Licensee Ethics

11 Replies

Question, I recently placed a property under contract. The owner calls the day before closing wanting out. 2 days later I see the property listed on the MLS. At this point I have not agreed to release the owner from our agreement. I called the listing agent and after speaking with her I have a strong suspicion that she convinced the owner to back out so she could take the listing. And the property is now pending contract.

Now strictly for educational purposes, did she violate any code of ethics? Is it worth filing a complaint or rocking the boat?

Wait, you were still under contract when it got relisted on the MLS, and had not released the seller from their contractual obligation? Can't you just sue to force specific performance? Then, once you win, the realtor's client (and presumably, new buyer) will also be filing complaints.

Yes. It was not listed on the MLS when I placed it under contract though, it came from my marketing campaign. However the owner is a 70 year old disabled veteran. Don't see any judge forcing him to sell, and he doesn't have two nickels to rub together so probably couldn't even get my expenses in a judgement.

If you think that the agent told the seller to try to get out of the contract so she could list it I would put in a formal complaint.

If you want the deal I would (or have your attorney) get in touch with her Broker and inform him/her that you already have a contract on the property and this agent relisted it and presumably has a new buyer for it.  Inform them that you will provide the title company or attorney (whoever does closings where you are) and let them be like "no effing way are we going to do this closing!".

I did record my contract with the county register of deeds, so they will find out when they do their title search I assume.

I very sure she did convince him to backout as she knew all the details of our contract. Planning to call the real estate commission monday to see what they have to say.

So if I'm understanding this correctly, you signed a purchase contract with the seller, who was not represented by a listing agent. Then, right before closing, the seller backed out of the deal, and you suspect this listing agent came along and talked him out of it.

Not giving legal advice, but there are legal remedies if the seller backs out. At the very least you should get your earnest money back. Contact an attorney.

If anyone convinces a party to a contract to breach the contract, that's tortious interference. It's a civil matter and there are legal remedies. Contact an attorney.

And yes, it would definitely be an ethics violation for a licensee to do that.

Well, we have no idea what your contract says, or doesn't say. I'm guessing this is a case where the agent got a better price for the seller.  If you recorded your contract, then they'll have to deal with you.  But, don't expect a friendly judge if your price was a significantly below their current  price, "70 year old disabled vet" and all.  The agent probably has no liability if the seller came to them and said "hey I made a mistake, help me get out of this".  So you haven't even talked to the agent?

@Christopher Goldie

If the agent knew you had a contract and intentionally interfered with that contract, you may wish to read up on "tortious interference".  With that said, I suspect the listing agreement the broker has with the seller includes a seller representation that the seller is not then currently under contract.  If so, the broker may have an out unless you can prove the broker knew of the contract and interfered with it anyway. 

Even so, you were smart to record the contract or an amendment of same as it forces the seller to deal with you in order to clear title. 

Here is what the owner and myself came to. Firstly, to summarize our conversation.

Me "What do you need?"

Him " I need a place to stay with electricity and running water, I need money to eat off of and I need a few bills paid off"

My offer was to , at closing, pay his past due bills, pay for 1 year lease in an apartment and pay him monthly $500. He would also receive $50k , secured by a lein, when I resold the property. I understand the issues with this, and his fear of not getting his money. Not debating that fact. Now my dilemma with making a cash offer was the fact that he had no place to go until he took his money and bought a house. No friends, no family to stay. I was not going to had over $60,000 and then sit around and let him stay in his property until he purchased a new place. This agent listed the property at $60,000 and I assume she has a pending contract for near that. I do take some issue to the owner backing out last minute after the time and effort I put into this deal, but I am willing to walk away. 

My issue is that if he backed out because an agent, knowing there was a contract in place, convinced to basically breach his agreement, therefore placing him in the threat of legal action. Like I said, I doubt any judge would rule in my favor aganist this guy, and I accept that. Just, is this unethical from the standpoint of this agent?

@Guy Gimenez

Thanks, I will read up on that. Proving the agent knew, probably not going to happen. This is pretty much for future reference in case I get in deep with a larger deal and run across this. Most likely I'm going to sit back and wait until the closing attorney contacts me. Then I may ask for a couple thousand to walk away and clear the title.

If you have the property under contract and you still want to buy it you can file a kid pendens notifying any potential buyers the property is subject to dispute. This could force the hand of seller to continue on with a sale to you. As for the agent, unless you have sometime of proof it's probably not worth the psychological energy and the time to pursue. That's just my opinion of course. I'd suggest you remain focused on the target and put aside the he said she said and instead find a work around to the problem at hand.

So what is involved in filing a lis pendens. How would it be worded in a situation like this?

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