyway, the agent today. She was quite irritating with how she's treating Amy, just being rude and just saying how she needs to do it, how she doesn't understand. You don't need to understand. This is the state rule. If you want to go contact the state Department of Agriculture, here's the phone number straight to the supervisor.

Speaker 2:

We're going to go behind our back and email you, thinking she's going to get a different answer from you than she got from Amy and I.

Speaker 1:

The email that I draft to them that I have not sent to her actually tells me she needs to be careful because overstepping her role can't get her license in trouble. I was nice and professional about it, but I have not sent it because it looks like maybe they need to stamp it. I guess they are going to do the paid invoice from the treating company. But here's another thing. Here's my first thought. First of all, it's really fishy to say they won't take a paid invoice, right? That's really fishy in the first place.

Speaker 2:

That's a huge red flag.

Speaker 1:

Looking at the repairs that were supposed to have been done but yet were not done at all or done incorrectly, makes me wonder if this thing was even treated and the seller just did stuff himself. And it does not meet the requirement for professional treatment because not for a real estate transaction.

Speaker 2:

And that very well could be, which is why they were trying to push us to write on letterhead that we saw it was treated. Which is why they were trying to push us to write on letterhead that we saw it was treated, Because then that would still cover their loan in spite of it. But then that sinks us Because, you know, anything happens and they find termites there in a few weeks she's going to throw us under the bus faster than you can say oops.

Speaker 1:

Yeah, well, shouldn't have written that letter. It always goes down. If you do a request to remedy and people want to know if things got fixed, don't hire the home inspection company to come take a look at it. Maybe you can, but we much prefer you get receipts from the person who fixed it. So if it's not done, right you can call them up two months later.

Speaker 1:

Hey, you had traded for carpenter bees. I have carpenter bees coming out of these holes. I need you to come fix this. At least you know who to come back against and plus and we have. That's not a percent, though. We have seen fake invoices.

Speaker 2:

Yes, we have.

Speaker 1:

From sellers, sellers creatingices. Yes, we have From sellers.

Speaker 2:

Sellers creating them.

Speaker 1:

Here I had this all treated. What was it? That was a fake invoice.

Speaker 2:

So we just recently learned about one, and this was with another home inspection company out west.

Speaker 1:

We've had it ourself.

Speaker 2:

Well, not the one I'm thinking of. So this was for a warranty claim that was being made against the inspection company, and they had an invoice detailing how much things were going to cost. This went to E&O.

Speaker 1:

Insurance Right. They're threatening to sue the inspection. This went to E&O insurance Right.

Speaker 2:

They threatened to sue the. This went to E&O insurance and the E&O insurance requested that the unhappy clients submit three invoices. And what ended up happening is that the client somehow manipulated the numbers to increase it by a couple thousand eligible, called, caught that and called her out on it and basically said you guys have just committed a felony. You have the choice to walk away and shut up or we'll turn you in for forging and and fraud and all of that stuff.

Speaker 1:

So it increased it only $2,000.

Speaker 2:

Only $2,000.

Speaker 1:

And with that, she faced a felony. She faced a felony so, so no, no matter what you got to be honest, be honest and ethical what you're doing and it is what it is.

Speaker 1:

Yeah, and you just work with it it was only 75 bucks, right, and that's what you needed. And first of all, you're asking us to first go against the rules state rules in the first place by here re, you know, editing an older thing that's no longer. We can't do that. Then you have to do things differently. We tell you we can't. I'm like I don't feel bad for you if you get in trouble, just like I wouldn't feel bad if one of our guys which I can't see this happening say they did something wrong and they I don't know, got busted, got busted.

Speaker 2:

And they got in trouble.

Speaker 1:

I don't feel bad for you for getting in trouble.

Speaker 2:

You make choices and you can choose to be a good person with decent morals or a crappy person with crappy morals, and you get what you put out, and that's life.

Speaker 1:

So here's what else irritated me today that that agent would did not want her client have to pay for anything. But so she, so she's gonna art. She was arguing like I'm gonna try to save my money, my people money. I'm like, yeah, but but through disrespecting our time. And do you know what I'm like? No, she's in the wrong and they just try to commit, I don't think, probably a misdemeanor crime?

Speaker 2:

I don't know, but the gentleman that was the supervisor over the termite department said that that termite report is good for that day Once you walk off of that property and that report is submitted. That's it, it's done. Anything happens after that and it needs to be on a new NPMA 33. Yeah so for everybody out there.

Speaker 2:

He was very adamant, there was no gray area. Yeah, he was very adamant, there was no gray area. There is no letter at this point in time that will ever be accepted for a real estate transaction for a WDI and at this point in time, you will never get one from us because we have just no.

Speaker 1:

Well, it's a state law.

Speaker 2:

It's a state law. We cannot circumvent that. We will lose our license, just like you guys have a license if you're a real estate or a plumber or you know whatever. We have a license too and we have to abide by what our state laws are Like getting the agreement signed before we go out and do the inspection. That's a state law. You would be amazed how many times we saw a destroyer now.

Speaker 1:

You just can't show a house unless their buyer stuff is signed agreement with them.

Speaker 2:

So remember, just like you need an agreement signed, we need an agreement signed if you think having to have that buyer's agreement with you sucks.

Speaker 1:

Now, that's what it was like for us, like four years. It was four years no five years ago. Five years ago, when licensing started, we had. We always got people to sign things anyway, but now it's like absolutely before you even leave the house. Well, for us we don't do unless we leave. We don't leave the house before we know they sign because it takes travel time, but that's the way it goes. So I think that's it for this one. We're kind of debating. We're going to turn this person into the state morally.

Speaker 2:

So here's a question for those of you listening. Feel free to put something in comments or email. Should we or shouldn't we turn her in to the board for an ethics violation, and I want your reasons why or why not I mean the guy from the state said the state statutes would support us yeah, he. He said flat out. If you want to turn her in the stat the no, the ohio revised code would support you revised code yeah, so oh.

Speaker 1:

I don't know.

Speaker 2:

Give us your thoughts because we're kind of torn on this one.

Speaker 1:

It was wrong for her to ask. If she didn't know, she didn't know, but she should be willing to go all right To learn. To learn All right, really, okay, I didn't know that.

Speaker 2:

Can you?

Speaker 1:

still can you write it up, but maybe maybe get a little bit of a discount. That's a totally different conversation.

Speaker 2:

Continuing to escalate, or going behind Amy and my back to try and, you know, narc us out like we're bad little girls that weren't doing what she wanted us to do and weren't doing it right. Laura, you're a bad girl, yeah, so she wanted us to do and weren't doing it right.

Speaker 1:

Laura, you're a bad girl, yeah. So she could have done it a different way but to drag out like five, six hours of like emails. Text. Phone calls, Texting Like you don't make me want to help you when you're trying to force us to do something that will get us in trouble. I don't feel bad. What happens to her?

Speaker 1:

No Besides how many Asians are there? 10,000 Asians in central Ohio and what? Maybe 3,000 houses? I don't know. I don't know what's going on right now. I know sales have gone down. I know that In some areas it dropped 30%. Maybe we'll talk about that.

Speaker 2:

Maybe that'll be the next one.

Speaker 1:

So anyway, let us know if you think she should be turned in.

Speaker 2:

And why?

Speaker 1:

Yeah, if you want to add why, that's fine.

Speaker 2:

I'm curious to see.

Speaker 1:

Well, I mean the longer the current agents allow bad agents to stay there. That's become the standard.

Speaker 2:

Right, and so when you go and you negotiate your contract and you go, I'm a good agent, I deserve that 3%. They're going to be like listen, I just heard about this other agent who did XYZ. What makes you better than them? Prove it to me and how are you going to do that.

Speaker 1:

Yeah, especially when new agents get paid the same percentage as the experienced agents.

Speaker 2:

And I have talked to other agents who have been experienced and they're like why I've been here for X number of years, why shouldn't I get 3%? Why should somebody new coming in get the same percentage that I do? And that makes sense to me. Any other job you start out in you start low man on totem pole and you work your way up in salary.

Speaker 1:

But the agent is still trying to recommend the cheapest homeless pension. But the agent is still recommending the cheapest homeless pension Cheapest newest homeless pension will catch less.

Speaker 2:

Right which, once again.

Speaker 1:

I know some guys who've experienced they've cut their price because they're desperate to get work. I mean, if that's all you got to go on is your cheap price, we're not going to be Walmart.

Speaker 2:

No.

Speaker 1:

So, and neither is the name of any of the agents.

Speaker 2:

No, you should not devalue yourself, so anyway thank you for listening.

Speaker 1:

Have a great day and I think some stats We'll get some stats. We'll show Paul some stats. It's interesting. It's election year, that's always interesting.

Speaker 2:

Oh yeah, I did hear something about the potential for mortgage rates going down, so we'll look into that too. For the next one, I heard September or October. Like genuinely I did.

Speaker 1:

I don't know.

Speaker 2:

It could be political bullshit, probably is Alright, we can go Bye bye, bye everybody.