Don’t trust anyone in real estate
It may sound harsh, but if you’re buying a home, or selling one, I have one piece of advice for you: Don’t trust anyone in the real estate business who’s supposed to be looking out for you.
In the end, there’s only one person you can count on, yourself.
Don’t believe me? Then read this story in the Chicago Tribune. American Escrow LLC suddenly went out of business last month. Problem is, the company is an escrow firm, meaning that it collects payments from homeowners to cover their property taxes and insurance bills. Most homeowners elect to have an escrow firm make these tax payments. It’s easier to pay property tax bills in small increments over time — which is what happens with an escrow system — than it is to pay that $4,000 tax bill all at once.
But homeowners who used American Escrow to handle their tax payments are now wondering where their money went. According to the Chicago Tribune story, the situation has made some consumers delinquent on their tax and insurance bills.
The whole story here has yet to play out. But I have a suspicion that until this story appeared in the newspaper, homeowners were receiving little help from their real estate agents, real estate attorneys or mortgage lenders. That’s because when something goes wrong, these professionals, who earn good money whenever a home is sold, like to pass the buck onto something else.
For instance, you’ll call your real estate agent and ask, “Where is my escrow money now that this sham firm American Escrow has gone out of business?” Your agent will say he has no idea and refer you to your mortgage loan officer. You’ll call your loan officer and she’ll also have no idea. Perhaps she’ll recommend that you call your real estate attorney. And on it goes.
This happened to me and my wife on a much more limited scale. We bought our current home three years ago. During the first big rain storm of the spring, our basement flooded. It’s since flooded three more times, once fairly severely. The sellers did not disclose any water problems.
So we went to our agent who referred us back to our home inspector. Our home inspector told us there’s no way he could have known that our basement had a tendency to flood. After all, he said, the weather was dry the day he did our inspection. We went to our real estate attorney who told us that suing the home’s previous owners probably wasn’t worth it. It’s hard to prove that the basement ever flooded in the eight years they owned the home, never mind that it’s flood four time in three years with us.
So we gave up. We’re resigned to live with the flooding until we decide to pony up the big bucks it’ll cost us to waterproof our basement.
The point us, the real estate professionals we paid did not come through for us when we needed them. And I’m sure we are far from alone.
