My personal story on why I decided to start BlueMatch
About 4 years ago I came up with the concept of BlueMatch because I was tired of being burned by bad real estate agents. When I sold my first home, I did it without an agent. My experience was bumpy but I saved about $8,000 in the process. This was back in the mid-2000s when the Real Estate market was hitting some rough patches.
Fast forward a few years to my most recent home and roughly 6 bad real estate agents later. In 2014, I purchased a home in Lone Tree Colorado and my experience was an absolute nightmare. This was around the height of the Denver Metro Real Estate frenzy. As soon as a home hit the market, multiple offers would be made. Almost everyone for over asking. I reached out to multiple agents and very few had time for me. They were all in the mindset that unless I was ready to make an offer that day, I was a waste of time.
I went through about 6 agents until I finally found one that had the patience to work with me. In about a week, we had made a couple of offers on some homes in a neighborhood that was in high demand. Over and over again our agent convinced us not to offer what we wanted to. Over and over we lost out on the homes we wanted to purchase. We grew increasingly frustrated with his refusal to let us overbid for the homes we wanted. We decided to stop using this agent after about 2 weeks. After all, we were the ones finding all of the listings. He was our gatekeeper and provided us with bad offer advice. In total, he may have worked 2-3 hours and that’s being generous.
My Bad Real Estate Agent Cost Me $30,000
I reverse-engineered the problem and started looking for homes that were targeted for rehab that had recently been sold. In about a week, we found one in the middle of a rehab. I walked into the home and found the owner working in the basement. After some dialogue, I asked what his plans were. Just as I thought, he was preparing it for resale. We discussed an offer and I agreed to pay the full asking price if he agreed to not put it on the MLS.
A few months later, my family and I were homeowners again. Since the market was moving up and to the right, we paid about $30,000 more than what we were planning on paying for houses we missed out on. Our bad real estate agent had cost us 30K. That wasn’t even the worst part. Two weeks after we closed on our house, I got a call from that agent. He told me that I owed him a commission on the house because I signed an exclusive right to buy. I was flabbergasted and kindly asked him to produce this document knowing full well I did not sign anything.
The agent could not produce the document and that was the last I had heard from him. I was blown away by the audacity this agent had to approach me and demand over $12,000 for work he never did. As a seasoned startup entrepreneur, I knew at that moment I needed to do something about this antiquated process and protect others from bad real estate agents.
Avoid Real Estate Agents That Force You to Sign Binding Contracts
In every state that BlueMatch operates in, we are required to have each client sign an Exclusive Right to Sell. This document outlines the terms of our working relationship and the terms of their listing. It is also required by law that each person listing with us sign one. Otherwise, we wouldn’t make anyone sign anything.
When you list a home with BlueMatch, you are never bound by a contract to keep your listing with us. You can cancel it at any time for any reason without penalty or fees. If an agent is trying to force you to sign a listing agreement that does not let you walk away without penalty or fees at any time, you should run far away from that agent. These contracts are used all of the time to force clients into doing business with a Realtor even if they do not want to.
Contracts that are created to lock you into terms or charge you money if you break them encourage agents to use any means possible to get you to sign. Often times this means over-promising and under-delivering or just flat out lying. If an agent is confident in their level of service and performance, they will never lock you into anything you can’t get out of easily.
Avoid Agents that Break the Law or Are Unethical.
This sounds very obvious but this area is where people often miss the most. Real estate agents are driven by money. Plain and simple. Bad real estate agents will cross ethical lines and even break the law to get your money. Most of the time they do it without you even knowing. At BlueMatch for example, agents are constantly crossing ethical and legal lines when it comes to signing crossing.
Sign crossing is the illegal act of agents soliciting your listing while you are in contract with another agent. Agents will usually disguise this behavior using tactics that appear to be helpful. They will reach out and say things like “we can’t find your listing” or “here is some advice on how you can sell your house”. Some will even bait you with a fake buyer and make a statement like “I have an interested buyer, can we meet before I bring them”.
In real estate, it is 100% unacceptable by industry standards for an agent to reach out directly to a seller that is represented by an agent. A bad real estate agent will continue to reach out until they convince you to meet with them. If a Realtor is reaching out to you directly and you are working with an agent, it means one of two things. Either the agent is knowingly breaking the law or they are incompetent. In either case, you should avoid these agents like the plague.
The best way to deal with bad real estate agents that are breaking the law is to kindly inform them you are working with a broker. Most bad real estate agents with a disregard for the law will already know this but a gentle reminder never hurts. Remember, if an agent has a legitimate buyer, they will schedule a showing using the appropriate methods. They will never reach out to you directly.
Avoid Agents or Brokerages That Charge Upfront Fees
This is usually rare but it does exist. If you approach a brokerage whether a flat fee or traditional, only pay upon successful completion of your home sale. This is plain and simple. If a brokerage is confident in their ability to service their clients appropriately, they will only charge you a fee after your home sells. In real estate, this is the most common and accepted practice.
Charging fees upfront usually indicates that the firm may have had issues with fulfillment in the past and they need payment upfront to prevent you from canceling. Overpromising and under-delivering is notorious in the real estate space. Paying fees upfront leaves you more susceptible to companies or agents with a history of doing this.
Avoid Bad Real Estate Agents with a Poor Track Record
There are over 44,000 real estate licenses in the state of Colorado alone. All 44,000 obviously can’t be the best but all 44,000 are more than likely to tell you that they are. This is one thing that all agents usually have in common. So how do you separate anecdotes from reality? A basic way would be to look at their listing history and active listings. You can usually do this by searching for the agent on Zillow. Bad real estate agents will usually have very few active listings or a poor listing history.
Zillow will show how many recent sales the agent had in the last 12 months. They will also show you how many active listings that a Realtor currently has. As a rule of thumb, you will want to avoid agents that have less than 50 sales in the last 12 months or less than 3-5 active listings. Experience is key when it comes to real estate. The more experienced, the better prepared your agent will be. If you were shopping for an attorney, would you want the most experienced or least experienced? If a surgeon was about to operate on your heart, would you want him to have 1,000 successful surgeries under his belt or 10?
Your home sale should be no different. When you are talking tens of thousands of dollars at stake, choosing an experienced agent can make or break your deal. There is a lot of noise in the real estate world and there are bad real estate agents trying to get to your money. Be patient and objective and don’t settle for a good sales pitch.
Avoid Bad Real Estate Agents that are Lazy
You hire an agent to help find you a home. You’re looking for a home for around $450,000. You find one you love and ask your agent to set up a showing. If you have a lazy real estate agent you may not ever get a shot at seeing that home you fell in love with.
You would think that with almost $15,000 on the line, a real estate agent would do everything in their power to get you into that home. Unfortunately, that is not always the case. A lazy real estate agent will put forth very minimal effort into setting up a showing. If they aren’t able to find it quickly in the MLS, they will usually make up a lie about why they couldn’t get you into the home. The ones that are brazen and lazy will straight up tell you setting up a showing is too difficult.
The truth is, if a home is listed active on the market, an agent can set up a showing with a smidgen above minimal effort. For example, listings in Boulder are usually listed through REColorado or IRES. If an agent is a member of IRES and the listing is syndicated through REColorado, they will not be able to see it in the MLS. A good agent will look up the listing through a site like Zillow or Realtor and reach out directly to the listing agent. A bad agent will do what we previously discussed.
If the listing you want to view is in “Active” or “For Sale” status on a consumer-facing site and your agent can’t set up a showing, chances are you have a lazy real estate agent.
As you can see from the example above, it is never difficult to find the listing agent. If you suspect you have a lazy real estate agent, you can call the listing agent yourself and ask questions. If the home is still available you probably have a good case to part ways with your agent. The Realtor is failing their fiduciary to you. If your agent is too lazy to get you into a home, they will cut other corners during the process. Cutting other corners can cost you serious time and money. If you have a lazy Realtor, break up with them fast. Considering what Realtors are being paid, laziness is never acceptable.
It is always important to spend time and energy finding a good agent if you plan on buying or selling a home. It is just as important (if not more important) to avoid the bad ones.