What’s the story on Exchange Apartment Finders?

The following anonymous e-mail was received earlier in the day:

If you want a REAL interesting story that (to my knowledge) has not been reported on, check out Exchange Apartment Finders.

Word has it the company does not have a real estate license at all, and operates without providing their agents with 120 card.

Essentially, in the eyes of the IDFPR, their agents do not exist.

How do they get away with this?

Pretty smart strategy, actually.

They don’t work with any of the well-known pproperty managers (PPM, Draper Kramer, Cagan, etc.). These firms require that their locator services be licensed.

EAF goes out and solely obtains their own listings (condo owners looking to rent, small investors who own apartment buildings, etc.). That way they are not really on anyone’s radar.

I’m not 100% sure, but I think the fine for something like this is approx 25k per transaction. They probably do 200 transactions a year.

Amazing – because they’ve been doing this for years.

Just check it out!

Here’s what I’ve been able to learn after some preliminary checking.

A corporation named The Exchange Apartment Finders Inc was involuntarily dissolved by the Secretary of State’s office in 2002. The typical reason for this is failure to file annual reports and pay franchise fees. There is no other record of incorporation of Exchange Apartment Finders in Illinois or of any corporation with that name registering as a foreign corporation in Illinois.

Exchange Apartment Finders is not licensed as a real estate broker in Illinois although the activities it engages in through its Web site would require licensing. If it does have a license under a different name, it’s in violation of state law for not disclosing that name on its Web site. At least one Web page on the company’s site bears a 2005 copyright notice, indicating it has been doing business for years.

Exchange Apartment Finders (EAF) currently has nearly 800 apartment ads on Craigslist. No real estate license can be found for any of the agents named in those ads. A number of those ads, and listings on its Web site, are for apartments managed or owned by major companies. It’s almost inconceivable that those companies would pay a commission to an unlicensed broker. Doing so would risk their brokerage license. Either EAF is doing business with major landlords under a different name or the ads are bait-and-switch.

There are several scathing reviews of EAF at Yelp, and several glowing ones of individual agents that appear to be planted.

Whois searches on the domain names are unrevealing.

The Better Business Bureau has had mail to EAF returned “addressee unknown” at four separate mailing addresses.

EAF’s phone number, listed at its Web site, is 773-296-2000. A search on that phone number turns up DC Dalai Lama tickets for sale by Ticketman. Ticketman.org’s phone number and address are identical to EAF’s. A “U.M. McGee” from Ticketman.org is featured at EAF’s Web site as having given EAF a glowing testimonial. U.M. McGee has left no other traces on the Web.

On the face of what I’ve been able to learn thus far any renter who contacts this company has to be brain dead. You’re giving up your credit card, Social Security #, etc. to – who? If you’ve rented an apartment from this company, are you comfortable with them having keys to it?

If you’re a landlord who has done business with this company, a current or ex-employee, a renter who’s used them, or a competitor who has knowledge of their operations, post a comment or send an e-mail to yojoe at yochicago dot com. If this company is what our anonymous tipster alleges, let’s see if we can put it out of business.

If you’re a principal of Exchange Apartment Finders, I’d be happy to meet with you and hear your story.

Exchange Apartment Finders has been added to our rental service do-not-call list.

A bit of the real world for all you kiddies out there who are playing leasing agent without being licensed – it’s a shame that more of you aren’t being hauled off in handcuffs:

(225 ILCS 454/20 22)
Sec. 20 22. Violations. Any person who is found working or acting as a managing broker, real estate broker, real estate salesperson, or leasing agent or holding himself or herself out as a licensed sponsoring broker, managing broker, real estate broker, real estate salesperson, or leasing agent without being issued a valid existing license is guilty of a Class A misdemeanor and on conviction of a second or subsequent offense the violator shall be guilty of a Class 4 felony.