Can a Real Estate Agent hide the fact that a property is pending

Question

Hi everyone,

I am analyzing a deal in Washington State and I am curious about the following fact. I've been working with this real estate agent for over a month (at least) on a weekly fashion on this deal, but we haven't signed anything yet. I am in the phase of funding the project and the agent knows that.

Anyways, sometimes I've felt that the agent is been pushing to close the sale but I haven't payed much attention to it since for me the numbers have to make senses first and foremost. Then I met this other couple of agents and asked them to check at the same property because I didn't agree with the comps that the first agent gave me. I sent them the MLS# and they contacted the other agent to check that out.

For my surprise, the next day I received an email from the last couple of agents that I met saying that they contacted the other agent and that apparently the property has a pending cash offer contingent to a Feasibility Study that the buyers are conducting right now. While just one day before I received an email from the agent that I am working the deal with where she is asking me if there is any questions that I still have regarding the property.

Question: Can an agent hide to a client the fact that someone else has already a hold on to the property?

BTW, I am not the buyer making the feasibility study and, kindda like a disclaimer, I am new on how REA deal with negotiations.

Chris Mason · Answer

Sounds like someone else swooped in and got the seller to sign the line which is dotted before you did.

It's normal for sellers represented by a good listing agent to court multiple offers, the more the merrier. This includes getting buyers to throw numbers out, generate email correspondence, get everyone hyped up, etc, all of which can be used to get others to increase their bids. And so on. "Anything you say can and will be used" to maximize sales price. That's the listing agent's job.

Then once everyone has put their cards down, the seller cherry picks the best and signs that one.

That's just how the process works in a modestly warm or hot market. I'm not super responsive when clients start asking me or their agent more than one batch of questions about the property... by the time client is on their 3rd or 5th batch of questions, whoops, someone else already got the property. It sounds like that is what happened to you. We see this on a regular basis in the Bay Area and California in general, especially among FTHB, I'm given to understand much of Washington is the same.

In the future, get it under escrow ASAP. The old saying of "Victory to the Swift" applies here. As long as you have all contingencies in place, this isn't a risky thing to do.

Re: this --

If you spend too long and back and forth, allowing someone else to swoop it up, the "first and foremost" numbers are as follows 100% of the time:

• Cap rate: 0%
• Cashflow: $0/mo
• The good news is your interest rate is also 0%, and you are guaranteed not to ever have issues with bad tenants...

Andrew Hodgson · Answer

Hi @Jose Lira

For a transaction to happen a buyer's broker must bring an able buyer to the table. So without you being prepared to make real offers, unfortunately your broker can't do much more for you.

I would encourage you to continue with preparing your finances so that you can be ready to 1. jump in if this competing buyer backs out and the property comes back on-market, or 2. make offers on other deals.

If you are finding off-market deals, I suppose you could take more time to prepare/get creative with financing. However, for MLS deals I would recommend having your financing already lined up, so that you can be ready to make offers. There are a lot of buyers looking on the MLS at those same deals, so you gotta be ready to go (especially in King County).

All the best!

Aaron Nelson · Answer

@Jose Lira - could be a couple things going on. One is that the property was active when it was originally sent to you but another hungrier buyer snapped it up before you could get to it. I’ve helped my clients put deals under contract the first day the property was listed. I was in tune with what my buyer was looking for and he was able to quickly make decisions. The next day, after our offer was signed around, the Listing Agent commented that he received two other offers both higher than ours...Speed matters in real estate.

Another consideration: What website did you find this property on? Some websites are ridiculously slow to update a property’s status so it may have appeared active but was actually pending.

Ryan Arnett · Answer

@Jose Lira

I am a Real Estate Agent here in Washington State. It seems to me that the original agent you were working with was not hiding that it had gone pending, but it probably just changed status from active to pending in one day because the other offer came in after she checked the status. The buyer's agent would have no reason to hide the pending status because once it has gone pending you can no longer submit offers on that property unless the seller agrees to accept a back up offer. A back up offer is an offer that if the seller chooses to accept it, he will be under contract with you if the first transaction should fall through. But, for the most part most buyers choose to just search for a different property. Also, sometimes the listing agent takes longer than they should to change the status of the property on the MLS from active to pending. Usually the status is changed from active to pending inspection as soon as the buyer and seller has gone mutual, that is, they have a signed purchase and sale agreement. Anyway, I hope this helps you, and if you have anymore questions let me know. If the agent you are working with isn't quite working out, I would love to meet with you and help find you the right property.

Robert Freeborn · Answer

@Jose Lira

Hi Jose. So a contingent offer can be considered as still active in that they are actively accepting offers. However, if they want to accept a new offer they have to serve a “bump” notice to the contingent offer.

The bump notice basically means, “we have another offer that isn’t contingent. You need to either perform and buy without selling your home first, or back out”.

As to if your agent was honest with you, that depends on when the offer went pending. That is super easy to check though.

Shoot me a message if you have anymore questions and I’ll be happy to drill down with you on it.

Mindy Jensen · Answer

@Jose Lira , are you working with the listing agent or do you have a buyer's agent you're working with?

In my MLS, there is a 5 day grace period to update the listing after a change. It's entirely possible the listing agent used the entire grace period of that MLS to garner more interest. Many people stop looking at properties that are under contract.

Bob Okenwa · Answer

Did the new agents say when the property status had been changed. Is it showing as contingent or pending in the MLS? There is the possibility that your agent didn't see it and/or may not check the listing everyday. Or there may be the fact that your agent isn't very attentive.

The role of the agent is to put the interest of the client ahead of their own and act as a confidant and adviser. Unfortunately, this isn't the case with many agents. They usually don't answer emails and phone calls and can be inattentive when you need them most. If you feel your agent isn't helping you reach your goals, let him/her know at once and you can either give them another shot or take your business elsewhere.

Can a Real Estate Agent hide the fact that a property is pending

Can a Real Estate Agent hide the fact that a property is pending

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