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

Question

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!

Wayne Brooks · Answer

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.

Christina R. · Answer

@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 R. · Answer

@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!

Christina R. · Answer

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!

Christina R. · Answer

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.

Karl Krentzel · Answer

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

Wayne Brooks · Answer

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

Karl Krentzel · Answer

@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 · Answer

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!

Joel Owens · Answer

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 ."

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

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