So the Agent is the point person, but no listing agreement with seller??

17 Replies

About a week or two ago I posted a thread in another forum about getting a call from an agent, off of my absentee list.  Long story short, he was not calling about his property, but about a property he has been working on that is also on another list of mine.  In the course of a month, I have utilized resources to talk with the one with the authority to sell (who lives out of state) and also reached back out to this agent twice (one voicemail, one email) and didn't get any return response until I mailed a letter to the out-of-state seller.  In that letter I stated that I also am an agent and that I want to be able to see this property and communicate with whoever has the legal authority to do so ( i.e., the executor and the agent - if he has the listing).   So please, direct me to whomever that is.

I then get a call about 2 days after this letter would have been delivered from the agent and we cleared up any misunderstandings about the coincidental nature of this particular property and my yellow letter mailings (in which I do disclose I am an agent).  

I have subsequently viewed the property with this guy. I'm not a rehabber (yet) but I'd say it's extremely borderline if it would qualify for any financing (maybe a 203k but don't know what parameters even those fall under for FHA to insure). When Agent first called me he said this would be a cash sale.

So here we are now - I'm seriously considering an offer.  My question -

who do I present this to? 

I see no listing for this in my local MRIS. 

I asked the man yesterday if he has the listing. He said yes. Again, it has not been in the MLS the whole time we have been communication - probably a total of 3 weeks now. So it's not like a "pocket listing" from the time of his first phone call like he had the papers but had 24 hours before putting them into the MRIS.

Any advice is appreciated. Also, any advice on what does and does not qualify for financing in terms of repairs and FHA is appreciated.

Thanks in advance!

@Christina R.  

This is very interesting. Have you spoken to the seller at all ? If so is he saying that the agent is representing him ? I would probably present the offer to the seller to start and if the seller then directs you to the agent with the offer go from there based on the sellers instructions. 

I also find it interesting that you disclose your licensure on your mail outs. I was having a hard time figuring out whether or not to do this. I didn't want to scare people off with the letter but I would disclose once they actually contact me.

Mostly major, but lots of minor things will prevent traditional FHA financing: leaking roof, no stove, no floor coverings, Any rotting wood, small trip hazards, functioning kitchens/bathrooms/heating etc. With a 203k there are practically no limits to the repairs needed, and still qualify.....it's just the all in price vs appraisal. As for the owner, he hasn't responded, so it would be fair to say going thru the agent would be correct.

@Wayne Brooks  @Cierra Seay  

Thanks for the responses.  I disclose because because legally you have to when you have that first discussion on the phone, face to face, etc., and this just is a little preemptive measure to piggy back on that ... also I have agents themselves that own property that show up on my lists and I don't want to ultimately find myself in a situation where they may stir up trouble for me because I never said at the get-go I am an agent.

For the 203K - since there seems to be no limit to what could be covered as long as it appraises, how easy is this type of loan for the buyer to use. I know you must be an owner occupant, and repairs must start within 30 days of closing (correct?).  Are they pretty straightforward or a nightmare to navigate?

From your original post it sounds like you mailed a letter to the owner and then you received a call from the other agent. This indicates that the seller may be in contact with the other agent. It also sounds like the agent showed you the house. This also indicates a relationship with the owner. If so, then I would submit the offer to the agent and put a 24 hour response time in. The agent either has a relationship with the seller or not.

Also, working through another agent helps you from ending up in an undisclosed dual agent situation.

Hope this helps.

Agree with Ron and Wayne, as to how hard is the loan process, that largely depends on the lender and their experience in doing them. In many areas they are possible, not probable as they are a pain for a lender if they don't do many of them.

I suggest you call local lenders and ask, some will say the don't do them, some may say the do, then check them out as to performance and closing.

Issue is that some loan officer may fudge a bit saying they can to drum up business.

Might get an idea of who the efficient ones might be from title companies who have construction disbursement services, they will know, not sure if they will recommend a lender but they should be able to say who does most of them.

Frankly, I'd go conventional as a purchase money rehab commercial loan and move it to perm financing if needed. FHA is a nightmare in this area due to appraisal requirements. The issue is arriving at a value from specs in the appraiser's mind's eyes and then adjusting to reality as to quality of work or materials actually used, usually being less.

Just because a lender offers FHA doesn't mean they close as anticipated.

BTW, that sure sounds like a pocket listing, if it's not listed, something is dragging, but yes, submit as Ron suggested. :)

Im brand new as an agent so still trying to remember all from the licensing class and of course continually learning thru experience so i could be off here but i thought once tou have a seller listing u must put it up on the MLS within a specific time frame. If that is the case then this "listing" is like a week-plus pocket listing. What i think is that this family had a family friend in the area of this house and this friend is an agent who has been helping out and sort of tryjng to find a buyer pre MLS listing but either doesnt have the listing signed yet or does and hasn't put it in MRIS... my MAIN concern since its not in MLS is ... will he present the offer because im coming in with investor pricing and when i walked the property with him the other day, he starts mentioning "guru formulas" investors use, etc etc.. Ergo whats to prevent him from not even telling the seller the offer?

So its ok to make it to him and send it to the seller also since it still isn't up in the MLS?

The requirement to post on the MLS is from your board of realtors as to the time limit, not all licensees are Realtors, they aren't in the MLS system, many commercial agent/brokers are not Realtors.

If this guy says he's a licensee and has a listing, you need to send you offer to him. That is what he is representing, state law protects his position and may hammer you for attempting to circumvent his listing.

There is nothing wrong with you inquiring and asking for the listing if it's not on the MLS as you need to know about 1. your agency relationship and 2. co-brokerage arrangements before you make an offer.

If he just has a pocket listing, he can probably formalize that at any time, even if he were shady, his relationship will probably survive.

If he is a Realtor in your MLS area, then ask him where the listing is and the aspects of agency I mentioned. He'll need to get on the stick and get a listing and post it if he's just messing around, I'd give him time to get his ducks in a row and tell him you'll have to submit the offer in a dual agency relationship if he can't show otherwise.

If he's not a Realtor, but an agent/broker he has no co-brokerage requirement per se, it needs to be negotiated.

Light a fire under him, you can request this information with a courtesy copy to the owner under the circumstances as you don't know the status.

Before you leap, see your broker too as to how they want you to proceed. Good luck :)

An owner can authorize an agent Not to put it in MLS, could be a type of one client listing, etc. even of there's no formal listing, the owner obviously prefers to go thru the agent. The agent apparently knows about wholesaling, rehab numbers, 70% of ARV less repairs, etc, and is likely letting you know those numbers won't fly.

Yes the seller might not want it on the market. The reason is every yahoo person contacting and bugging them etc.

If a seller trusts a broker/agent sometimes they like to silently put it out off market. This helps the broker/agent wade through serious buyers from non-serious buyers before it gets to the seller.

For instance you are wanting to do an FHA loan and the agent has stated the seller is looking for all cash with non finance. With financing tons of things can go wrong and the deal doesn't close. With cash and a high non-refundable deposit the seller one way or another is getting money 100%.

When sellers go in and out of contract along with buyers everyone can get what we call in the business " deal fatigue ".

You want the buyers and sellers to have as smooth as process as possible so that it is a pleasant experience and they keep buying and selling. If it's a nightmare the parties can get turned off to the process all together. So for a seller the broker/agent needs to value their time and have screening in process for these buyers.

Some will say all offers have to be presented but in some states I have seen " unless authorized in writing by the seller not do so ."

Originally posted by @Christina R. :

About a week or two ago I posted a thread in another forum about getting a call from an agent, off of my absentee list.  Long story short, he was not calling about his property, but about a property he has been working on that is also on another list of mine.  In the course of a month, I have utilized resources to talk with the one with the authority to sell (who lives out of state) and also reached back out to this agent twice (one voicemail, one email) and didn't get any return response until I mailed a letter to the out-of-state seller.  In that letter I stated that I also am an agent and that I want to be able to see this property and communicate with whoever has the legal authority to do so ( i.e., the executor and the agent - if he has the listing).   So please, direct me to whomever that is.

I then get a call about 2 days after this letter would have been delivered from the agent and we cleared up any misunderstandings about the coincidental nature of this particular property and my yellow letter mailings (in which I do disclose I am an agent).  

I have subsequently viewed the property with this guy. I'm not a rehabber (yet) but I'd say it's extremely borderline if it would qualify for any financing (maybe a 203k but don't know what parameters even those fall under for FHA to insure). When Agent first called me he said this would be a cash sale.

So here we are now - I'm seriously considering an offer.  My question -

who do I present this to? 

I see no listing for this in my local MRIS. 

I asked the man yesterday if he has the listing. He said yes. Again, it has not been in the MLS the whole time we have been communication - probably a total of 3 weeks now. So it's not like a "pocket listing" from the time of his first phone call like he had the papers but had 24 hours before putting them into the MRIS.

Any advice is appreciated. Also, any advice on what does and does not qualify for financing in terms of repairs and FHA is appreciated.

Thanks in advance!

 Hmmm... complicated questions you have!! 

Let me see if I can answer them in the best way I can!

Question 1: Who do I present this to? 

In the absence of a valid listing agreement, and placement on MLS, there are a lot of variables that can affect this outcome. If they are a Realtor® or not could affect their adherence to the Code of Ethics so that might pose a problem. (i.e. a non-Realtor® would be under no obligation to disclose the status or end date of any contract with a potential seller. for more information, see case interpretation Case #16-7: REALTOR®’s Refusal to Disclose Nature and Current Status of Listing to Another REALTOR® (Revised Case #21-13 May, 1988. Transferred to Article 16 November, 1994.) If they are a Realtor®, they are under an obligation to let you know it's current status. 

However, let's check out your second question... 

"I asked the man yesterday if he has the listing. He said yes. ...... So it's not like a "pocket listing" from the time of his first phone call like he had the papers but had 24 hours before putting them into the MRIS."

It may be a case of mistaken identity. When you talk to him, make sure that you ask him for the MLS number so you can look it up!

For your FHA Question...

Typically, since you are an agent, I would recommend that you check with your company affiliate lender.   They probably have one!  Have them take you out to lunch (**they will pay*** LOL) and explain to you all the intricacies of financing.  

If there is ONE piece of advice I would give you (I actually have about 371 pieces of advice available)  after 18+ years in the business, is the BETTER you know financing, the more competitive you are!  That is MOST Agent's weakness.  So the better you know it, the ins, the outs, and especially the special programs that come up for first time homebuyers or investors (i.e. Homepath's 15% down Investor loans) the more "at bats" you will get in your career!

Good luck, and have a powerful sales day! 

@Karl Krentzel  @Wayne Brooks  

@Bill Gulley  

Thanks to all who posted above. I will email my broker to clarify as suggested and everything everyone is saying about makes sense, from the listing to knowing more about financing to be a better-equipped agent. I never planned nor plan to cut the agent out but seeing as this could be one of my first agent transactions, the ambiguity (as I perceive it) on the listing in the MLS is throwing me off somewhat on the "what ifs" of that. Ultimately, all I can do is present an offer and then see what the result is. Thanks again. This has been very helpful!

@Joel Owens  

 - the agent told me on our first call this would have to be a cash sale, wouldn't get bank financing. When I actually saw it this week,  2 - 3 weeks later, he brought up 203K financing and hence my questions about that loan program.  I still believe it's a cash sale and won't qualify for anything other than a 203K if someone wanted to go through all of that to then live it in.    Sounds like per @Bill Gulley  

@Christina, when you get that financing info down, then you can get REALLY Creative!!!  

FHA 203k Basics and Fun!

As to FHA 203k, there are two types. Streamline and Regular. Streamline are for cosmetic type damages under 5k and the regular is OVER 5k worth of repairs. There are several conditions.

Namely;

  • You must use licensed contractors
  • You must get approved bids prior to the work being done
  • Work must be done within (either 90 or 180 days) a specified time period.
  • Additionally, to do a FHA 203k program, there are some minor additional costs.

It seems like the chief question is the Agency one.  If he is a Realtor® then he needs to disclose to you the presence of a valid Exclusive Right to Sell, but more specifically ANY COOPERATION.

It is NOT a guarantee that because it is listed that there is cooperation. 

Ask the "listing agent' what the terms of cooperation are first. 

FHA 203k Fall-through Rates

It's not like they fall through more, or less often.  It is just that many lenders do not want to do them because they are typically much more paperwork, a lot more hassle, and generally are not as profitable as say a conventional 20% down would be.  

Ask around... you will find a Mortgage Lender or Broker in that area who will specialize in 203k. Ask the local HUD Brokers who does them. They will know. Because of the ppwk involved, and the approved inspectors, appraisers, etc. it is simply easier to find a specialist who knows that product.

Best of luck, and a powerful sales day to YOU! 

@Karl Krentzel  Maybe a typo, streamline is $35k or less in repairs.

Originally posted by @Wayne Brooks :

@Karl Krentzel Maybe a typo, streamline is $35k or less in repairs.

  ARGH!! Thanks for the catch!   35k or less in repairs!

Well, low and behold the listing showed up in the MLS around 5 PM last night. Now, I know I have checked that address multiple times and made sure I punched it in correctly, no go prior. I did ask my broker the questions asked above so I'm glad I posted this because now I have learned a lot for the next go around that is like this. My broker said that MLS listings will show up instantenously; I had asked if there was a lag time and he said no. The one thing I did notice was that the listing date was Friday, not yesterday. Hmmm. In any event, I have someone who wants to see it so fingers crossed not only do I learn book knowledge here but maybe get a few coins out of the deal as well. THanks for all the posts.

Update - so my client made an offer which I felt was completely in line for the condition of the property. The listing agent asks for highest and best as it's indicated there are 3 more offers. So we give it. Client comes up 5K ,which was his ceiling, and offers to put 50% as EMD. this is a cash deal with no contingencies so close whenever title is complete. I get some (what I consider to be) rude texts from the listing agent who also basically said don't bother writing up something that's a low ball. Now, I'm a new agent so I have no idea what the "etiquette" is here but I respond I'm just doing my job.

Now I check and see it's still active a week later. If my client wants to resubmit, should I do a quick email or resubmit all the paperwork? Obviously this isn't like HUD where you can punch in offers all day long if you want and I certainly don't want to alienate anyone but since there is a listing agreement and I must go through the agent (instead of that quick follow-up phone call with a direct mail prospect that isn't listed), how could I best go about this?

Thnx!

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