Broker won't present letter of intent

17 Replies

So maybe biggerpockets can help me with this. I have a 70 unit building my partners and I have been running numbers on. We came to a few terms on our end and wanted to start a negotiating process but the broker said he refused to present our letter of intent. What are some suggestions do you guys have as to how to handle this?

I don't know if they can refuse to present an offer.  As a broker in Minnesota my understanding is you have to present offers asap.  I could be wrong since I mainly manage properties.

I believe it is unlawful for the listing agent to withhold any written offer.  They must be presented to the seller in a reasonable time frame.  Maybe some licensees will chime in.  I don't play in that world at all. 

 What are you supposed to do, report them?  Talk about a bad way to begin negotiations!    

Why do you think he won't present your LOI? Did you ask him? Is your offer substantially less than asking? Does he think you can't close? Have you included proof of funds or financing with the LOI? Have you considered sending the LOI directly to the seller?

As a licensed agent in CO, I am required by law to present all offers. I wouldn't bother with this guy, however and would find a new agent. Is this the listing agent or your own agent? If it is the listing agent, I would let the sellers know their agent is withholding offers. They deserve to be represented competently.

This post has been removed.

It is in violation of the law for him to refuse to present your offer. He is obligated to present all offers to the seller. 

The OP said "the" broker, not "our" broker, which leads me to believe he's talking about the listing broker? Perhaps this offer does not meet minimum standards that the seller has already told the broker. It wouldn't be odd for a seller to tell their broker vet offers for seriousness and the buyers apparent ability to perform before submitting them. 

The obvious way to "handle" this is to just talk to the broker and ask what's up.

You have, frankly, gotten some crappy advice on this thread.  The exception is Jean's post.

Sellers can (and absolutely do, all the time) tell their brokers not to forward on offers that do not meet certain criteria.  When I sell a property, my broker is empowered to formally reject insufficient offs on my behalf.

@RichardC is absolutely correct. A principal owner can provide instructions to his broker how to handle offers that meet certain criteria, at least in CA.

Without those specific instructions a broker is obligated to present all offers received in a timely fashion.

You might ask the broker why he's withholding the offer from the seller. Baring his insolence you should expect at least an explanation. If you don't receive one then call his managing broker and explain why you're seeking his intervention.

Holding hands with @Jean Bolger and @Richard C. . I regularly put language in listings about my ability to refuse certain types of offers, think wholesalers. Even without that, an LOI is not an offer, and a 70 unit is not a SFR most agents play with and then uses and standard procedures are different. The only liability of "not presenting an offer" is from the seller side.....I love when wholesaler yahoos try the "you must present all offers" crap, yeah right, just like I'm going to let let you tie this property up with no ability or intention to buy.

However, if you have shown a reasonable ability to buy, you need to know what the objections are.

Is the LOI sufficient? There is a difference between a LOI and offer. An offer would be a contract to purchase, provide timelines, provide for acceptance and counter offers, purchase price, earnest money etc, Unless your LOI has met the general requirements of an offer to purchase, I don't believe the broker has any responsibility to present it.

@Account Closed what was your offer?? and what was the asking price?? 

Richard is correct, John is correct in that a LOI is not usually a binding contractual offer, others as well along those lines.

Unless the agent has been given instruction to the contrary, an agent is to disclose all information gained that may be significant in a transaction, including information that may lead to any transaction. IMO, a LOI is significant and should be presented.....unless the owner(s) instructed the agent to weed out the lame and only present offers meeting their guidelines.

You might ask that agent if he has specific requirements by the owner(s) concerning offers and ask what those requirements are, like show me their requirements. 

There is always a fine line with respect to ticking off a listing broker, cross it and they can kill almost anything except a full price offer. You can inquire, but don't tick them off.

If there is no satisfaction, there is always the RE Commission, but going there means kissing that property good bye I'm sure (as well as any future properties that agent may be involved with). :)   

@Account Closed I once ran an experiment where I sent 500 offers to 500 different agents (over the course of about 6 months). Every single one told me the seller had rejected the offer. So I contacted the sellers directly and discovered that only 2 had actually received my offer.

Yes you read that right. Only 2 agents out of 500 actually presented my offer.

Although it's true that agents can be empowered by their clients to reject certain offers, there is no way on God's green earth that 99.5% of all sellers do so. Besides, the agents I ran the experiment on didn't say they wouldn't present my offer, they lied and said that they had.

As a result, I don't involve real estate agents in my business at all now. I market directly to the sellers of listed properties, if we come to an agreement then they can either pay their agent themselves, or wait for the listing to expire.

Doug some have language that even if the listing expires unless the seller relists with another broker there is a protection period built in for the brokerage to be due a commission.

In GA for commercial real estate not residential as a broker I can lien a property to stop a sale from occurring if the seller is doing any funny business when I am owed a fee.

I am sure we can all give incompetency stories from people who are investors, brokers, agents, etc.

The laws vary state to state on presented offers. So everyone really needs to know their state specifically as the details matter.

Sly the first thing I do to cut through any BS for my client is have the buyer " show me the money ".

Do you have banks statements with you and your partners name valid within the last 30 days with a down payment sufficient to buy the property??

The seller might have told the broker ( no creative finance, no seller carryback, etc. )

At this point I wouldn't get stuck on they will not present the offer. I would ask what does the seller not like about the offer??

Brokers get lot's of crap offers and if the clients have said do not bring me this and this that is the sellers choice. 

    

@Joel Owens Although that's true, you and I both know most brokers will not press the issue if they can't prove they were the procuring cause. Placing liens or taking clients to court isn't generally good for public relations.

I can see that being more likely in the commercial market where the commissions are so much bigger. But I generally only buy below average priced homes.

Yes my deals are generally over six figures in commission per transaction. I mention to seller that I can lien a property to stop a sale if any funny business.

They do not usually have a problem with it. The time they have  a problem is if they are thinking of playing games even before you get the listing. In that case it's better to know upfront their intentions before spending an ounce of time and energy marketing the property or using your connections or resources for their benefit. 

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here