Penny Wise, Pound Foolish

I have always understood the concept of “Penny Wise Pound Foolish”, but somehow I seem to keep making the same mistake.

For the house we have in San Diego, I hired an agent Sandra Chang who together with her husband John Bell run this real estate agency called “Emperor Realty”. I think the key reason for hiring her was really because she only charged 5% of the rent, although I justified to myself further by saying that Michael’s parents’ properties in San Diego were also under her management.

As rule, we get what we paid for. To start with, Sandra did not show the house to any potential tenant, after she put the ad I wrote up into the MLS system. I showed the house to everyone who expressed interest, and I decided on the tenants as well as the rent. When I asked her to hire a cleaner to clean up the house after we moved out and before the new tenants moved in, apparently the cleaner did a poor job. The arrangement I structured with Emperor Realty was such that my tenant would pay them, and they would take their cut and pay me. The very first check I got from Emperor Realty bounced. That should have been a telling sign. I scolded her, only to get a really defensive reaction as if I were unfair to her.

My tenants then listed a few things they wanted fixed. Sandra sent in the same handyman without ever showing up at the house. Then she asked for a reserve fund to cover repairs, so that the handyman would not have to wait until the tenant pays the rent that month to get paid. I said fine and gave her $1000, only to remember later on that she also was holding onto the deposit from the tenant, which surely can cover any small repairs.

Fortunately, I selected good tenants, and they have maintained the property nicely. Then earlier this spring, we heard that Sandra died of a stroke suddenly. Needless to say, I did not bother her widower John Bell for a while. I only started calling him when my rent checks were continuously delayed. I never got hold of him. Meanwhile, my parents-in-law took advantge of their trip to San Diego to fire John Bell from managing their properties in San Diego. I don’t recall exactly what deterred me from following suit, but my guess is that partly it was because I was afraid of losing the rent and the deposit John Bell owed me if I were to fire him long-distance without showing up in person in San Diego. And perhaps I also felt bad that his wife died.

But things got worse and worse. By October, he owed me two months of rent and was utterly incommunicado. I decided to switch to the agent that my parents-in-law hired for their properties, and fire John Bell, or Emperor Realty. The letter was returned – the office had already been shut down. When I asked the new agent, who is not really that helpful to locate John Bell, she said that she could not find anyone from Emperor Realty, and the only house associated with John Bell had just been foreclosed. No one could find this guy! Now the total amount he owes me is close to $8000, which is not an amount that I am happy to part with. This agent then provided me Aaron Cheng’s phone number, who’s Sandra’s son from a previous marriage. I called him and he actually returned my phone call. He gave me a 30-minute sob story of how he really does not have the money to pay me, although he was so innocent that he got a broker’s license so that his late mother could be a realtor under his broker’s license, how John Bell has been acting strange to him and how he cannot easily get hold of John Bell either, etc, etc. Honestly, he sounded like a broken record. He said that there were remaining bills to be paid, and some of these bills don’t have contracts associated with them, but he trusted these old chinese people. I said, “they may not have a contract with you. But I do.” He said that he would look into it and talk to John Bell, and asked me to keep all this private and quiet so as to not tarnish his mother’s memory.

My agent sent all the proofs of the money that Emperor Realty to Aaron. However, since then, he has also disappeared depsite my repeated phone calls. I now realize – if only I had hired a more expensive agent, I probably would have prevented all this from happening. After all, we do get what we paid for.

Perhaps it is time for me to learn something new – i.e. How to file a small claims lawsuit. It is not exactly an experience that I would like to gain, but perhaps I should not be so condescending as to what skill is worth obtaining and what is not. Who knows – I might have to do it again in the future! :)