PORTLAND, Ore. (KOIN) — A disabled Vietnam War veteran has nowhere to call home after his Realtor sold his house for just a fraction of what it was worth.
The sale happened in the middle of Portland’s hot real estate market, where buyers are often in bidding wars, which is great news for sellers. But not for this seller.
Pocket listing means they wouldn’t list the house on the regional multiple listing service, or RMLS.
In Roger Slade’s case, the sales technique his Realtor used — known in the industry as a “pocket listing” — eliminated much of the competition.
KOIN first encountered Slade’s former property on SW 33rd Ave in Multnomah Village when the new land owner was cutting down an iconic 80-foot, century-old cedar tree in order to split the lot.
At the time, neighbors protested the tree removal.
“They’re going to build two $800,000 dollar houses on it,” Betsy Langton told KOIN 6 News in July, “Keep the money flowing.”
“Succumbing to the pressure to maximize every square foot for real estate,” said neighbor Gordon Campbell.
Google’s Street View still shows the house Slade grew up and raised his family in before it was demolished several months ago.
Slade had to sell the house because he was in financial trouble. He turned to a family friend, Realtor Nick Bodeman for help. Bodeman works at Oregon First Real Estate and recommended they do the pocket listing.
Pocket listing means they wouldn’t list the house on the regional multiple listing service, or RMLS. The RMLS is the standard way real estate agents tell other realtors and the world about their properties.
Statements from Nick Bodeman and Renaissance Homes at the bottom of this article
Without advertising the property, Bodeman found a cash buyer quickly. In an email to Slade’s ex-wife Peggy, who is still friendly with him and helped with the sale, Bodeman wrote, “I think that $185,000 is a very fair purchase price and allows you to get out of there quickly without putting another dollar into it.”
The deal closed on February 24 2016 to a buyer named Ronald Layton. Sixteen days later, Layton – who paid $185,000 — sold it for $450,000 to well-known developer Renaissance Homes.
“We contacted [Bodeman] as soon as we found out it was sold for such a high price and asked why and he just said ‘I am sorry. I hope we are still friends. I should have done more research,'” Slade said.
“I have no reason to believe Nick had a side deal on this.”
Bodeman initially agreed to an on-camera interview with KOIN 6 News, but later changed his mind. He told KOIN 6 News he just wanted to help a friend get out of a bad financial situation quickly.
“In retrospect it’s very disturbing,” said Mickey Lindsay, managing broker at Oregon First. “I have no reason to believe Nick had a side deal on this.”
Adding to Slade’s confusion, city records from February 12 show a representative for Renaissance Homes contacted the City of Portland about whether the company could demolish Slade’s house and develop 2 lots. That inquiry was 12 days before Slade sold the property to Layton.
Layton told KOIN 6 News he heard about Slade’s property through word of mouth. He says he did not know the lot could be split. He said he planned to fix-up Slade’s house for resale, until he was approached out of the blue to see if he would sell to Renaissance Homes. A Renaissance spokesperson says Windermere agent Brian Butler often finds properties for the company, and brought this home to their attention.
Representatives from Renaissance Homes declined an on-camera interview. Anthony Cristobal works in the company’s land acquisition department and said, “I don’t disagree [Slade] got the short end of the stick, but that had nothing to do with us.”
Other real estate agents have advised against pocket listings.
“Generally speaking, a pocket listing is bad for the seller,” said Stephen FitzMaurice, a broker with Premiere Property Group. FitzMaurice wouldn’t comment specifically on Slade’s situation, but he wrote an article against pocket listing.
“Generally speaking, a pocket listing is bad for the seller” – broker Stephen FitzMaurice
He says they are usually not in a seller’s interest because buyers have been fighting over properties listed on the RMLS, “About half our listings go for multiple offers when they hit the market. I see our sellers getting 5–20% more than we thought possible.”
“And if the seller really needs to move, we could have a slightly under-market price that would generate an above-market price, with almost certainty we could move that property the first weekend we put it on.”
Slade’s neighborhood is desirable. The house across the street, which has more square footage and is in better shape, sold for $458,000 three months earlier.
In another email to Slade’s ex-wife, Bodeman wrote:
“In hindsight I would clearly encourage you to list in the RMLS and possibly make another couple mortgage payments until we could find the right buyer however at the time you guys wanted to avoid another payment and sell quick. I’m still confident that we did the right thing at the time, we just happened to be slapped across the face at the same time. I wish there was something I could do to go back in time and change this entire thing but we all know that is not possible.”
The pocket listing might also hurt the broker’s commission, but they don’t have to pay advertising costs and sometimes agents get finders fees from investors. There’s nothing to indicate a finder’s fee happened in this case.
After paying off his debts, Slade was left with nothing from the sale of his home. He filed a complaint with the Oregon real estate agency to look into the matter.
Statements
In a written statement to KOIN 6 News, Nick Bodeman said he decided not to do a formal interview. But he did provide this:
The Slade/Hansen family has been a very important family to me over the last 25 years and I’m sick for the way this played out.What I will say is this: Their goal when they originally spoke to me about the sale of this property was to sell it fast without putting another dollar into it, including a mortgage payment so that is what I was focused on. We sold it as a single family residence and not as a sub-dividable lot because there were many questions as to if the city would allow the lot to be divided and the cost and time to research this did not fit with the clients desires.At the time of closing everyone was happy and we went on without a concern. Of course, hindsight is 20/20 and I’m sure we all wish we could go back and get a “do-over” knowing what we know now.
Renaissance Homes also provided this written statement: