Kickbacks to agents from investors
Hi all,
I have just started looking at investing in our first flip. We have been heavily involved in bidding on homes in our area for a couple of weeks.
I have an uneasy feeling that certain bids we have lost out on are due to the actual listing agent receiving kickback from other buyers to ensure their offer is put to the seller.
Has anyone had the same experience? Its a very competitive market so this wouldn't come as a surprise. I also know it is illegal :(
My reasoning is as follows:
2 deals - we offered at least $40K above asking price -I'm talking about a $175K home here. We were told we were the highest bidder. Offers closed an hour later. We stressed that we would love the opportunity to counter if we did not come up as the higher bidder (just in case). The listing agent said of course.
Obviously 3 hours later we find out the home is under contract - no response by agent.
So I find it hard to believe that an agent who works off commission will not return to eager and involved buyers to get an increased sale price. Who turns down free money - except if they are getting it from another buyer already.
There are many flippers in my market and the difference between a winning bid is the listing agent and what he presents to his clients.
Any thoughts?