Tag: Inman News

Have You Wondered About 72Sold? It’s Not Licensed as a Real Estate Brokerage in Colorado

Perhaps, like me, you have wondered about 72Sold, which runs commercials every night on local TV stations, giving the impression that it is a Colorado real estate brokerage, and directing you to www.72Sold.com, which gives the same impression.

In researching this company, the first thing I did was to look on REcolorado.com, the Denver MLS, to see how many listings they have sold. The answer was none, because 72Sold is not a member of the MLS and is not even licensed in Colorado to sell real estate.

So what’s the story? First I asked Marcia Waters, director of the Colorado Division of Real Estate, who confirmed that 72Sold is not licensed in Colorado, and said the division has not received any complaints about them — which makes sense, since one can only file a complaint against a licensed brokerage.

My suspicions about 72Sold were raised further as I scanned the company’s website, which contains numerous testimonials and the following graphic, which has no identification of, or links to, the “five independent studies” cited in it:

To learn more, I posed as a potential seller and requested a valuation on 72Sold’s website, which uses such terminology as “a better way to sell your home.” That sure sounds like a brokerage, doesn’t it?

Registering my name and a home address on their website resulted in a call from a woman who said she was from 72Sold but who, under questioning, said she was actually with Your Castle Realty, a non-Realtor brokerage. So as not to blow my cover, I used the excuse that I only wanted to work with a Realtor, and she offered to have an agent from Keller Williams call me.

Susan Thayer, co-owner with her husband of Keller Williams Action Realty in Castle Rock, was the agent who called me next. I revealed to her that I was actually a Realtor myself writing this real estate column. I explained that posing as a seller on 72Sold’s website was the only way I could find out what was really behind all those TV commercials.

Susan was quite open and helpful and sent me links with background information, including an Inman News article about 72Sold’s partnership with Keller Williams and its many franchises.

Like 72Sold’s website, the Inman story conflated the roles of a lead generating company and a real estate brokerage, reporting, for example, that 72Sold had grown from 10 agents to 426 agents (as of August 2022), when in fact they only have licensed agents in Arizona, where they are a licensed brokerage.  Everywhere else, as I understand it, they have what should be called “referral partners” instead of agents.

What 72Sold does is invest 80% of its referral fee income (according to the Inman story) into more TV advertising in those markets where it has referral partners, and some of that expense is apparently shared by those referral partners, although I didn’t garner any specific numbers.

What 72Sold offers through its referral partners is a strategy of combining a 7-day coming soon period with a Friday-to-Sunday active period during which buyers’ agents may show the home for 15 minutes on Saturday, according to the Inman article. The idea is to create a buyer frenzy and “fear of loss.” With the slowing of the market, that strategy has softened. It sounds great to sellers, however, making the leads generated well worth 72Sold’s referral fee.

Click on the thumbnail below to watch a video from 72Sold’s home page. Judge for yourself whether they are posing as a brokerage in Colorado, where you just watched their TV ad.

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PS: It is a violation of the Realtor Code of Ethics for a member to misrepresent himself or his level of success, but neither Greg Hague nor his Arizona brokerage is a member of the National Association of Realtors, and therefore neither is bound to the Code of Ethics.

Agents Who Submit ‘Love Letters’ Risk Committing a Fair Housing Violation

Until recently it was a common practice for buyers’ agents to submit a “love letter” with their offers, hoping to convince the seller to choose their buyer over others in a bidding war.

That practice has fallen out of favor, however, as doing so might constitute a violation of federal Fair Housing rules as well as of the Realtor Code of Ethics.

Article 10 of the Code includes the following: “Realtors shall not be parties to any plan or agreement to discriminate against a person or persons on the basis of race, color, religion, sex, handicap, familial status, national origin, sexual orientation, or gender identity.” Such discrimination is also a state and federal fair housing crime.

It would be hard not to reveal any of the above characteristics in a “love letter,” especially if it contains a photo of the buyer or buyer’s family. But there are other subtleties to consider. One of the sessions at last month’s National Association of Realtors conference was titled, “How to Stay Out of Trouble: Risk Management and the Code of Ethics,” taught by Barbara Betts, a California Realtor who is also a hearing officer for violations of the Code of Ethics.

In her talk, as reported by Inman News, Betts described how risky such letters could be, especially for the seller and listing agent. “Sellers are humans. Even though they are not purposely trying to create a fair housing situation for themselves, they inadvertently are,” she said. “When the seller gets these letters, they get excited to sell the home to someone they feel will fit into their neighborhood, and that’s where there’s a problem.”

The danger is intensified when there are competing love letters. Imagine, for example, that one of the buyers reveals himself to be a single African American who says your home is perfect for him because he is wheelchair-bound, but your seller chose a family with children who liked your home because it’s close to their synagogue. That choice has offered a veritable smorgasbord of fair housing violations that the rejected buyer could mention in a fair housing complaint, and that their broker could cite in a Code of Ethics complaint against the listing agent.

“We need to consider raising fair housing concerns with our buyers,” Betts advises her fellow Realtors. “Don’t read or accept these letters that are drafted by a buyer. Certainly do not give any support or suggestions. As listing agents, we definitely need to discuss the potential liability during the listing interview and not deliver or accept these letters for the seller.”

Betts added, “If the letter is all about ‘I love your home. It’s beautiful. I love how you’ve remodeled it, I promise I won’t tear it down and remodel it,’ there aren’t any fair housing violations in those statements. The second you start talking about family, color, race, religion, marital status, those things instantly become possible fair housing violations.”

For all these reasons, the agents at Golden Real Estate no longer submit or accept “love letters” from buyers. If we receive one, it’s best that we don’t even read it and that we inform the buyer’s agent that we have deleted it.

There are other ways in which Realtors can commit a fair housing violation, perhaps unconsciously. One is the practice known as “steering,” in which an agent recommends different neighborhoods to different buyers based on where they would “fit in” because of their race, color or religion. We must truly be blind to such characteristics and give the same information to all buyers. Fortunately, buyers do their own searching most of the time. As agents, we must show any buyer what they want to see without comment of any kind.

When a buyer from out of town asks us to describe our neighborhoods, it’s best to avoid all demographic descriptions, limiting ourselves to describing the housing stock, price range, etc. We must not provide such information with an intention to steer them based on their profile.

Meanwhile, sellers expect us to show their homes only to qualified buyers, but if we ask some buyers but not others to be pre-qualified by a trusted lender before showing a listing, we open ourselves to possible fair housing complaints.

We’d all like to believe that racism and other kinds of systemic or cultural discrimination are artifacts of the past, but we are more aware than ever that such discrimination exists even within ourselves, hopefully unconsciously. Unconscious or not, we need to realize that beyond being morally wrong, it can get us into serious professional trouble as agents and that it can also put our clients at risk, making it more important than ever that we educate our clients about the risks they could be facing.