Questionable Real Esate Agents
I just lost a deal today and I am pretty hot over it. My partner and I found a house way undervalued (by as much as 35-40K) for its market last Friday. I contact my broker and got into the place and told him I wanted to make an offer right then. He tried to contact the listing agent but couldn't reach him. So, he called the principle broker of the other agency and told him we wanted to put in a full price offer ASAP. To the other broker's (owner of the firm) knowledge, there were no other offers on the table.
The next morning, our full price, fully funded offer with 1K earnest offer was faxed to their agency in the morning. My broker finally made contact with the listing agent late in the afternoon. He was less than amicable on the phone and wanted to know why he wasn't contacted (ie., why his priciple broker was called) my broker told him that he couldn't get ahold of him and wanted to expedite our offer asap.
The agent told my broker that although we had the 1st offer in, he had another offer on the table. My broker said ok, we were willing to pay cash for the property and offer 1K over the sales price (note: the home was pre-foreclosure, taken back by a mortgage co.). My broker stated again that the agent was kind of a jerk to deal with.
Today, we were told that another offer was accepted by the selling party. My broker tried to determine what the issue was and even if our bid had ever been submitted in the first place, the agent wouldn't tell him if our bid had even been submitted. In Indiana, real estate commission rules require all offers to be submitted. So, a couple of conclusions started coming to my mind here:
1. We had the 1st offer and sweetened the deal upon hearing of other offers.
2. If there were higher offers on the table we didn't know it because we were never contacted back and asked if we would be willing to go higher (because we would have).
3. My gut instinct told me that the agent was somehow not conducting an arm's length transaction (I personally feel that he either didn't submit our bid because he didn't want to share the commission with our broker or had some involvement in the purchase of the property, like hidden ownership, etc.)
I consulted with my attorney who said I would probably not have a case but that I should attempt to get documentation that our offer was actually submitted. With this, my broker called the priciple broker on the other side and requested that we receive proof that our bid was submitted. My issue here is that this is a lotta crap! Someone else has taken $$ out of my pocket and what I feel is somewhat suspect in nature. However, my attorney said that since an offer was accepted, we probably couldn't get it recended.
My broker has suggested that an attorney contact the selling party ( a mortgage co. ) and seek to determine if they recieved our offer and if possibly, what the price was or how the transaction was handled. Because if they were taken by this agent with $ lowballing,etc. they may have a case against him.
If I can prove the agent acted under the table, I want to take him to the Real Estate Commission. But, I am still out of a deal. The reality is, what can I do? Has anyone else had this issue? How have you handled it? Or, what I can do to minimize this activity in the future please let me know. Thank You.
[ Edited by frontalmystic on Date 05/10/2004 ][ Edited by frontalmystic on Date 05/10/2004 ]
Happens all the time. If you still want the deal, contact the seller and put your offer into them directly for a second time with a question as to why they didnt answer your first offer. Legally there are so many lies that can be said, that you will get nowhere. He can say that the other offer was already in, and date an offer the day before yours came in. You can put a formal complaint into the realtors commision for satisfaction that you got him back. But that is about all you can do. Pursueing a court case would be a waste of money. It is business not personal.
What I have done in the past is contact the seller directly, find out what the offer is and beat it. Then for spite let the seller know that you could have closed this deal a long time ago, if the realtor was any good. Then offer to take over there portfolio, since it is a lender. Let them know that you will handle all of there deals, not just this one, as long as you can deal with them directly and not through a crooked realtor. Or if this guy is as you say, then he is a "good ole boy". Turn him around. As long as he isnt your competition, tell him you want into his network, as he obviously saves his good deals for his friends. Tell him that you respect what he has done, and you would like to know what it will take to be number one on his short list that receives the better deals. That being said be his friend, and turn a bad deal into a good relationship. Keep your friends close, but keep your enemies closer as the saying goes.
Good Luck,
Kyle
Let me tell you some hard lessons I have learned. Real estate agents have so many laws on the books that protect them from almost anything. the only way I think you would have a case is if you can prove that the real estate agent knowingly or purposely did not tell his seller about your offer. I think you know how difficult that would be to prove. unless you could get him on a tape recorder or a witness that says he heard him say he did it on purpose or else you would probably lose. plus real estate agencys have high priced tricky lawyers that they will use to win in court. because jsutice has NOTHING to do with right or wrong but only how a crafty sly lawyer can interperate laws, laws that heavily favor a real estate agency. you will find like I have found that real estate agents are liable for NOTHING they say or do unless you can prove they knowingly did it with wrongful intent. the best you probably could do is threaten them with a lawsuit and see if they give in. but they probably wont because they know in court you would lose. good luck, I feal for you.
I strongly disagree that real estate agents have many laws that protect them - if anything, vast majority of real estate law is designed to protect the public, not the real estate agent. That's why real estate agents carry errors and omissions insurance.
Regarding the situation of the OP - you will never find out for sure what transpired over there. You have a right to demand proof that your offer was presented to the seller, but after you've received that proof, there's nothing you can do. The seller is not obligated to entertain your offer just because it's on the table.
Best thing to do now - have your broker monitor MLS and see what the property sells for. If it sells for asking price or less - you can go to the seller and ask them if they really received your offer(the broker at this point COULD forge seller acknowledgment of offer receipt, but you could go directly to seller after the transaction closes). If the seller tells you that they never received your offer, you can get the listing broker/agent in big trouble for failing to act in the best interest of the client and presenting all offers to the seller. But that's just from the revenge perspective. Kiss that property good-bye and keep looking - there's new stuff happening every day.
Thanks for the comments. I managed to contact the seller (mortgage Co. owned) The administrator of the property "told" me she had recieved the bid, etc. But during the conversation some remarks were made that told me she had talked with the r.e. agent and my gut tells me some collaboration happened before she called me. Probably knew that if something came up, she'd be named in a suit so they smoothed it over. As for the r.e. agent, I am monitoring the mls to see who bought the property and if there was any under the table connection to the agent. In my town, this can be found out easily. Futhermore, as I was talking to the admin. of the acct. She made the comment that my broker had marked on my pur. agreement that we'd go up 1K over the price and that it didn't construe an actual offer of 1K more on top of our offer. ??? My broker is a family member and I know that nowhere on the pur. agreement, did we ever state, wrote, etc. anyhing about the 1k over the asking price offer. It was done verbally over the phone in my prescence. So, I don't believe the "owner" was telling the truth either. Lost cause, I'm moving on....
I know it doesn't help much now, but for future reference your agent is entitled by law (at least in my state) to accompany the listing broker to present your offer, unless the seller has expressed in writing that they do not want this to happen. Once your agent presents your offer, they must excuse themselves, but at least you know your offer has been presented. Don't rely on the listing agent or a fax machine to present your offer for you. Plus it gives me the opportunity to brag on my buyer and present them in the strongest fashion possible. Do you think the listing agent did that for you? I think not. If the seller then decides to reject your offer, fine. They have the right to accept or reject any offer they wish, regardless of what it is. But I want to see my offer rejected in writing. Now at least I know my offer was presented and considered.