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?
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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.  

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

    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.  

     Great points and advice there Steve.

    I think the bottom line is I don't think it's a great deal at 89K.

    Unfortunately I will never be able to work with this agent again.

    Although if they have a stellar property I want to buy in the future, I'll just have a buyers agent submit an offer using an LLC as the buyer.

  • Investor · Chicago, IL · Member since 2012 · 26 posts · 6 votes
    11y

    Nat - I see your point on the listing agent not having to split, but this comes with risk as now the listing agent would look to maximize as there is no other side representation to keep it "reasonable".  I think others have stated this more than once.

    Likewise, I would walk if it goes over my parameters and keep on good terms and if this action prompts the listing agent to prompt why you walked, I would take that opportunity to explain to him/her what I am looking for and go from there.  Ultimately, this will be a lesson for everyone involved.

    Hope everything goes well, 

  • Investor · Sarasota, FL · Member since 2014 · 13 posts · 3 votes
    11y

    @Nat C.

    You need a strong agent that has relationships with the REO listing brokers in your area. The ones in my area stretch the truth constantly, withhold offers, break deadlines. I have worked with them enough to know all there tricks. The one thing I cant express enough is get everything in writing. I don't make verbal offers or verbal counters. If the deal is not written it does not exist and then they can spin it however they want. Now when they see my contracts come over I get a prompt response and we don't play games.

  • Rental Property Investor · Yardley, PA · Member since 2008 · 1k+ posts · 561 votes
    11y

    How would a buyer's agent help here? I too find it amazing that a property that has sat for 2 months suddenly has "multiple offers," yet we as the buyer can never truly know if this is true.

  • Realtor · Atlanta, GA · Member since 2015 · 693 posts · 357 votes
    11y

    It sounds like they lied and used phantoms bids to drive up the price. Definitely illegal and you should take action on it.

  • Residential Real Estate Broker · Birmingham, MI · Member since 2014 · 179 posts · 54 votes
    11y
    I have negotiated and purchased HomePath properties and they all use the automated bidding system with a structure including various rounds ending with H&B. Seems suspicious the realtor took these negotiations offline.
  • Real Estate Professional · Winston Salem, NC · Member since 2015 · 7 posts · 1 vote
    11y

    @Nat Chan

    I've been a Fannie Mae listing agent for a number of years, and what Mark said is absolutely the course you should take. Fannie Mae has very specific rules about how multiple offers are handled, and divulging other offers is expressly forbidden. Call the fraud hotline. On another note, the agent is not authorized to negotiate like that on Fannie Mae's behalf, the sales rep is the one that counters offers, so if he's lying about multiple offers in an attempt to bring your offer up, he's still in the wrong. If he's acting in an unethical manner that's contrary to what Fannie Mae expects, they'll want to hear about it.

  • Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
    11y

    Early on I had several of my offers on properties that had no activity for a long time suddenly receive offers when I submitted mine.  I would look later to see what was paid for the property I lost out on, and it would be within $1k of my offer.  It was so clear that the offer I painstakingly submitted was shopped by the listing agents.    

    Thirteen years later I am the largest unit owner in a small town nearby and receive fliers from agencies wanting to manage some of my stuff.  I still don't/won't use agents or brokers at all, for any reason. In fact, I am one of their largest competitors.  Wonder why, right?   

    I'm sure there are good brokers out there, especially here on BP.  My growth was slowed significantly over the years I am sure, but like how @Nat C.feels, on principle, I cringe with the prospect of working with any of them in any way. Cheers!

  • Real Estate Broker · Anchorage, AK · Member since 2015 · 170 posts · 46 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. 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?

     Hey, I might be jumping in late here. I know in my state that you can legally tell other people what offers are on the table, as long as the seller is allowing you to disclose. Check with your state's Real Estate Commission on what is legal. Also, price gouging, no matter where you are, is illegal. In future events of a multiple offer situation, you can put in an escalation clause which asks for proof of an offer so you know you're not being taken. It sounds like it's a totally possible thing, but then again, there are shady people out there in the world! Good luck!

  • Visalia-Fresno, CA · Member since 2009 · 1k+ posts · 863 votes
    11y

    @Nat C.

    Your not screwed.  You playing a game.  Get the deal in escrow.  Send the bank a request for repairs and play with them when you control the deal.

    Another note is I have paid over asking price because the deal made financial sense. 

    Owning and controlling real estate is a roller coaster ride.  Hang with people that won't throw up on you.

    Frank

  • Investor · Miami, FL · Member since 2013 · 807 posts · 475 votes
    11y
    Frank, I'm pretty sure Homepath/Fannie doesn't do repairs. You can ask for closing costs to be paid but that's the only negotiating they're open to.
  • Lancaster, PA · Member since 2014 · 29 posts · 4 votes
    11y

    @NatChan, I understand where you're coming from,not wanting to deal with somebody who's lied to you. "If you're not part of the solution, then you're part of the problem." Being part of the solution means doing what you can to discourage unethical behavior - reporting the agent, refusing to deal with him. Unfortunately, bs is part of salesmanship, and if you insist on complete honesty, there won't be anyone left to work with. You have to pick your battles. I struggle with this all the time, and not just in real estate.

  • Investor · Minneapolis, MN · Member since 2015 · 173 posts · 53 votes
    11y

    I just experienced a similar situation but in my case having a trusted buyer agent didn't help me. When my agent contacted them to put in my offer and they said an offer was in and wanted a higher offer so i raised my price 5k. When agent called again got the assistant and assistant made it sound like there was no other offer. My offer was accepted now waiting bank approval. Lesson learned don't trust what they say. 

  • Severna Park, MD · Member since 2013 · 7k+ posts · 7k+ votes
    11y

    An agent tried that with me in 06 on my residence , said they got a better offer , I said ok , well keep mine and if it falls thru call me .  Three months and 2 price drops I got a call . Are you still interested in the house ?  I said yes , but drop my offer $25K .  Settled in 30 days . It pays to be patient .

  • Real Estate Transaction Engineer · Jacksonville, FL · Member since 2014 · 271 posts · 74 votes
    11y

    Hi @Nat C. I would stay away from using LA to represent the deal. If you are paying their commission, why not hire a BA to represent your best interest? The LA will NEVER do that and only looks out for their client. They can also confirm that everyone is not stepping out of bounds. You do have leverage with a BA when it comes to LA, no matter who they represent.

    Others have already given you wisdom advice on how to proceed with such deals, so I won't repeat. However, I know the agencies (HomePath/Fannie May) have certain restrictions and limitations that are adhered to. that could answer for their urgency. Also, too many investors are bidding on these properties as there are some attractive incentives. So, it's quite possible that someone has a higher price in mind and outbidding you because they like the deal, for whatever reason. It's too much trouble and your time is more valuable than to squabble about such things. Learn your lesson and understand who you are dealing with and move on. However, that agent may be representing a number of homes that are on your radar. You may run into them again.

  • Investor · Tacoma, WA · Member since 2014 · 54 posts · 11 votes
    11y

    you can back out! Never settle on a single property! If the numbers suck drop it!!

  • Investor · Aberdeen, MD · Member since 2015 · 1 post · 0 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.

    What did he suggest was your reason for increasing your offer twice when you were never given any info about other offers?

  • Investor · La Jolla, CA · Member since 2015 · 20 posts · 4 votes
    11y

    Nat Chan,

    As an agent I know personally this does happen unfortunately.  In California, it isn't actually illegal to tell what other offers are on the table, though most agents believe otherwise.  I understand how you may want to back out because you feel manipulated.  I would suggest, before backing out, consider how much the deal could make you.  If your profit margins are not high enough after coming up in price, then back out and move on to the next deal.  

    Sometimes we have to pay $7k more to make $30k, for example.  But in the end if you pay more, you're still up $30k rather than backing out and making absolutely nothing.  Put the ego aside and focus more on your profit margins rather than how much you had to come up in price because the agent pulled a fast one on your.  The fact of the matter is that in the end you are still likely to make more money than the agent does off the deal.  Best of luck.  

    Karl

  • Investor · new york, NJ · Member since 2014 · 137 posts · 13 votes
    11y

    you are the negotiator - you can say no at any point - as others said - you decide what your top offer is and that is what you should stick to. the agent might have actually been trying to help you - your own DD and communications w/agent are paramount - sounds to me like you were spooked and now have remorse - that is you and not the agent. the other good advice was do the deal (or not) and move on.

  • JD MartinBusiness Member
    Moderator
    Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
    11y

    I would walk. You allowed yourself to be bamboozled into paying more money. Your discomfort is your gut telling you that you were bamboozled. Let them sell it to the supposed higher offers.

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

    I went into meet with the director today. It was an absolute farce.

    He started yelling at me and saying I made accusations against them because they were black.

    He said that the whole thing was based on racism and I thought I was superior because I was white and that blacks have been downtrodden for too long. He said I would not have gone into a 'white office in Brickell' and made similar accusations.

    I was pretty shocked as obviously race or skin color had nothing to do with it.

    I said that I didn't even notice people's skin color and I own properties in Overtown and Little Haiti so I don't think I'm superior to black people. He responded with “So you're happy to make money off our people?”

    I told him I also lived in Little Haiti and only then did he seem to relent a bit.

    As far as 'showing me the other offers', which the meeting was meant to be for, he waived some pieces of paper around in my face and didn't even let me look at them properly.

    He continued yelling various things for a long time, like 'You didn't call us the N word directly, you just degraded us subtlety'.

    I said “I think you're playing the racism card to try to divert from the truth”.

    After the yelling continued for some time, I got up, thanked him for his time and walked out. It was bizarre.

  • JD MartinBusiness Member
    Moderator
    Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
    11y

    I assume you then withdrew your offer? 

    Skyline Properties
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  • Real Estate Agent · Weatherford, TX · Member since 2011 · 726 posts · 284 votes
    11y

    What the hell?

  • Miami, FL · Member since 2011 · 200 posts · 42 votes
    11y

    Sounds like he was trying to divert attention away from the fact that he fabricated those other offers.

  • Andrew SyriosPro Member
    Moderator
    Residential Real Estate Investor · Kansas City, MO · Member since 2014 · 10k+ posts · 5k+ votes
    11y

    It's very odd that the agent told you the other offers, which as you say, they are not allowed to do. The timing is also odd and the pressure to buy it when it was at 88K isn't kosher either. Unfortunately, it's hard to tell whether she was just being a bit slimy or actually lying about the other offers. As others mentioned, you can make a complaint to the real estate board. Fannie Mae is a nightmare to deal with I'm sure, but you might be able to get ahold of someone for their asset manager to see if there were indeed multiple offers. That would answer that question at least, but getting through to the right person at Fannie Mae or their asset manager, is probably, as I already stated, a nightmare.

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