Agent scammed us at the auction

34 Replies

We have had many people laugh at us when we told about this. 

We had an agent who would send us some properties he thought were good buys from listings on FMLS. He accompanied us to the auction on 11/07. At the auction he said he has registered as a sellers agent and would charge us 5% commission.  This should tell us we are novice folks and trust people easy. Any how we didn't buy anything from the list of properties that were from auction.com. We ended up purchasing a property from one of the other callers and I called the numbers and we got ahead in the bid. We gave this dude 5K (2K cash + 3K check) as he said he worked all these days and hasn't made any money and he could really use it and we could treat this as commission.  We learnt yesterday evening that the property we got was reinstated and it is an invalid sale.  I told him to return the money back and we blocked the check.  He isn't ready to give the 2K back. What should be the recourse? We want to file a suit against the agent..

I was at the Cobb auction yesterday. He took you for a ride. 

Call his broker/real estate board. He is using what you gave him as a free commission. 

First off, it is illegal for him to take cash from you. It has to go through his broker. He can lose his license for that. 

It sounds like it is now a legal matter, and it would be to your benefit to reach out to an attorney for a proper consultation. A local attorney would be best fit to disclose all of your rights under Georgia law. 

Unfortunately, sometimes we have to learn the hard way (god knows I have). Maybe consider qualifying and bidding on your own in the future. We all learn as we go, so don't be shy. Get out there! :) 

@Basu G. You don't need a lawyer - yet.

I would call his broker and explain that your next two calls after talking with him will be to your attorney and then to the real estate board - unless he gets your cash returned TODAY.

If necessary, remind him that his E&O policy probably doesn't cover fraud.

I don't know about Georgia, but I suspect that they're like Mass. in that mishandling client funds is about the worst thing you can do - and a very fast way to lose your license.

Charlie MacPherson, Real Estate Agent in MA (#9532146)

I told him as a reasonable person - I wouldn't mind still giving you 1K for being there , but I can't pay you for a transaction that didn't go through.  To be honest, this particular property we bid on - this dude had not done any research, we looked county records,  zillow and other tools and ended up buying it. I did the bidding and not sure why we had to pay money. You know how much he asked us ? 5% commission - and said that is the standard at the auction. Today when we went to the attorneys to collect the check (for invalid sale), they laughed at us - saying wish they had this job, where they can come and make 5K for sitting there.

@Basu G. You need to get ALL of your money back and find another agent.  Pronto.  You don't owe him a cent, unless you signed a contract that says otherwise.

I'd bet that there are investor-friendly agents here on BP in Marietta.

Charlie MacPherson, Real Estate Agent in MA (#9532146)

I remember seeing you :) . 

Thanks. Looks like there are many to take advantage of. We will pursue this just for the heck of it. 

He says that agent doesn't care if a transaction doesn't go through - once the sale his done, his job is done ? (Auction is wrong example), but is that true in case of regular transactions ?  

Originally posted by @Patrick Miller :

I was at the Cobb auction yesterday. He took you for a ride. 

Call his broker/real estate board. He is using what you gave him as a free commission. 

First off, it is illegal for him to take cash from you. It has to go through his broker. He can lose his license for that. 

Our team is licensed here in Marietta, and was at the same auction as yesterday. 

Get your full refund. 

He broke the license law by accepting cash. That will get your license taken quicker than anything. 

@Basu G.

Auction.com has lunch and learns lunches at the Fulton and Dekalb court house locations.  Not sure how you can find out where exactly off the auction.com site...   In Dekalb they consistently have free lunch (12 noon) at Cakes and Ale on the Decatur square.

This is also why everyone needs to be in a local REIA. The locals, who do deals are who you need to learn from. I love BP, but you need to be in a REIA IMHO. I chose GaREIA after being a member of them all. I chose GaREIA because they had the most experienced folks and are the only non-profit. All other REI orgs (besides BP) are for profit. Yes GaREIA has selling speakers, everyone has to pay rent and power bills.

I've bought maybe 14 properties off auction.com REO side (on line auctions) not the live / trustee auctions. I buy and hold. You can find my talk I gave at a past auction.com event on how to buy Bullet Proof Rentals off my profile, down on the right, an uploaded file.

I suggest staying away from 1st Tue trustee court house auctions and find other ways to find good deals.  The hedge funds are still bidding trustee auctions up too high, hard to find good deals.  The worst scenario is at the trustee auction, no one bids, the naive new bidder things AH a deal, and bids and wins, it was actually junk that the pro's knew not to bid... Toooooo many ways to get screwed.  Just my views.  Y'all are welcome to your own views.  

Best of luck.

Curt Smith

    @Charlie MacPherson - I will call their brokerage tomorrow about this. If the brokerage doesn't straighten this up, I will take up with the state commission, followed by a suit. It is not big money, but I guess some one should teach these folks a lesson.

    He says he worked very hard for the last month to get us deals. You can't buy just because he did some research. Most of them we had to rebuff - because they were garbage. Ones we liked, we couldn't get probably because we weren't the best offer. Don't agents get paid for the sales they do ? It is nothing new that unless you close a deal, you don't get paid... 

    @Basu G.   I'm not impressed by his "hard work" for a whole month.  

    Last year, I had a buyer who could just barely afford the entry level price point.  Anything less expensive wouldn't pass appraisal due to repairs needed.

    It was an extremely competitive market and  we were outbid 11 times in a row.

    I worked with him for 19 months and finally got him a newly renovated home that was perfect for him and his wife.  They were THRILLED - and so was I.

    It wasn't exactly charity work, but at that price point, I didn't make a lot.  

    As Bill Belichick says, "do your job".

    Charlie MacPherson, Real Estate Agent in MA (#9532146)

    There are bidding services out our way.... and some of them are brokerages and they do take a commission on a successful transaction.. they are also lenders and put up 80% of the cash you only need 20%... 

    but they also follow and track them all for U do the title search's etc.. kind of like turnkey for courthouse steps bidding

    @Curt Smith   we do pretty good in certain markets with auction.com ... what I like about them is the 2,500 to bid  ( we don't pay that because of our volume) and larger or larger EM.. this keeps the wanna be no money wholesalers from mucking up our deals  :)  We deal with Emily if you have ever talked to her sweet sweet young lady.

    Auction.com doesn’t charge a $2500 to bid here in Georgia. 

    They did just do a rebrand here and are doing anything to get as many people out as possible. @Jay Hinrichs

    "I still wouldn't mind giving you $1000.00 for being there". For being there to rip you off? Forget it. I agree with @Charlie MacPherson , don't give him a single penny. There are good people that will be honest and take good care of you. Especially on Biggerpockets. You work hard for your money. Be a Pitbull when someone tries to rip you off!

    Daniel F. Harb

      I agree with others here. You need to get all your money back. In Colorado, mishandling a clients money like this will not only get your license revoked, it will also get you a felony charge.

      @Patrick Miller   we are talking different auctions your talking the first Tuesday auction.. I am talking when you go on line and bid from their site.. in those instances you need to pay 2500 to register unless until you prove your buying VERY frequently then they will waive that..  So the wholesaler types that try to middle man properties will little to no money just wont' take the time and put up the 2500.. plus then its usually 10% EM of the bid amount .. so many times you will have 7500 to 10k non refundable in when you win a bid.  And you know how that sits with the wholesalers communities.

      I have bought a lot of court house step in GA  ( Henry county).. so I understand its just like out our way you show up with your cashiers cheques and anyone can bid.. I knew I was in trouble when I saw 20 somethings with a back pack full of cashiers cheques ( hedgefund bidder)  they kicked us to the curb so I quit in that state a few years back.. I suspect its gotten a little easier now for the smaller bidder to get some properties.. but for a time when they first came in.. they literally bid stuff up to almost double what I had been paying.. I bought 54 homes in a little less than 10 months.. then stabilized them all and sold them YES to a hedge fund made a tidy profit and left the state.

      100% Illegal what he is doing! Contact your state real estate commission board and file a complaint!! This guy needs his license taken away!

      This guy didn't earn the money, It sounds like he broke the laws. He needs to change profession IMO. Let us know how this works out. Personally, I would file with the RE commission. This wasn't an accident, he sounds desperate, and doesn't sound like he will be any benefit to the public.

      John Thedford, Real Estate Agent in FL (#BK3098153)

      He ( BP pro member, not sure if he still is) thought we were some push overs and tried to bully us - saying he will sue us for blocking check and all. After I mentioned that he will loose his license for what he has done and we are going to complain to the state commission and sue him for this, he tried to threaten us "sounding more like physical harm - you will regret the day you called me" . We told one more threat and he will have to deal with police complaint other than lawyers. After couple of hours, he is now trying to make amends and telling how much he needs the money and all.  We told we are reasonable people can pay him a grand and nothing more. We am hoping we are the first ones that he has taken for a ride. We don't want to rob some one of their livelihood - but if it gets to it, we wouldn't hesitate to follow it through the end. Thank you all for your advice - it reaffirmed that we weren't at fault on this.

      Don't pay him anything. He blatantly violated one of the most sacred laws in real estate, and should not be in the industry. Anyone who does this type of thing and then threatens you needs to be removed from doing real estate. He is a predator and letting him remain in the industry puts other people at risk for being abused. And those others might not have the resources you do or know to look for help in making this joker back down.

      Originally posted by @Basu G. :

      He ( BP pro member, not sure if he still is) thought we were some push overs and tried to bully us - saying he will sue us for blocking check and all. After I mentioned that he will loose his license for what he has done and we are going to complain to the state commission and sue him for this, he tried to threaten us "sounding more like physical harm - you will regret the day you called me" . We told one more threat and he will have to deal with police complaint other than lawyers. After couple of hours, he is now trying to make amends and telling how much he needs the money and all.  We told we are reasonable people can pay him a grand and nothing more. We am hoping we are the first ones that he has taken for a ride. We don't want to rob some one of their livelihood - but if it gets to it, we wouldn't hesitate to follow it through the end. Thank you all for your advice - it reaffirmed that we weren't at fault on this.

       IMO he should not be a licensee. BTW, if our laws are similar, which I suspect they are, all commissions MUST flow through the broker. This guy is not only a danger to the public, but to his broker if our laws are similar. In FL, the broker is responsible for the actions of their agents. IMO you are NOT robbing the guy. On top of that, the implicated threats are WAY out of line. I would go straight to his broker...and never think twice about it. He could always go into "wholesaling" LOL.

      John Thedford, Real Estate Agent in FL (#BK3098153)

      Alot of good advice so far.  There are a few components to sort through, so I thought I would just add a couple of thoughts...

      Auction.com is here in AZ as well.  They charge a $10K non-refundable deposit for any winning bids.  I have been to alot of them, and have gone through the bidding process and have completed the sale.  All that just to say I have experience with Auction.com and they seem to be a pretty reputable business...at least here in AZ.

      I DO know that on all of their contracts, within the "fine print", there is a reinstatement clause which covers their butt in the event that the owner has somehow reinstated their loan with the lender, or filed bankruptcy to halt the sale, or SOMETHING to legally halt the sale.  It's not exclusive the auction.com.  It's that way with all trustee sales. 

      Regarding the agent/helper that assisted you....was he an actual Realtor?  Many of these trustee sale guys aren't licensed, but they go to these things all the time and know the system, so they offer assistance to people who aren't comfortable with the process.  They get paid by the Buyer for their assistance.  Sometimes that is in the way of a flat fee for their time and research beforehand, as well as their expertise in bidding and advising you in how high to bid.  Many of them require payment for that help regardless of whether your purchase comes to fruition or not.  The rationale is that if they spent the few hours at the auction with you and the time beforehand to research properties, that time is valuable and should be paid for, regardless of the outcome that is out of their control (being outbid, etc).

      IF this person IS a licensed Realtor...WHOA!  This is super illegal.  My guess is that 1 call to his broker will solve this problem right away.  Between the betrayal the broker will feel in his wallet, and the liability that this agent has brought on to the broker's business, I would be SHOCKED if you had to go any further than the broker as it will be HIS business impacted by an legal action, along with the agent.

      Now, on a side note, you mentioned that you signed some type of agreement with this guy beforehand.  I would want to know what those terms were to accurately determine whether or not he is entitled to any funds from you.  The agreement should accurately define how he would be entitled to a fee and/or commission from you.  Make sure you have that in front of you when you call the broker.

      Please don't let this experience sour you toward Realtors OR Trustee sales.  It sounds like you found a bad seed, but in general, Realtors are a great tool and resource to guide you through this process.  As a 20+ year Realtor here in AZ, it breaks my heart when I hear about these kinds of experiences.  That is never how it should go.

      Best of luck to you!

      @Cara Lonsdale - Thanks for your inputs. Yes he is a licensed real estate agent with AC brokerage. I haven't signed any agreement with him. I found him through BP and his BIO on here is pretty impressive (may be he was a hot shot once , doesn't look like that any more). We started interacting around Oct 6 - we have some paper deals come our way - out of which 80% were worthless. I really can't compensate some one for sending across Junk. We did put offer on a couple - with all cash , 5 days closing, but i guess we got outbid. We told him the only way we will do anything is - at the minimum there should be no loss of invested capital - so no speculation. Now this whole auction thing was something we came up with. There was no discussion as to what we would pay to him or any of that prior to going to auction. We had a particular property in mind when we went there - as we had seen the property before hand and we couldn't get it worked out with the bank because of shortage of time.  This property was also something this agent didn't want us to buy as he didn't like it. I live in the area and now how hot it is and every one I talked to went gaga about it. The day we went to the auction - I went to register at auction.com desk and he said he already has registered on our behalf. He said we would pay 5% commission. He probably saw the expression on my face (WTF ??) ... and much against my partners wishes we agreed on 5K for the first deal as commission. I do recognize he needs money to keep himself afloat and looked like he hardly had any clients. I think it comes back to bite you when you pity people. He said he worked exclusively for us (we didn't ask for it nor did he mention it to us. If he had said that, we wouldn't have worked with him any way). On asking if we are the only clients he has, he blabbered. We didn't get the property for which we came for , but ended up getting some thing else - for which all of the valuation was done by us. He had no role in it - other than saying that area of Smyrna is awesome ! As agreed verbally we paid him 5K (2K cash and 3K check) all made out to himself as individual and not brokerage. We then go to the property (me and my partner) - to find out that it has been reinstated. We told him about it and I was willing to pay 1K to him for being there, but 5K is like paying an attorney by the hour. I wish I had that job :)

      @Basu G. tough situation. I don't know the realtor legalities, but it sounds like as reluctant as you were originally to pay him $5000, you did agree. The deal happened, yet in the end the deal didn't finalize. I see both sides, however I lean your way... he is probably doing something "wrong", he didn't really earn $5000 as it seems you found the deal, vetted the deal, went to the auction and bid on the deal. Had he done all that while you sat home, gen has some ground to stand on... but that's not not what's happened. Other than agreeing to pay him, he is owed nothing (IMO).

      Would be interesting to have him chime in. If you found him on this site, I imagine he visits and probably saw this thread!

      Don't give this guy a frickin dime !!! He will only do it to the next guy.....and guess what?....you are probably "the next guy" for someone else...... no way I would let this guy keep a dime f my $$...in fact he should be paying me....

      Ned Jackson

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