Try to Resolve Problems With Agent Before Making a Formal Complaint

By Ilyce R. Glink and Samuel J. Tamkin
Saturday, December 6, 2008

Q: I have had a very bad experience with my real estate agent. Please tell me where to go to lay a formal complaint against a real estate brokerage firm.

A: If the real estate brokerage firm has broken the law in some way, you can file a complaint with the agency in your state that regulates real estate agents and brokers. It's usually something like "the Department of Banks and Real Estate."

You can also file complaints with the state attorney general's office and the Better Business Bureau. Finally, you can file a complaint with the National Association of Realtors ethics board -- although it doesn't have the power to do much more than cancel the agent's or broker's membership in the association.

If the agent has done something criminal, such as stealing your identity or forging your signature on papers, you should go to the police department and seek assistance.

If your bad experience was due to a disagreement or the agent's failure to get your property sold, it's possible his or her conduct does not merit a complaint. While there are some bad apples in the real estate industry, buyers and sellers sometimes have unrealistic expectations about what their agent can or should do for them. When these expectations aren't met, the buyer or seller becomes unhappy.

Before you make a complaint, try to resolve the issue by discussing it with the agent or the managing broker in the agent's office. If the differences can't be resolved, then move forward with a formal complaint.

My husband and I are talking to a company about refinancing our home so we can consolidate some bills and make home improvements. The company has indicated that we would be approved for the loan based on the preliminary information we have provided about our income and credit score.

But they said we have to pay $375 upfront for an appraiser they select. Also, we haven't seen anything in writing regarding the terms and conditions of the refinance. How do we go about confirming whether this mortgage lender is credible?

During the recent credit expansion (that would be the one that preceded the credit crisis that we're now suffering through), thousands of folks figured out that the way to earn a quick buck was to pay a licensing fee and hang out a mortgage lender shingle.

That was fine, as long as they knew what they were doing and weren't scam artists. Unfortunately, millions of dollars have been lost to mortgage fraud over the past five years, with more bad news to come, I'm afraid.

To avoid becoming part of those statistics, do a thorough search of your lender before forking over any money. When searching for a credible lender, you should talk to at least a handful of different kinds of companies, including a credit union (if you belong to one or can join one), a well-regarded local mortgage brokerage company (the agent who sold you the house should be able to give you a list of top mortgage brokers the company works with) and a local or big national bank (like Bank of America or Chase) to see what else is being offered. You should also speak with a local savings and loan.

You can do some due diligence on these companies at the Better Business Bureau (http://bbbonline.org) and contact the state to make sure the company you choose is not only licensed to do business in the state but has had no complaints made against it.

One other thing I like to do when researching companies is to go to a news search engine (like http://Google.com/news) and type the company's name into the search box. You should also find out the name of the owner or president of the lending company and type that name in as well. This should bring up any news reports concerning the company or forum threads where the company is discussed.

As far as the upfront fee, $375 for an appraisal sounds a bit high, but depending on where you're located and how pricey your property is and whether it includes the costs for the credit report, it's not too far out of the box. And it's normal to be asked to pay this fee upfront. The lender, not the homeowner, always chooses the appraiser.

But you should get documentation from the lender indicating the type of loan you have applied for as well as other information about the loan process at or before you pay the fee. It would not be unreasonable to ask for this documentation now to determine whether the lender's fees and costs are reasonable and to understand the terms of the loan. The lender, in turn, could tell you that he or she can't process the loan until the fee is paid. Still, you should delay the process until you understand what you are getting into.

Before you start the refinance process, make sure your house will appraise out in value. If it won't, due to local foreclosures or declines in property value, you would be better off waiting.

Talk to a local agent (or the agent that sold you the property) to see what homes in the area have been selling for and to find out what your home is realistically worth. If your home has dropped too far in value relative to the mortgage you carry, you may find it difficult to refinance.

I have several credit cards from the same company. One of these cards charges me a $75 annual fee. I have had this card for many years and am concerned that if I close this card, I'll bring down my credit rating. Can closing an account that I've had open for 20 years hurt my credit score?

Yes. Credit scores evaluate what types of credit you have, how long you've had these accounts and what your payment history has been.

If you've owned a credit card for 20 years and have had an excellent credit history with that card, and then you close it, you can damage your credit score significantly.

Ask the credit card company to change your credit card to a card that doesn't have a fee. Start with the toll-free number to the customer service department. Do not agree to close the account under any circumstances.

If you're not getting anywhere with a customer service person or a supervisor, ask to be transferred to the customer retention department. This department typically has more leeway.

Ilyce R. Glink is an author and nationally syndicated columnist. Samuel J. Tamkin is a real estate lawyer in Chicago. If you have questions for them, write Real Estate Matters Syndicate, P.O. Box 366, Glencoe, Ill. 60022, or contact them through Glink's Web sites, http://www.thinkglink.com and http://www.expertrealestatetips.net.

© 2008 Ilyce R. Glink and Samuel J. Tamkin

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