Note: This article was written over two years ago on February 2, 2008, but given the recent turn of events we thought it appropriate to kick it back to the top! So for over two years…we’ve been warning agents…unbelievably they did not listen.

Time and time again, I keep reading the above-referenced headline in email after email sent to me by the obviously inexperienced, unqualified, unprofessional and completely oblivious real estate agent.

In this foreclosure explosion there has been the seemingly overnight proliferation of the so-called “short sale expert”. There are literally scores of real estate agents, with little or no experience, actually lying to their clients and posturing to the client as if they indeed had the requisite knowledge to properly handle a short sale transaction.

The local real estate boards and many brokerages have been complicit in this activity by hosting the most cursory and topical meetings imaginable, and subsequent to, sending their agents out into the field pretending to be short sale specialists.

Ever wonder why the credibility and prestige of real estate agents is so measurably low? Using your clientele as guinea pigs for your own amusement might be one of the reasons.

How many of these so called newly dubbed short sale experts told their clients that they descended upon that they have had no practical experience in the field? How many of these imposters actually told their client that they have never successfully completed a short sale and were going to try it out on their property?

These freshly anointed short sale experts armed with new business cards showing their new specialization might just end up being the next wave of real estate agents to find themselves on the other end of a misrepresentation lawsuit.

Take the case of this one young man I recently read about. This neophyte had the bold-faced audacity to write a post recently on Active Rain wherein he actually admits to the AR community that he used and compromised a homeowner’s position as a “learning experience”! Is this working in the best interests of the client? (update April 9, 2010…as you will see, Active Rain has removed the post lest the idiot agent be put in too much of a position of liability…but we know who he is…and we’ll be following up with him!)

Amazingly while some commented as to how hard it is for some agents to earn a commission on a short sale, no one chastised him for his actions. Well one person did and the author promptly deleted the post calling him on his actions…twice! He actually deleted it twice so there would appear to be no criticism for his action. Perhaps there were indeed more who stood up against this malfeasance and apparently fraudulent representation, who knows if they met the same fate.

The recent lawsuit involving the Ummel’s in California alerted and cautioned the consumer as to blindly believing or trusting a real estate agent. In fact we were admonished by the defendant’s in the case to “perform our own due diligence”. We are additionally told that we need to be savvy in our real estate transactions and not to just accept any information an agent provides us.

Are we now expected to know that in addition to performing our own due diligence that we also should not believe an agent when they say they are an expert in a niche of the business? I guess what is turning out to be the rule is not to believe ANYTHING a real estate agent says. And if we do, it’s our fault.

I don’t think that will hold up in Court. I think hundreds, maybe thousands of agents may end up in Court being sued by homeowners who trusted that they actually knew how to execute a short sale. I think you can see that advertisement now…

“Were you in foreclosure recently? Did a real estate agent approach you saying they were a short sale expert? Did you end up having your home foreclosed anyway and auctioned off? Well give us a call. You may be entitled to monetary damages. We’ll sue your agent and get you the money you deserve!”

If you took a short sale listing without any experience and allowed the homeowner to be duped by not disclosing your inexperience and allowing their home to be auctioned off it is not going to be hard to prove your ineptitude.

We recently ran a report in the local MLS here and found over 75% of the properties in foreclosure that were represented in the MLS as potential short sales, ended up being auctioned off anyway. Many were lost after the agents turned down offers from investors to buy the properties and negotiate on their own.

We also have been contacted by many attorneys who are diligently working to determine agent culpability. In obtaining this information they are looking to the level of experience the agent represented to the client and how the client was harmed by the agent’s incompetence. The results were more than compelling. They could also be cause for many, many lawsuits.

Here are some of the things we found that were misrepresented and completely adverse to the homeowner’s best interest:

1. Agents representing themselves in print and online as short sale experts without ever previously completing a short sale transaction.

2. Agents not informing their clients that they were indeed not experts and in fact never successful in a short sale transaction

3. In an extremely time sensitive transaction, Agents not returning phone calls or summarily dismissing offers without ever submitting them to the homeowner or understanding the complexity of the transaction.

4. Agents not having the requisite skills, knowledge or historical experience to properly package, submit and negotiate with the Client’s lenders on behalf of the Seller and prospective Buyer.

5. Agents sending offers to the bank for approval when the bank is not the owner of the property. Did you actually tell the client that the bank would choose what offer they should accept?

The bank would have to agree to accept a discount on their payoff which would allow the sale to close, but in no instance, are they Party to the contract. Since they are not Party to the Contract just how did you give them authority OVER the homeowner to instruct you as to what offers to accept or decline?

Let me guess, you asked your broker or someone in your office if that is what you should do or your broker demanded that you do a short sale in that manner. I guess you weren’t the expert after all. An interesting question is was your broker an expert?

I can see attorneys licking their chops already. Didn’t anybody think about the ramifications of hordes of commission hungry agents running haphazardly across the Country feeling duly deputized by their brokers as short sale experts with little or no experience in that type of transaction?

We have recently spoken with MANY attorneys who are looking into this and finding and determining that this could indeed be a breach of fiduciary responsibility and a cause of action for substantial damages.

If you thought the Ummel case opened the door of litigation against real estate agents, I think we may see a legal tsunami once the ineptitude of the “short sale expert” is brought to light.

It will not be hard to prove damages and there will be overwhelming information that can be discovered via subpoena and otherwise.

If you were guilty of violating your fiduciary role as the agent working on behalf of the Seller by advertising yourself as a short sale expert when you indeed were not, you might want to might want to speak with a good attorney.

And for Pete’s sake, don’t you know people can read what you write on AR and other Internet websites and blogs?

You’re making things too easy for the lawyers to give you one of “life’s lessons“.

Hey Short Sale Expert…Do You Have A Good Lawyer?  … However, that may be a matter for you to collect upon outside the transaction in your own lawsuit. In the short sale transaction you may …