Realtor Lied - Ethics Question

24 Replies

We wanted to put in an offer to buy a condo which was just put back on the market after a buyers financing fell through.  Our realtor spoke with the sellers realtor and the sellers realtor said that no offer will be accepted unless it is equal to what the last potential buyer offered, or higher.  Our realtor asked what the last buyers purchase offer was and the sellers realtor said it was $85,000.  We spoke with our realtor and agreed that we would go ahead and match that offer. Our Purchase agreement was submitted and accepted. Just got the closing packet to review from the title company...and they messed up.  All documents were fine, EXCEPT...the title company accidentally put in the previous buyers purchase agreement instead of ours!  AND...we saw the price that the previous buyer offered was LESS than what the sellers realtor told our realtor.  The offer was for $84,500.  BUSTED! So, she lied about what the previous offer was and bumped up the price by $500.  We feel that the sellers agent misled us and was not honest!  We were really ticked off! We had our realtor tell her we saw the purchase agreement from the previous buyer which was sent to us by mistake within the closing documents we were going to review from the title company, and the sellers realtor acknowledged that the offer was less than what she told us, but said she "made a mistake by quoting us the higher price because she was busy".  We told her that we felt she misrepresented the facts and that the extra $500 should come out of her commission and paid to us because she misled us.  We feel she purposefully lied and told us the higher amount.  She then stormed away and said she has to ask her broker about paying us the $500 out of her commission.  Her broker called our agent while we were all together and began ranting about how we already signed the deal and agreed to the price and she wasn't going to give us any commission or any payment at all to compensate for the $500.   Any suggestions on what to do about the fact that she lied about what the previous buyers offer was?

Completely absurd youd be upset over this. I never speak in terms of prices down to the hundreds of dollars. In fact I often dont even speak as specifically as to the thousand. I usually speak in terms of the closest $10,000 amount. Further, you can out in an offer at any amount you want and see if its accepted. Even further, that listing agents job is to get the highest price possible for their client. Their job is to work against your best interest, and in the best interest of the person paying them. And even further, price isnt the only thing that makes up the offer. Terms are. For instance a VA loan nets less to a seller than a conventional loan and so on and so on.

My suggestion is if you are upset over $500, you shouldnt be buying real estate. I hate to sound harsh, but you need to get in touch more with how this all works.

Also for what its worth, a listing agent can not credit a buyer any money, nor can a buyers agent credit a seller any money. Illegal.

I'm probably going to ruffle some feathers, but... Your agent asked the listing agent to violate her fiduciary duty to her client by disclosing confidential information and then you are surprised that she was not honest with you. Although, I feel $500 on an $85,000 transaction is a pretty easy error to make, and at 3% she will only make $2500 before any fees...wait! wait! For the record $2520 to be accurate. If an agent betrayed her client with insider information for only $500, I would consider that a good deal. If anyone is to be upset it should be the seller.

As always, seek professional advice.

@Sandy Brown Tell the broker the real estate commission will find this to be an interesting story.

I am not a broker but if I was I would say "I am sorry one of my agents made a mistake that will cost you money, i'll  not only give you the $500 but I will make it $600 because you deserve better service when working with  me or any of my agents. "

It amazes me when professionals don't want to be responsible for their mistakes when they have so much at risk. The angrier the broker seems the more trouble he is already in.  I'd say "Wow that seems to be a hot button for you. I guess the real estate commission is already on your back."

My philosophy here on BP is to help the person who asked the question. I try to hep even if it is an issue I personally wouldn't worry about. Russel I agree if you are worked up over $500 you probably shouldn't be in real estate. 

@Russell Brazil   you know I respect you but I have little tolerance for professionals that do not act professional. @Matt Shields Whether the agent broke her fiduciary duty to her client is a totally separate issue. The agent has a legal duty to be honest and fair with the pubic. 

The Agent Lied and got caught. The agent Broke the law. And now you think the measly $500 shouldn't be credited back to the buyer. If it is an insignificant number to the buyer it is just as insignificant to the agent/broker.

PPS @Sandy Brown I see it is your first post so welcome to BP. As you an see you will get a variety of opinions here.

Originally posted by @Ned Carey :

My philosophy here on BP is to help the person who asked the question. I try to hep even if it is an issue I personally wouldn't worry about. Russel I agree if you are worked up over $500 you probably shouldn't be in real estate. 

@Russell Brazil   you know I respect you but I have little tolerance for professionals that do not act professional. @Matt Shields Whether the agent broke her fiduciary duty to her client is a totally separate issue. The agent has a legal duty to be honest and fair with the pubic. 

The Agent Lied and got caught. The agent Broke the law. And now you think the measly $500 shouldn't be credited back to the buyer. If it is an insignificant number to the buyer it is just as insignificant to the agent/broker.

PPS @Sandy Brown I see it is your first post so welcome to BP. As you an see you will get a variety of opinions here.

 I just think the wrong person is upset. The listing agent soldout her client for a measly 500 bucks. That kind of information is gold, the buyer got it cheap and should be thanking the selling agent. No competent/trustworthy agent EVER gives out confidential information about their clients.

Originally posted by @Ned Carey :

My philosophy here on BP is to help the person who asked the question. I try to hep even if it is an issue I personally wouldn't worry about. Russel I agree if you are worked up over $500 you probably shouldn't be in real estate. 

@Russell Brazil  you know I respect you but I have little tolerance for professionals that do not act professional. @Matt Shields Whether the agent broke her fiduciary duty to her client is a totally separate issue. The agent has a legal duty to be honest and fair with the pubic. 

The Agent Lied and got caught. The agent Broke the law. And now you think the measly $500 shouldn't be credited back to the buyer. If it is an insignificant number to the buyer it is just as insignificant to the agent/broker.

PPS @Sandy Brown I see it is your first post so welcome to BP. As you an see you will get a variety of opinions here.

 I completely disagree here. Saying something was under contract at $85,000 if it was $84,500 is not a lie or breaking the law.  Id be in jail on a daily basis for saying numbers that were not exact if it were the case. Absolutely nothing here described even touches on sounding the slightest bit unethical. This doesnt even sound like a gray area to me, its 100% black and white.

I agree with Russell that the offer price can be significantly different than the net proceeds. There are many, many things that can affect the final price. Selling my own properties I often pick an offer that is less than another because I will end up netting more, or I may adjust the price in a counter offer because of terms in the contract. For example, a faster COE saves me carry costs. Some loans require the seller to pay for appraisals and other costs. The loan may not be solid. Many buyers ask for seller paid concessions or closing costs. Often a contingency must be cleared. The possibilities are endless. So an $85,000 offer is probably not an $85,000 offer. To be accurate.

@Sandy Brown   I'll disagree with a few of my esteemed colleagues here.  My practice is to be scrupulously honest without exception.  If I can't trust you in the little things, I can't trust you in the big things either.

The Realtor Code of Ethics states that you must be truthful.  The $500 lie is a relatively small one, but it's still a lie, meaning that it is a clear violation of the Code of Ethics.

While the seller's agent does have a duty to get the best deal (price, dates, terms) for the seller, she cannot lie to do so.  Parenthetically, that's the kind of thing that leads to idiotic statements like the one @Jacob Villalobos made above.

Whether you pursue this is up to you.  As a matter of principle, I probably would.

Your options are: 1. A formal complaint to the real estate commission.  2. Small claims court - here in MA, you could sue there and ask for triple damages.  3. Expose the agent and broker on social media, which I normally wouldn't recommend, but you actually have indisputable proof.  That means that charges of slander are going to fail because truth is an absolute defense.

By the way, if I were your agent, I would have asked the seller's agent to show us the failed offer before agreeing to match it.  The other thing to dig in to is WHY the previous buyer's financing failed.  It could have been that the unit would only appraise at $80,000.

And @Matt Shields is right.  The seller's agent tipped their hand to the detriment of the seller.  What if you were ready to write an offer at $89,000?  She sounds like a real gem.

@Sandy Brown Is $500 really worth it to lose a deal? Honestly, I feel super annoyed when GCs, relators and other folks try to rip me off. It ruins my mood and my day. 

But you gotta let it go. Trust me, $500 is not worth your peace of mind, emotional well being and happiness.

@Sandy Brown I personally wouldn't make a big fuss about it, id rather spend the extra $500 then go through the hassle.

I do however agree with @Charlie MacPherson and @Ned Carey it goes against everything I believe in. You have every right to be upset, but to make a big deal over it is a personal preference. Personally id just let it go, and remember who the sellers agent was for future reference. 

@Ned Carey   @Russell Brazil   I will take the middle road here.

the listing agent is not allowed to tell the buyer what the past offer was

if the buyers agent wanted that info.. they should have requested a copy of the previous contract with the personal info redacted.. for proof of what it was in contract for.. and there might have been an addendum we don't know about or an inspection credit you know those little things. 

this does crack me up.. though a wholesaler NEVER or at least would never divulge what they are paying and are trying to make more than a real estate fee most of the time..  but here we are frying the agent over 500 bucks.

but the listing agent should have just said none of your business.. make your offer  or the redaketed contract.

My wife taught me the redackted trick she always asks for that in highest and best situations.. 

Geeze,  cry me a river.....I’m holding hands with @Russell Brazil On this one...

—you agreed to offer $85k and were happy with it

—if he mistakenly said $84k instead of $84,500, and the seller agreed to $84k, then you saw the old agreement, would you be insisting on giving the extra $500?

—as an agent I wouldn’t have said $84,500 or $85k, I’d say “you’ll have to be close to $90k for it be accepted”

I feel as if shes justified in being a little upset, to the extent she is, definitely not. Im just starting out so I obviously don't have the experience most of you have, but that $500 goes a long way for someone like me. With 20% down its only a difference of $100 on the down payment, but that $100 could have bought the toilet that needed to be replaced. 

I have respect for all of you successful investors on this sight, I really admire what you guys do, but this is just a point of view coming from somebody with far less experience. And from someone whos first investment deal came down to a few hundred dollars just a month ago. 

@Wayne Brooks @Tom Gimer   I guess I'm old school.  Honesty is an absolute, especially if you value your reputation.

It's not the $500 that would bother me as much as the blatant DOCUMENTED lie.  It's no a he said / she said - they have the actual previous offer in hand.

If I were representing the buyer, I'd go after the agent first and the broker second to get that $500 back for my client.  

If they refuse to make it right, I'd file a complaint with the Board of Registration.

Originally posted by @Carl Fredrickson :

$84,500 rounds to $85,000. Unless the actual bid was $84499.99 or less, which would round to $84,000. 

As an non-involved party, this looks like rounding error, not a lie.

 Thats my whole point. People dont speak in specifics dollar numbers, they speak in rounded numbers. Does this person get upset too when they go to Target and ask how much something is and the guy says "twenty bucks" then throw a fit when they get rung up and it's $21.13. 

 20 times a day I, and every agent....and every american throw out numbers in conversation that are rounded. When you do that, it is in no means a lie or unethical in any way.

And sometimes people do just make an honest mistake.  Never made one?  The evil mastermind listing agent lied about $500 why, so that she can make another $8 in commission?  Why always assume the worst about someone.

Originally posted by @Charlie MacPherson :

@Sandy Brown   I'll disagree with a few of my esteemed colleagues here.  My practice is to be scrupulously honest without exception.  If I can't trust you in the little things, I can't trust you in the big things either.

The Realtor Code of Ethics states that you must be truthful.  The $500 lie is a relatively small one, but it's still a lie, meaning that it is a clear violation of the Code of Ethics.

While the seller's agent does have a duty to get the best deal (price, dates, terms) for the seller, she cannot lie to do so.  Parenthetically, that's the kind of thing that leads to idiotic statements like the one @Jacob Villalobos made above.

Whether you pursue this is up to you.  As a matter of principle, I probably would.

Your options are: 1. A formal complaint to the real estate commission.  2. Small claims court - here in MA, you could sue there and ask for triple damages.  3. Expose the agent and broker on social media, which I normally wouldn't recommend, but you actually have indisputable proof.  That means that charges of slander are going to fail because truth is an absolute defense.

By the way, if I were your agent, I would have asked the seller's agent to show us the failed offer before agreeing to match it.  The other thing to dig in to is WHY the previous buyer's financing failed.  It could have been that the unit would only appraise at $80,000.

And @Matt Shields is right.  The seller's agent tipped their hand to the detriment of the seller.  What if you were ready to write an offer at $89,000?  She sounds like a real gem.

While the strategy @Charlie McPherson suggests is technically correct, who has the time for such things? I laud his effort but by the time you step into court or file a complaint with the Real Estate Department...I'm already bored.

All that work for $500?

Also a ton of negative energy. I got better things to do with my time than chase money/people who are not going to do business in good faith and honesty. Obviously the biggest loss is to the agent and the opportunities he/she will be missing out on because I no longer wish to do business with them. My money is my vote.

The job of a salesperson is to sell. You don’t sell you don’t eat. Some are ethical but many are not. Trust but verify and stay focused on the big picture.  

Thats such a close #, there's no way that listing agent was trying to be malicious or deceitful..  Nobody wants to give away $500 for no reason, but be happy you got the condo and be happy the agent wasn't really being dirty and told you 90k, or take a hike..  

Some folks in this thread have said that its not legal for the listing agent to disclose past offers etc..  Thats not necessarily true..  If the seller gives the listing agent permission to disclose offer amounts or other numbers related, the listing agent can certainly do that..