Real estate agent submitted edited pay stubs

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Real estate agent submitted edited pay stubs

Alison Brenner
Member since 2022 · 79 posts · 72 votes

Hi,

I have a listing. I have been processing applications all week. One applicant is being represented by agent. The agent has been persistent in trying to expedite the screening process, repeated reassuring me that the applicant meets my criteria as written. After prescreening the applicant, I ran credit and discovered that the applicant's college-age son does not meet my credit score requirement due to lack of credit. Because I am in California and had other applicants, it is important that I process all applications and try to find one that meets my criteria before accepting one who doesn't. 

I took a second glance at the applicant's documents yesterday and noticed some oddities in the pay stubs for the first time. For example, the year to date gross pay on the September pay stub is identical to that listed on the November pay stub. The tax deductions are ridiculously low...for example, year to date State income tax deduction is listed as $10.52 on $70K in gross income. The applicant works for a public school district and the likelihood of payroll screwing up to this degree across multiple pay stubs is extremely low.

I need to send rejection letters today and don't have time to contact Fair Housing. What should I do? Stop all communication with agent and communicate directly with applicant? The agent has been my sole contact up until this point. Mention the pay stub inconsistencies to applicant and/or agent? Based on the agent's behavior, my gut instinct says the agent may be doctoring the pay stubs without the applicant's knowledge. Or deny the applicant based on the her son's lower credit score and don't mention the pay stub inconsistencies?

I try to give all real estate professionals in my area the respect and professional courtesy they deserve. This is a little frustrating. Thank you for your help.

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  • Kevin Sobilo
    Realtor · Hanover Twp, PA · Member since 2018 · 3k+ posts · 3k+ votes
    9mo

    @Alison Brenner, I personally doubt the agent is the one doctoring the pay stubs. I just had an applicant do exactly as you describe a couple months ago. An agent has too much to lose and too little to gain for that to be a temptation for them. 

    What I would do is talk to the agent and confront them with the clearly fraudulent documents. 

    Then I would follow up by contacting the broker of record for that office. Basically they are the agents manager/supervisor. If they know the client is shady, they will be motivated to make sure none of their agents represent that person going forward to avoid liability. 

    If you REALLY believe the agent is shady, contact the local board of realtors and file a complaint. Even if it cannot be substantiated, if someone else has a problem with that agent in the future they may contact you can establish a pattern especially if they foolishly continue to represent this client. 

    My guess is that simply talking to the agent and their broker is enough. I bet they drop that client like a hot potato. 

    4Reply
  • Alison Brenner
    OP
    Member since 2022 · 79 posts · 72 votes
    9mo

    Hi Kevin,

    Thank you for your response. I don't "really believe" and definitely don't want to believe that the agent was involved. I just found the agent's behavior to be bizarre and do suspect she knows what's going on. It's a gut instinct, which is not a basis for reporting the agent. 

    I will send the agent an email suggesting that carefully review the applicant's pay stubs. Thank you very much for your help.

    1Reply
  • James JonesPro Member
    Investor · Collierville, TN 38017 · Member since 2017 · 663 posts · 476 votes
    9mo

    You’re right to slow this down. In California, process and documentation matter more than gut instinct.

    A few clear principles to keep you protected:

    Stick to your written criteria. Period.

    If the household does not meet your published screening standards, you can deny based on that alone. You do not need to justify beyond the criteria that was not met.

    Do not speculate or accuse.

    Even if the pay stubs look off, do not accuse the agent or applicant of fraud. That creates unnecessary liability. You are not required to investigate intent.

    Use the cleanest denial reason available.

    If the son’s credit does not meet your minimum requirement and he is part of the household, that is a legitimate, objective basis for denial. Use that.

    Less explanation is safer here.

    Issue a standard adverse action notice.

    If credit was run, send the adverse action notice as required. Keep it factual and neutral. No commentary.

    Do not change communication channels midstream.

    If the agent has been the point of contact, respond through the agent. Abruptly cutting them out can escalate things unnecessarily.

    Do not mention the pay stub inconsistencies in the denial.

    If you cannot verify income to your satisfaction, that is another valid reason, but once again, you don’t need to explain how or why it raised concerns.

    Your job here is not to “prove” anything.

    Your job is to apply criteria consistently and document that you did.

    California landlords get into trouble when they over-explain, over-communicate, or editorialize decisions. A short, objective denial tied to written criteria is the safest path.

    Frustrating situation, but you’re handling it the right way by slowing down instead of rushing.

    1Reply
  • Alison Brenner
    OP
    Member since 2022 · 79 posts · 72 votes
    9mo

    Thank you @James Jones for the sound advice. I just saw your response. I basically followed your instructions with the exception of "changing communication channels." I had had zero contact with the applicants during this entire process. The agent was my only point of contact. Since we are required to send copies of credit reports along with the adverse action documentation, I felt it was "safer" to email the documentation to the applicants rather than continue communicating through the agent. Maybe this was a mistake. I don't own the kind of properties that attract agents, and working with an agent during the screening process was a first for me.

    0Reply
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