Saturday, April 5, 2008

The Life of a Greedy Realtor

Some people may ask how did housing get so expensive? There are many people to blame but I thought this was a nice article of a realtor who through pure greed destroyed a community.

He rode around selling houses in a Bentley once owned by Mike Tyson and a pimped out golf cart. The Mike Tyson car is so fitting. A piece from the article:

"In a cobalt blue Bentley that he bragged once belonged to boxer Mike Tyson, Marty Donovan looked the part of a superstar real estate agent.
And he was. The Chicago native racked up dozens of home sales between 2004 and 2007, most in a single neighborhood, Clearwater's Island Estates. His $40-million in annual sales placed him at the top of heap.
"I was living in la-la land in Island Estates," Donovan says now. "I even did tours in a pimped-out golf cart. People loved it. It was island living."
Island living isn't so sweet anymore. And a lot of residents single out Donovan's business dealings for ruining their neighborhood.
Of the 36 houses in some stage of foreclosure in Island Estates, at least a quarter were owned, listed or handled by the 44-year-old Realtor"


So how did this piece of slime run up prices:

"When critics describe Donovan's prominent role in inflating property values — and abetting their subsequent collapse — they point to the Realtor's unusual shopping spree in the spring and summer of 2006.
.
A typical purchase was the house at 213 Leeward Island. Listed for $998,000 by an investor who'd bought it two years earlier for $530,000,

Donovan bought the 50-year-old, 1,900-square-foot house for the recorded price of $1.3-million.

The owner got his $998,000. Almost all the rest of the loan money was kicked back to Donovan's business partners, allegedly to make repairs on the house.


But within less than a year, Donovan stopped making monthly payments. Promised renovations never materialized and no one can account for the money supposedly borrowed for that purpose."

My take

What a scumbag. This guy pulled this scam several times on the island. He offered 30% over list for a house promising renovations to simply drive up prices. Guys like this should be thrown in jail. Its amazing to me how greed can make someone so evil and stupid at the same time.

So what did this same house sell for this year after superstar Marty got foreclosed on?

"M&T Bank foreclosed and marked down the house for quick sale this year. The sale price: $451,000."

And how did the rest of his buying spree work out for him?:

An agent with Joanne Hiller & Associates, Donovan left town in December, after the banks initiated foreclosure against all six of his remaining properties, valued at more than $7-million. He's living in Lynchburg, Va., to "clear my head a little bit."

At least his shady purchases caught up with him and justice prevailed. The sad thing is he destroyed many lives in the process:

"Benchmarks set by his sales and purchases inflated residents' property tax bills and polluted real estate data. People confident they were sitting on $1.3-million houses have learned the homes are worth half as much.

Island Estates has been ranked the second worst of 290 neighborhoods inTampa Bay for home devaluation. Sale prices on the island averaged $1.25-million two years ago. Among homes under contract this month, the average price is just $670,000. Many residents blame real estate agent Marty Donovan."

When you do eventually decide to buy a house. Try to use someone that your family knows or comes recommended by a close friend. There are Marty's everywhere. I bet Marty now drives a Ford Focus instead of a Bentley. I hope he learned that being greedy and a scumbag is not the right way to go through life.



6 comments:

Julie Woodward-Trenker said...

This is also a situation of one agent having too much power. Your article stated he had listed, sold or owned over 1/3 of the housing stock. People should take into consideration using a agent who has done the most business in one area, may not always be the right choice. Getting different prespectives helps to keep a market balanced. Monopolies are never good in any business model.

Jeff said...

Julie

I totally agree. I guess justice prevailed because instead of saving the money he made on his sales he threw it all into real estate and he ended up destroying himself.

If he was smart he would have saved a good portion of that money and invested into a diversifeied portfolio.

Jeff said...

of stocks and bonds.

West Toronto realtor said...

Interesting story. I read many stories about today's situation in US, about foreclosures and falling prices, but this one was different. On the other hand, as a West Toronto realtor I have feeling, that dealing with properties in big town is sometimes like game, like old Monopoly :) So I think I do understand a bit his steps, because once you get in, it's hard to stop trying to be the best.

Jeff said...

West

Sales people can get caught up in being the best. That type A personality sometimes can push you to do whatever it takes to be the best.

this is where the risk of fraud comes into play. Its a fine line. Marty crossed it and now he is broke because of his greed.

*Sarah...neither Plain nor Tall* said...

who says he's broke? i live in lynchburg and the "pimped out golf cart" sits in front of his manse next to the mercedes. i have just met him, and am trying to get to the bottom of all this before venturing further. hmm. does anybody have any specific details of whether or not he is truly to blame for all this? See this article for an alternate perspective...
http://www.tbo.com/news/metro/MGBYDBHURUE.html