Lost a bid on multi family and need advice from BP community

Lost a bid on multi family and need advice from BP community

Realtor · Monmouth County · Member since 2020 · 95 posts · 37 votes

I made two offers on a multi family property directly with the listing agent.  On the day she set up for me to see it she brought another couple whom she seemed to be very cozy with.  I don't know this realtor and know nothing other than the fact that she was the listing agent to this property.  I saw the property and I immediately told her I wanted to make an offer.  She told me to text her my offers and she would submit.  I was kind of skeptical with the whole situation being that I saw how friendly and chummy she was with the other couple and very dry and stand-offish with me.  None the less, I text her my offer right there and than.  I made one offer a cash deal  for 15k less than asking price   and the other offer regular conventional mortgage at full asking price. She never had me sign anything in writing or asked me to put a good faith down payment to present the offer (I found this a bit weird, but whatever).  Two days later when I texted her if she heard from the sellers she told me the seller was not going to contemplate anything less than asking price and was giving me and the other people who submitted the offers one more chance to come back with best and highest offer. I was taken aback with what she said because like I told her, I gave the sellers full asking price! but she just repeated the same sentence that sellers were giving us all one more attempt at submitting best and highest offer. I did not want to play into a bidding war so I told her I stood by my two offers with the only change that I would take away the mortgage contingency on the offer with the full asking price.  Today I texted  her again to see if she heard anything from the sellers and she calls me back saying the sellers accepted another offer that was above asking price.

I want to ask the BP community if it would be wrong for me to write to the sellers directly and make sure they did receive my offers?  or would that be insulting the listing agent?  I mean, I don't know her and I do know plenty of shady brokers out there.  What do you think?  I can't seem to shake off this feeling like she might have witheld my offers or misrepresented what I offered to the sellers.   I have the sellers address.....  should I write them and ask  or just forget about it?

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Mike CumbieBusiness Member
REALTOR® · Brockport, NY · Member since 2015 · 3k+ posts · 4k+ votes
6y

HI @Yonia B.

Couple points take them for what they are worth.

- I recommend you submit full offers in writing on a contract. If I was the listing agent, I don't write up the offers, I present them. Me writing up a contract to present to my client just sounds like a nightmare I'll be dealing with later. "Mike never told me that I shouldn't make the deposit non refundable"

- Offers include many terms and conditions. My average contract is around 28 pages. Comparing "This one has an inspection, this one has a radon test, this one wants lease agreements, this one has a $5,000 EMD", to a text offer. A text offer is one step above verbal and 2 steps behind a signed cocktail napkin. If they received another full price offer on a standard contract (or even close), I can guess yours wouldn't mean much.

- I never recommend going to the sellers agent. They represent the seller. A buyers agent represents you. They would have ensured you had a good solid offer that presents well. 

- Did you ever show the agent Proof Of Funds? It's pretty much a requirement to be taken serious. Especially in a multiple offer situation. 

- On a hot property I show up with a contract mostly filled out for my client. If it's hot we sign on the hood of my Jeep and I give it to the listing agent right then. If we don't have one in writing, I hook to my phones hotspot and make it digital so my offer is within 20 minutes including everything we would need.

- Nothing saying you can't contact the owner. Just from the sounds of it don't know what good would come of it. If they did accept a contract that presented better at "Highest and best" than yours.

- Could the listing agent have helped you more, sure no doubt. However it's also not their place to help you craft your offer. If she knew about 4 other offers giving you any information could be viewed as unethical to some.

Good luck and go get the next one!

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  • Abel CurielBusiness Member
    Real Estate Agent · Queens, NY · Member since 2016 · 2k+ posts · 1k+ votes
    6y

    Hello @Yonia B.,

    Being that the agent represents the seller, this transcript seems pretty similar to what most brokers do in a multiple-offer situation. 

    You have nothing to lose by sending a letter to the purchasers. If you were another broker, I'd advise against this but since you're one of the prospective buyers that saw the house, I don't see an issue with that. I am not licensed in NJ, however, so I'm curious to read what folks in the area recommend.

    FYI - when you use a buyer's agent, they can submit your offer with an 'offer acknowledgement form" which requests signatures from the seller and seller's agent as confirmation that they were presented with the offer. 

    Best of luck to you on your next deal!

    Abel

    REbuild Team - eXp Realty5234 Reviews
  • Real Estate Broker · Portland, OR · Member since 2019 · 4k+ posts · 2k+ votes
    6y

    I want to ask the BP community if it would be wrong for me to write to the sellers directly and make sure they did receive my offers?

    I guess you could.  What would you say and how do you expect it to change anything.

    The other guy gets him $15K more for waiting 30 days (or however long financing) takes.  Sounds OK to me.

  • Realtor · Monmouth County · Member since 2020 · 95 posts · 37 votes
    6y

    @Steve Morris  You don't understand, I am okay if the seller got more money, as I refused to play into a bidding war.  as it was at full price I was only cash flowing $100.  My issue is, not knowing if in fact my offers were presented.   I have no way of verifying that they were indeed presented other than taking the listing agents word for it.  Remember, this agent was very and I mean very chummy with the other buyers.  My fear is that I got played by her and that the seller never got to see my offers.  I guess I will have to wait until they close to see if indeed the sellers got more for this property.

  • Real Estate Broker · Portland, OR · Member since 2019 · 4k+ posts · 2k+ votes
    6y

    OK, so you find out your offer wasn't presented IF they tell you.  Then what?

    I don't like it either as a broker, but I don't know how to fix exclusive listing agreements that allow that kind of BS.

  • Mike CumbieBusiness Member
    REALTOR® · Brockport, NY · Member since 2015 · 3k+ posts · 4k+ votes
    6y

    HI @Yonia B.

    Couple points take them for what they are worth.

    - I recommend you submit full offers in writing on a contract. If I was the listing agent, I don't write up the offers, I present them. Me writing up a contract to present to my client just sounds like a nightmare I'll be dealing with later. "Mike never told me that I shouldn't make the deposit non refundable"

    - Offers include many terms and conditions. My average contract is around 28 pages. Comparing "This one has an inspection, this one has a radon test, this one wants lease agreements, this one has a $5,000 EMD", to a text offer. A text offer is one step above verbal and 2 steps behind a signed cocktail napkin. If they received another full price offer on a standard contract (or even close), I can guess yours wouldn't mean much.

    - I never recommend going to the sellers agent. They represent the seller. A buyers agent represents you. They would have ensured you had a good solid offer that presents well. 

    - Did you ever show the agent Proof Of Funds? It's pretty much a requirement to be taken serious. Especially in a multiple offer situation. 

    - On a hot property I show up with a contract mostly filled out for my client. If it's hot we sign on the hood of my Jeep and I give it to the listing agent right then. If we don't have one in writing, I hook to my phones hotspot and make it digital so my offer is within 20 minutes including everything we would need.

    - Nothing saying you can't contact the owner. Just from the sounds of it don't know what good would come of it. If they did accept a contract that presented better at "Highest and best" than yours.

    - Could the listing agent have helped you more, sure no doubt. However it's also not their place to help you craft your offer. If she knew about 4 other offers giving you any information could be viewed as unethical to some.

    Good luck and go get the next one!

  • Theresa HarrisPro Member
    Member since 2019 · 15k+ posts · 11k+ votes
    6y

    @Yonia B.  Work with your own realtor when buying.  Then you know that they will present the offer and you don't have to second guess what is happening.

  • Real Estate Broker · Portland, OR · Member since 2019 · 4k+ posts · 2k+ votes
    6y
    Originally posted by @Theresa Harris:

    @Yonia B.  Work with your own realtor when buying.  Then you know that they will present the offer and you don't have to second guess what is happening.

    Presenting the offer to the selling broker isn't the problem.  Getting it to the seller is the issue.

  • Colleen F.Pro Member
    Investor · Narragansett, RI · Member since 2013 · 8k+ posts · 4k+ votes
    6y

    The sellers agent is obligated to present written offers. We have submitted written offers when we knew there was competition.  Competition can fall through and having an offer already on the table can work in your favor when it does.  Was your offer ever written as a contract?

    The place for back of the napkin offers is when you aren't sure your offer will even be entertained.

  • Rental Property Investor · Northern NJ · Member since 2019 · 672 posts · 677 votes
    6y

    I'm surprised no one has mentioned this but NJ is very, very competitive right now. Have you thought maybe your offer isn't as good as you think? 

    In my NJ area a full priced offer is a dime a dozen, so its worthless. And a cash offer of 15k less than asking is comic relief. I dont have any direct knowledge other than what I've read which is AC is pretty hot. I think you need to temper your expectations for the moment. 

    Your profile says AC so I assume that's where you're referring to. 

  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    6y

    This is hillarious. You have the chance to improve your offer in a multiple offer situation, you don't, someone else buys it and you think something shady is going on?

  • Dan H.Pro Member
    Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
    6y

    In your case the seller's RE agent would have represented both buyer and seller.  They likely had no financial reason not to present your offer and it sold for more than your offer.  There is no evidence that your offer was not submitted and I suspect your offer was submitted.

    A while back (~5 years ago) we made an initial offer $50K over ask.  The sellers RE agent verbally told us they got our offer.  It sold for just over our offer price.  We would have been willing to increase our offer.  I would have been willing to remove the appraisal contingency.  We expected with our offer $50K over ask, that if our offer was not accepted that at least we would get a final/best request.

    Our RE agent speculated that the other agent had their own buyer.  The agent made the case for the other buyer.

    I suspect nothing is illegal in the selling agent's actions.  Maybe not the most moral, but assuming the agent presented our offer, which I believe to be the case because the other offer was just above our offer, then I think they met their legal obligation (but the agent could have gotten the seller a higher price and did not pursue it).

    This was maybe 5 years ago.  Not a single similar RE (2 units) has hit the market in that entire city in the last 5 years.  I believe it is the only true duplex to quad (not ADUs, casitas, mother-in-law suite, but a true multiplex) to sell in Poway, CA in at least the last 10 years (which is why we wanted it bad enough for our opening offer to be $50K above ask).

    I suspect the sellers RE agent presented your offer.  The agent may have had an existing relationship with the other buyer.  The other buyer offered more than your best/final offer.  I am not sure what your complaint is.

  • Ned CareyPro Member
    Moderator
    Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes
    6y

    @Yonia B. asking for "Highest and Best Offer" is very common. It is extremely common in today's market. We ask that on many of our properties.

    The seller's agent has a legal duty to get the seller the best offers he or she can. Now depending on state law the seller's agent may have had a legal duty to disclose who they are representing. But pursuing this or complaining won't gain you anything.

    Some of you ideas can work in a slow market. In today's market they are just unrealistic. 

  • Realtor · Monmouth County · Member since 2020 · 95 posts · 37 votes
    6y

    I'm not complaining, like I said, if the seller got a higher offer than the one I made, great for them.That full asking price was my walk away price and I was not going to get into a bidding war because anything over that amount would put me in a negative cash flow. I was just surprised that the listing agent did not write up a contract or some form of paperwork of my offer; she did not have me sign anything or request a check from me.  All she said was for me to text her my offers.  That is it.    She came to the showing of the property with this couple who clearly she was very friendly with and she acted very cold and stand-offish with me.  I don't know if she had a personal relationship with the other couple but she certainly was very buddy buddy with them.     In any case, thank you all for your inputs, I have learned a lot and I just have to make sure the  next time I find a property that I want to make an offer on , I will take everyone's suggestion and be better prepared by making sure my offer is written or have the seller's sign that she/he has received my offer.

  • Rental Property Investor · Canton, OH · Member since 2020 · 58 posts · 22 votes
    6y

    @Sarah Bancob

    What do you have to lose? If the potential risk Is less than the potential reward I’d say write the sellers.

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