Posted on 02/27/2006 1:27:11 PM PST by Diana in Wisconsin
BELLEVILLE, WI - Five days after Samuel Mills was laid off from his $7 an hour job as a meat cutter at Jim's Food Center in Belleville last Oct. 29, he and his wife, Victoria, were approached with an offer they felt they couldn't refuse.
They had fallen behind on their bills and were facing foreclosure. So the Millses agreed to list their modest home at 128 Mitchell St., where they had lived for four years, with James "Jim" Olson, the owner of River City Realty.
Jim Olson, as it happens, also owns Jim's Food Center. He was the boss who laid off Sam. Sam is 68 and had worked for Olson for about two years.
The couple was already struggling to make ends meet because of the cost of litigating a work-related injury Victoria, 53, had sustained at a child care center 3 years earlier. The loss of Sam's income was the final straw, she said.
So they went with Olson. "The mortgage company was hassling us and we have these lawsuits going, so I said, 'OK, let's give it a try,' " Victoria said in an interview. "We listed it for $134,900 and they showed the place about eight or nine times. We had another offer on the place and somehow they just backed out."
Then, just as foreclosure proceedings were scheduled to begin on Feb. 6, Olson came in with an offer from John Baker of J&J Commercial Rentals LLC.
The Millses accepted it. At the closing, they were shocked to learn that Olson was actually Baker's partner - the other "J" in J&J.
Olson had agreed in writing to take a 3 percent broker's commission if he alone found a buyer. But at the closing Olson took 5 percent - $6,000 - for his role in selling the property to himself and Baker.
The Millses, when all was said and done, had nothing left after they paid off their mortgage, fees and back taxes.
Olson now rents them their former house for $500 a month. They pay the rent out of their Social Security and disability payments. But they don't have a lease.
"Our whole life is turned upside down and now we don't have a house," Victoria said. "I don't know how this is going to end. I don't know what we are going to do."
'Just trying to help'
Olson, when contacted about this story for comment, first scheduled and then canceled an interview with himself and Baker. Olson said he and his partner had decided not to comment.
He did say: "We were just trying to help them out to save them from being foreclosed on."
Kevin King of the Realtors Association of South Central Wisconsin said that real estate agents are obligated to reveal any personal interests in a deal.
"You're not prohibited from acting on your own behalf but certain disclosure rules apply," he said. King referenced Chapter RL 24.05 of the Wisconsin Administrative Code, which deals with self-dealing and disclosure of interest.
It says: "A licensee acting as an agent in a real estate or business opportunity transaction may not act in the transaction on the licensee's own behalf, on behalf of the licensee's immediate family or firm, or on behalf of any other organization or business entity in which the licensee has an interest without the prior written consent of all parties to the transaction."
The Millses said they gave no written consent and learned of Olson's financial interest for the first time at closing.
According to the Residential Listing Contract signed by the Millses and Olson on Nov. 3, 2005, the broker's commission for the sale was set at 3 percent, with 6 percent being the rate if a co-broker was involved in the sale.
According to the settlement statement from the closing dated Jan. 31, 2006, a 5 percent commission of $6,000 was paid to Olson's River City Realty and $5,805.81 was paid for the Millses' current and delinquent taxes as well as an assessment charge.
The remainder of the $120,000 paid off the mortgage company and settlement fees, leaving the Millses with a zero balance at the closing.
"Our beef is the misrepresentation and the fact that he shouldn't have taken his Realtor's commission," Victoria said. "If he was one of the buyers, I don't think that's quite ethical."
The Millses are struggling to live on the $900 a month they receive from disability and Social Security payments and are in the midst of bankruptcy proceedings. Victoria suffers from sarcoidosis and other respiratory conditions and lives with chronic pain.
Sam is looking for employment, but said, "When you're past 65, you take what you can get."
I don't buy a property of I can't get 1% sales price per month in rent. Since this guy paid them ~$130,000 for the house, a rent of $1000 (or more) per month would not be unreasonable. (Other factors can apply, commercial appeal of property, etc.)
At $500 per month, it seems like this guy is doing them a HUGE favor.
Maybe it was small meat. Like vienna sausages or something.
he was fired becuase Olsen apparently goes around hiring and firing peopel so that he can buy their junky houses. Two years of scheming netted a hefty profit of a few K here....
I don't know if I am. Either Jim laid him off for this purpose, or he knew in advance it would be happening and took advantage of that special knowledge to pounce. One is a little worse than the other. But not much.
Mr. Olson is in deep doo-doo. The Mills will get their house back, and Mr. Olson will probably lose his own by the time he gets done paying his legal bills. Jim's Food Center and River Realty are likely to be worthless shortly as well, since precious few locals will continue to patronize those businesses. He may even pull a couple of months in the slammer for the fraudulent real estate transaction.
One of the 8 or 9 other people who looked at the house might have bought it for 3x its value and then they could have walked away with a couple hundred thousand in their pockets. That would've been much better for them.
Fruit of the new bankruptcy laws?
The problem is turning up too often in too many implausible roles. You read the story and realize they'd better not sue the guy because, when they walk into the courtroom, he'll be the judge.
But he failed to mention that he was the one buying it.
I find it odd that the guy who bought the house is also the guy who laid him off.
A gift-wrapped jar of KY jelly and a bag of Hersheys Kisses?
Why did they trust Olson to sell the house after he laid off the man?
"But in my experience, people who are about to be foreclosed on, are not the best stewards of their money, and their word about how it was "stolen" from them should be taken with a grain of salt."
That was my take, too. They're lucky to not be out in the street, plus their mortgage and back taxes are now paid, they have a roof over their heads and didn't have to move at their age, with their health problems. Glass half empty thinking? Definately. And if they weren't paying taxes, and were facing foreclosure they definately had money management problems.
Yes, they're starting over again at zero in their Golden Years, but some people live their lives this way from the git-go, then look around in wonderment when they're left with jack at the end of their lives.
As far as the realtor, maybe what he did doesn't look like the most ethical decision on the surface but no mention was made that this realtor generally handles deals by ripping off the elderly. I mean, if the reporter had really wanted to put the thumbscrews to him, she could've done a little research to see what type of reputation that realtor has. Wouldn't be hard in a town of about 5K. But heaven forbid she'd have to do some actual research! Writing a sob-story about the elderly is a lot easier when you can just do it from your desk. ;)
...so he gives him his commission and jacks their rent up to market value...
By charging a full commission and then renting the property for less than FMV, these people were staying in a house that they otherwise would have been evicted from.
I suspect the problem here is a feely reporterette who can't figure out that it's the old folks and their realtor who are scamming the unpaid creditors.
The $500 a month for rent tells me this guy went out of his way to help them.
I'll tell you... ingratitude is among the ugliest of human traits.
One thing suggestive of this, was that they were already in the forclosure process when he was laid off.
It still looks like Olson abused his position as realtor, but there is clearly a lot of history missing from this story.
I bet the $500 a month is less than the mortgage payment was. Sounds like he did them a favor.
It's also just as likely that the former employer knew that his former worker faced a foreclosure and eviction, and bought the house to help him out.
There are any number of reasons he might want to remain anonymous in that case (didn't want to embarass the guy, likes doing anonymous charity, thought the guy was a bit of a leech and feared he would try to take advantage of his kindness, ect.)
Or he might be scumbag. I don't know without hearing his side of the story.
More to the point, if this was legitimate help, he would have explained his proposal to the Mills in advance, and asked if they would like to proceed with it.
good point. It's their other creditors that should be PO'd. Olsen and the Mills are basically hiding 6K from theri other creditors and rebating it to the Mills in the form of a low rent.
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