Am I being screwed over by listing agent?

Am I being screwed over by listing agent?

Investor · Miami, FL · Member since 2013 · 807 posts · 475 votes
I viewed a property for 87K which is a homepath property and has been on the market for over 2 months. I called the listing agent to say I wanted to make an offer of 80K. He said if I could close by end of July he thought it would be accepted as banks were always eager to close properties by the end of the month. I went into their office to sign paperwork 2 days later and spoke to a different agent. She said they now had an offer at 81K so I had to come in higher. I subsequently offered 82K. I made a mistake by calling two days later to see if there was a response from the bank. The person I spoke to said there was no response. 5 minutes later I got a call from the agent I'd met with who said the other buyer offered 87k, so I needed to offer 88k if I wanted it. I said I needed to think overnight and she said no, I needed to confirm immediately. She started saying how I really needed the property so I had to offer 88k and I ended up saying OK. The next day the property went to pending and the day after I received a call from them that I had to go in and sign paperwork with the higher offer price. Who thinks I was screwed over? I know it's illegal to tell a buyer what other offers are on the table and I'm wondering if they used my apparent desperation to drive the price up?
0Reply
134 views

Most Popular Reply

Investor · Rancho Cucamonga, CA · Member since 2008 · 1k+ posts · 684 votes
11y

I really don't how it is relevant at this point.  If the agent broke the rules what ramifications do you expect to help your position?

1. Are you happy to pay 88k?  

2. Do you really think the listing agent would ever admit what they did/didn't do to the Seller?

3. Do you think the Seller will somehow lower their price 8k?

You complaining and making accusations is going to stop them from ever doing business with you again.  

I have been in your shoes many times with agents. They are all lairs to some degree. Your job is to make the best offer you feel comfortable with and not think about it anymore.  

I have thought an agent was bluffing and missed a deal I would pay way more because I was testing them.  I have also moved my offer up in a highest and best scenario when I was the highest offer by over 10k.

Your goal should be to have them like dealing with you so much that they give you last look on all the properties they can.  You'll win some and loose some, but the path you are taking right now isn't helping anyone.  

See this reply in the discussion

52 Replies

Jump to latestLatest
  • Investor · Nashville, TN · Member since 2015 · 688 posts · 607 votes
    11y
    Nat Chan if you really feel like you were screwed over, take it to the board of real estate in your state. They will go through arbitration and you just ask for all documentation they received on the transaction. They should have all the offer that were made in their folder. If they don't, that's a violation. You really have no other option. Next time, set a price for the home for what your max allowable offer is. So if 90k is your Mao for example, it doesn't matter what the listing agent did
  • Property Manager · Livonia, MI · Member since 2011 · 4k+ posts · 1k+ votes
    11y

    yes you were.  the problem started when u moved away from your initial 80k offer.  rookie mistake 

  • Investor · Riverside, CA · Member since 2014 · 351 posts · 220 votes
    11y

    I'm just happy to get good deals I can do and make money with.  Close the deal and move on, if it still works at that price your the winner.  Vurtually every deal has some kind of wholesaler, cash for keys, unexpected rehab, whatever comes up, adapt and move forward.  You will be rewarded is you make this deal work fast and effectively,  who cares about the agent.  Take him/her to lunch and say "ok I got you a good number on that one you owe me one" after 5 or 6 deals this one won't sting one bit.  Good luck

  • Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
    11y

    Yep, the higher price an REO agent gets, as a percentage of approved list price, the more brownie points, and future listings, they get. No real legal implications though, and the FREC or the Board won't get involved in "negotiation tactics" complaints.

  • Investor · Miami, FL · Member since 2013 · 807 posts · 475 votes
    11y
    I certainly still have the option to back out. I'm tempted to back out simply because I don't like being manipulated and lied to. The deal is not a killer of a win. I think it sits comfortably in the comps and I'm paying close to market price. As an investor I aim to buy below market value. I'm not so sure what to do presently.
  • Real Estate Broker · Fairfield, CT · Member since 2015 · 312 posts · 231 votes
    11y

    Entirely possible that you were taken advantage of; with that said, I have found that it sometimes goes both ways. Often we try to get agents to divulge information about other offers - which they are not allowed to do - but we try anyways. If we push them to blur the lines just a bit, can we really get upset when they turn around and blur the lines in the other direction?

    I myself have been through this as well - very similar situations. I always have a max price, and I won't go $1 over my top price. So no matter how it happened, as long as we stay under my range, I'm still happy. Try not to focus on did or did you not get pushed around a bit on price. Was the final number within your budget? Or did you get pushed over? If the former - congratulations! You got a house within your budget! Be happy and move forward! If the latter - remember that for next time.

  • Des Moines, IA · Member since 2015 · 45 posts · 28 votes
    11y

    I'm curious as to why you didn't use your own agent. Why did you call the listing agent directly and did you visit the property prior to making an offer?

    I would run the numbers and make certain the property works for me at that price point. If you don't feel like it will then forfeit your earnest money. I would much rather lose $1000 up front rather than a $100 a month for as long as I own the property

  • Rental Property Investor · Rockwall, TX · Member since 2015 · 891 posts · 701 votes
    11y
    Originally posted by @Nat C.:
    I viewed a property for 87K which is a homepath property and has been on the market for over 2 months. I called the listing agent to say I wanted to make an offer of 80K.

    Well, you were screwed, but mostly by yourself.

    The listing agent works for the seller, not you. While using the listing agent gives them an extra incentive to close the deal, they never owe any allegiance to you in any way, shape, or form. Legally speaking, if you sign the form for dual representation, you may get an impartial agent, but even that is unlikely. The bank provides numerous listings and is a constant stream of business - which is usually very alluring to an agent.


    This is why buyer's agents exist. If you're new to the game, you should hire an agent that understands investments and understands your needs. Without one, the only person looking out for your best interests in the transaction is you.

    -Christopher

  • Investor · Miami, FL · Member since 2013 · 807 posts · 475 votes
    11y
    Originally posted by @Travis Lloyd:

    Entirely possible that you were taken advantage of; with that said, I have found that it sometimes goes both ways. Often we try to get agents to divulge information about other offers - which they are not allowed to do - but we try anyways. If we push them to blur the lines just a bit, can we really get upset when they turn around and blur the lines in the other direction?

    I myself have been through this as well - very similar situations. I always have a max price, and I won't go $1 over my top price. So no matter how it happened, as long as we stay under my range, I'm still happy. Try not to focus on did or did you not get pushed around a bit on price. Was the final number within your budget? Or did you get pushed over? If the former - congratulations! You got a house within your budget! Be happy and move forward! If the latter - remember that for next time.

     I understand your point however I never requested to know the details of anyone else's offer.

    Further agent undergo a test and earn a license which requires them to adhere to legal paremeters.

    No one requires a license to be a buyer.

  • Investor · Miami, FL · Member since 2013 · 807 posts · 475 votes
    11y
    Originally posted by @Cody Kauzlarich:

    I'm curious as to why you didn't use your own agent. Why did you call the listing agent directly and did you visit the property prior to making an offer?

    I would run the numbers and make certain the property works for me at that price point. If you don't feel like it will then forfeit your earnest money. I would much rather lose $1000 up front rather than a $100 a month for as long as I own the property

    You don't lose your EMD whilst in the due diligence period.

  • Investor · Miami, FL · Member since 2013 · 807 posts · 475 votes
    11y
    Originally posted by @Christopher Brainard:
    Originally posted by @Nat C.:
    I viewed a property for 87K which is a homepath property and has been on the market for over 2 months. I called the listing agent to say I wanted to make an offer of 80K.

    Well, you were screwed, but mostly by yourself.

    The listing agent works for the seller, not you. While using the listing agent gives them an extra incentive to close the deal, they never owe any allegiance to you in any way, shape, or form. Legally speaking, if you sign the form for dual representation, you may get an impartial agent, but even that is unlikely. The bank provides numerous listings and is a constant stream of business - which is usually very alluring to an agent.

    This is why buyer's agents exist. If you're new to the game, you should hire an agent that understands investments and understands your needs. Without one, the only person looking out for your best interests in the transaction is you.

    -Christopher

     I usually prefer not to work with a buyers agent. I think I've won a lot of properties solely because the LA made sure I had the strongest offer so they could make double commission.

    I've also had less than disirable experiences with 1-2 buyers agents that I decided the less middle-men, the better.

    I do think a buyers agent would have helped me in this instance though.

  • Real Estate Broker · Charlotte, NC · Member since 2015 · 4 posts · 1 vote
    11y

    Hi, it's likely your property was in a multiple offer situation with deadlines attached. Surely you had a price in mind and hopefully you didn't go over it. Next time I would require the firm to assign a "Designated Agent" to represent you so you have someone with your best interest in mind.

    -Jerry

  • REALTOR® · Bastrop, TX · Member since 2013 · 324 posts · 191 votes
    11y
    You weren't screwed over, but you did just get a very good lesson in negotiations. There's nothing here that's illegal or against the Code of Ethics, as you presented them. There's also no one, State or Board, who can force them to divulge the content of their other offers, or force them to "prove" they were acting in good faith. As others have said, set a top-end number and work to stay as far under that as possible, but be OK with anything up to that point. Also, please don't assume that working without a buyers agent will get you any better of a deal. Most listing agents won't take the double commission and kick it back to the seller, so it's more work for them for the same amount of pay. Also, I love working with unreported buyers in my listings, because they don't know what they don't know; which often times equals more money in my sellers pocket.
  • REALTOR® · Bastrop, TX · Member since 2013 · 324 posts · 191 votes
    11y
    Unrepresented*
  • Santa Rosa, CA · Member since 2015 · 191 posts · 75 votes
    11y

    Nat, if your gut tells you to back out of it, even for principle, then do it.  But when you think about backing out, and there's a little voice telling you that it isn't so bad a deal, then go for it and make the best of it, as long as you don't beat yourself up over it.  Make a command decision and don't look back. 

  • Real Estate Broker · Fairfield, CT · Member since 2015 · 312 posts · 231 votes
    11y

     Agents have to abide by the 'codes' set forth by their licensing board, state, etc... but breaking those codes comes with penalties (they're about $100) and at worst the loss of their license (it would have to be a MUCH more serious offense than a ghost offer). Again, its all about setting your own limit and working within that. You may not have asked about other offers, but no one made you beat those other offers either.

    Sometimes it seems like it SHOULD require a license to be a buyer - lol.

  • Flipper/Rehabber · Allentown, PA · Member since 2011 · 1k+ posts · 701 votes
    11y

    @Nat C.

    First and foremost, how did you see the property without an agent? Are you making your offer sight unseen?

    If there are multiple offers on a HomePath property it MUST be sent to a multiple offer round. There is definitely something wrong here. Most of the subsequent posts are incorrect regarding a Fannie Mae property. You can call 1-800-7-Fannie to report fraudulent activity, which I suspect is occurring in this case - again, specific to Fannie Mae's rules. Fannie Mae does not allow listing agents to disclose other people's offers, and there must always be a highest and best round when multiple offers are present.

  • Investor · Miami, FL · Member since 2013 · 807 posts · 475 votes
    11y

    I emailed the real estate voicing my concerns.

    The director called me and denied that I was ever given information of specific amounts of other offers.

    He made various statements completely contradicting himself.

    Eventually he said I could go in and see the other offers he received. So I am going in tomorrow to meet him.  

  • Investor · Irvine, CA · Member since 2015 · 373 posts · 205 votes
    11y
    Originally posted by @Nat C.:

    I emailed the real estate voicing my concerns.

    The director called me and denied that I was ever given information of specific amounts of other offers.

    He made various statements completely contradicting himself.

    Eventually he said I could go in and see the other offers he received. So I am going in tomorrow to meet him.  

     I would be curious to know what you see. It would be highly unethical for the listing agency to share with you offers made to a seller without the express written permission of all the parties concerned.

    The bank, the buyers making the offers, and their agents if not of the listing agency should have been notified and given express permission, in writing, to have an unassociated 3rd party review their offers. If that doesn't exist then the agents/agency may not play by the rules and you may want to reconsider moving forward with a transaction where they're representing you.

  • Greg H.Pro Member
    Moderator
    Broker/Flipper · Austin, TX · Member since 2013 · 4k+ posts · 4k+ votes
    11y

    This appears to further illustrate the point mentioned in other threads every day.  USE A BUYER"S AGENT

    With FNMA, on the vast majority of their listings the buyer's agent can bypass the listing agent and submit offer through Homepath.com.  As Mark indicated, multiple offers should have been subject to a multiple offer round

  • Investor · Rancho Cucamonga, CA · Member since 2008 · 1k+ posts · 684 votes
    11y

    I really don't how it is relevant at this point.  If the agent broke the rules what ramifications do you expect to help your position?

    1. Are you happy to pay 88k?  

    2. Do you really think the listing agent would ever admit what they did/didn't do to the Seller?

    3. Do you think the Seller will somehow lower their price 8k?

    You complaining and making accusations is going to stop them from ever doing business with you again.  

    I have been in your shoes many times with agents. They are all lairs to some degree. Your job is to make the best offer you feel comfortable with and not think about it anymore.  

    I have thought an agent was bluffing and missed a deal I would pay way more because I was testing them.  I have also moved my offer up in a highest and best scenario when I was the highest offer by over 10k.

    Your goal should be to have them like dealing with you so much that they give you last look on all the properties they can.  You'll win some and loose some, but the path you are taking right now isn't helping anyone.  

  • Rich N.Pro Member
    Investor · Haverhill, MA · Member since 2015 · 761 posts · 328 votes
    11y

    At this point, I would not let it bother you and dwell on it.  It is the time to decide if you want it or not.  Do the evaluation/math and either go forward or not.

    Take this as a lesson learn and as others have said, next time have your top price in mind and just let it go if they are playing a game.

  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    11y

    This is the perfect example of why buyers must use an agent.  You just open yourself up to being lied to too easily by a listing agent without your own agent.  You need someone in your corner working for you.  Your agent will know if it is likely if there really is another offer. They will know if the other agent has a reputation for lying.  Many investors think they can get a better deal by not using an agent, and this always backfires.

  • Investor · Lawndale, CA · Member since 2015 · 58 posts · 18 votes
    11y

    Frugal is an ugly word... in humor, I prefer to say that "I am cheap - in a good way!"

    I dislike the feeling of feeling ripped off so much that I follow my gut instinct. Give yourself permission to follow your gut. If you are wrong, what's the loss? Nothing. If you are right - that they took advantage of you - you will always feel ripped off and the taste of your purchase will continue to be bitter in your wallet. You want a screaming deal on flips. It sounds like you don't feel like it was a screaming deal by the end of negotiations. You have the chance to back out still. I would follow your gut.

    When I feel that someone is bluffing, I have no problem pulling out and offering my original amount "if the other buyer backs out". Most often, I get the call back. ;-)

  • Investor · Plano, TX · Member since 2015 · 74 posts · 22 votes
    11y

    Nat

    I think the situation boils down to these issues;

    1. Is the offer price you submitted a good enough price to make this deal work? if yes get on with the purchase, if not back out.

    2. Visiting the realtor will have a couple of outcomes, one they demonstrate other offers consistent with the negotiations and you default to question one. Or They don't and you are upset and still default to question one.

    3. Based on their performance in your visit, you can avoid them in the future, win them over to work for you or you can be annoyed.  All of this is about future future business so you default to question one again.

    But please let us know how this comes out, I am curious.

Join the conversationCreate a free account to reply, vote on answers and follow this thread.