Investigation of Realtors

This Report from Consumer Reporter Susan Wornick aired 31-March-1997

 When looking for a new home .. Realtors act as your guide .. showing you possibilities .. in some cases even helping you get a mortgage.

 They're usually very accommodating .. even solicitous .. but despite their friendliness .. they're not working for you .. and they're suppose to tell you that. Consumer Reporter Susan Wornick joins us now with a new report showing many don't.

 The Real Estate agent's commission is based on the sale .. so it behooves him or her to get the highest possible price. According to state law .. Realtors are suppose to disclose it up front But in an undercover investigation, the Executive Office of Consumer Affairs discovered .. it isn't happening.

 MICHAEL DUFFY, SEC. EX. OFFICE OF CONSUMER AFFAIRS

"IN NONE OF THE TESTS THAT WE DID WAS
ANY DISCLOSURE GIVEN AS REQUIRED BY LAW."

 Undercover state investigators visited 45 real estate offices in the greater Boston area and at the Cape.. They found that NONE of them revealed they were working for the seller. Even the investigators were surprised.

 ELLEN CASSIDY / INVESTIGATOR

"I WENT TO A PHONE BOOTH AND CALLED THE OFFICE
AND I SAID AM I DOING SOMETHING WRONG HERE
AND SHE STARTED LAUGHING AND SHE SAID NO ..
YOU'RE DOING THE RIGHT THING .. THEY'RE NOT DOING THE RIGHT THING."

 A Realtor's commission is based on the selling price of the property .. the more money you spend .. the more money they make. State law mandates that Realtors tell you and have you sign a disclosure form to avoid a conflict of interest.

 DUFFY

"IT'S KIND OF LIKE A MIRANDA WARNING ..
THAT ANYTHING YOU SAY CAN AND WILL BE USED AGAINST YOU."

 But the industry claims the law is unclear .. and they doubt the survey.

 ROBERT NASH, EX. V.P. MASS. ASSOC. OF REALTORS

 "WE'RE GOING TO HAVE TO KNOW EXACTLY WHAT QUESTIONS
THE INVESTIGATORS ASKED OF EACH OF THE AGENTS ..
WE'RE GOING TO HAVE TO FIND OUT IF THE SPIRIT
OF THE REGULATIONS WERE VIOLATED OR
IF THEY WERE ACTUAL VIOLATIONS OF INTENT TO NON-DISCLOSE."

 But even Nash admits .. the study is a necessary educational tool in the process of buying and selling a house.

"IT POINTS OUT THE NEED FOR ADDITIONAL EDUCATION
IN THE FIELD NOT ONLY BY ASSOCIATIONS .. BY AGENTS
THEMSELVES .. BY PRINCIPALS .. BUT ALSO BY I THINK
OUR REGULATORY AGENCIES OF THE STATE GOVERNMENT."

 The state is giving the offending Realtors the benefit of the doubt .. accepting their defense that they didn't realize they were violating the law .. But a recurrence will mean fines .. even license revocations. Another thing you should know .. you CAN get an agent to represent YOU in a real estate deal .. So-called Buyers' Brokers are becoming increasingly popular .. and are listed in the yellow pages in the Real Estate section.

Buyer Beware
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