Section Hate.

What is one of the most difficult, frustrating real estate transactions out there? No, not short sales. I'm talking about Section 8 rentals. I can't even believe the overwhelming amount of Section 8 inquiries I'm seeing, lately. For those of you who don't know, Section 8 is a government program set up to help house low-income families. Basically, Section 8 gives you a budget and housing requirements, (I.e. Number of bedrooms to occupant ratio..) and then you find the property. If you use a real estate agent in the transaction, Section 8 is supposed to pay the broker fee. Before the tenant can move in, a caseworker will come to inspect the property. Due to the disdain and avoidance from real estate agents for these types of rentals, New York State has created a law saying that we, as agents, cannot refuse to work with Section 8 clients. Additionally, a landlord can only advertise if they accept government programs, not the opposite. On a personal note, I've had nothing but negative experiences with Section 8. They lack respect for both the broker and the client. More so, the broker. I think governmental housing programs are a fantastic concept. However, they lack (at least I've found) the necessary organization to carry out a successful real estate transaction.

Two years ago, I took on a Section 8-approved client. I thought, "Wow, this is great. They have a government-determined budget and can only have a certain type of house. Plus, the government is paying me. What could possibly go wrong?!" The answer? Everything. Everything possible went wrong. I showed the client a million homes in a million different areas for months.(At the time, landlords could say that they didn't accept programs, so the houses that did accept programs were few and far between). They ended up taking a house on the South Shore of Nassau County. The inspection went well, the house was nice and we seemed to be on our way to a goodbye and a check. Little did I know, the matriarch of the family not only half-asked her paper work, she was pregnant with her fifth child. Meaning, the housing requirements would change. Section 8 determined the house met their needs anyway, and allowed them to proceed. Leases were signed, tenants moved in, landlord moved out (so we thought), and on we went. After a week of not getting a check on what should have been an easy deal, I started to question what was going on. The other agent and I became friendly enough during the transaction and were both concerned about our fees. She called the caseworker to find out what was going on. Nonchalantly, the woman told her that the proper paperwork had yet to be submitted from the tenant and payment would be held until then. I was baffled. So, the tenant had already moved in, yet her paperwork was incomplete? Weeks went by, then two months and still, no check. In this business, it's important to know when to cut your losses. I had enough. The $800 wasn't going to make or break my year. After losing hope and giving up, I received a phone call from the tenant. She said that the house wasn't suitable, the landlord was verbally abusing them, and had yet to fully move out. I basically told her it wasn't my problem. While I felt for her, (really, I did...) I don't work for free. I told her that I'd help her if she submitted her paperwork that day and I had a check in my hand from Section 8 the following week. Apparently, things weren't that bad. Not only did I never hear from her again, I still haven't received payment for my completed transaction. Here's the kicker: Out of sheer curiosity, I drove by the house about three months ago to see if they were still living there rent free. At this point, I'm sure you're not shocked to find out that they were.

The moral: Well, I guess there's two. The first, as I said, know when to cut your losses. Not everything is worth a battle. The other agent wanted to take them to small claims court. To me, that would have been a huge waste of time and effort. Don't get me wrong, I was pissed. I ran these people around like I was selling them a $3,000,000 home, but it just wasn't worth the energy. And second, know who you're getting involved with. I think it's unethical to not allow real estate agents the right to refuse Section 8 clients. As independent contractors, we should have the right to refuse working with anyone. Ethics go both ways. We're not volunteers, we need to get paid. As much as I enjoy real estate, I'm not doing it for my health (maybe my health insurance, but not my health). For most of us, real estate is our career. I will hold your hand and your child all through the process, but at the end of it, I need to be paid. Am I saying avoid Section 8 deals like the plague? No. I'm just saying to watch your back in any situation. No one cares about your payment except for YOU. Take care of yourself, and know what you're getting into.