Investor · Greenville, SC · Member since 2020 · 210 posts · 302 votes
So I just had a verbal off market deal in place with a real estate agent in the Smokies who owns a lot of his own cabins (this is not someone who is active here!). I saw the property today while I was in town, agreed on terms (everything including days to close and earnest money), and he had me text him all my personal info so we could work up a contract and sign within the hour. I decided to pull over in a restaurant on my drive halfway back home to Virginia to wait for the contract to come in, and boom, I get a Zillow app alert that the property I had agreed to buy from this guy suddenly hit the MLS $50k over our agreed to price. I called him up, and he was basically like "I realized that I can probably get more, you can still submit an offer and we can see what happens."
This is my first foray into off market negotiations. Is this normal? How do people reputationally get away with this stuff?
And that's the problem with where our world has devolved to....A man's word used to be good. Now it's not and most people on the forum thinks that is fine. Sad.
@Wilson Hunter I understand both sides here. The big issue with real estate buyers and sellers is that they do a transaction so rarely they don't care about or have a reputation to worry about. If you only sell a house once every 10 years, then why care about how you behave towards others or their perception of you. At least that's the mindset of many people like your seller. Its unfortunate folks act like this but nonetheless its just reality.
This isn't scummy realtor behavior, this is scummy person behavior. I understand him wanting more for the property but he should've at least acted like an adult and informed you of his decision.
@Wilson Hunter Sorry to hear this but yes it’s completely normal for verbal offers to fail. They say verbal offers are not worth as much as the paper they’re not written on for a reason. Another saying is buyers are liars and sellers are worse. Sometimes I float verbal offers just to make sure it will be worth writing up an actual offer, but I would never consider a verbal agreement anything more than an opening up of negotiations. Get it in writing! Truth be told I don’t consider a deal a deal until the closing table when everything is signed, deed and keys are in hand. Sometimes deals fall through even at the closing table. When I have a listing and someone says they’re going to send an offer for X amount, I don’t even tell the seller until I actually receive the written offer and verify that the potential buyer has the ability to close, because I don’t like to get the sellers hopes up for an offer that may or may not ever materialize. A high percentage of the time the verbal offer leads to crickets, or may end up being a different offer altogether if it does arrive in writing. So I wait until I see it in writing to tell the seller. We do things in writing for a reason and most seasoned agents/investors understand this. Sorry this seller lead you to believe you had a deal, that’s definitely a bummer. However I did read your whole post and from the way you describe it happening it’s not really scummy on their behalf in my opinion because he’s not YOUR agent, he’s the seller who happens to be an agent. He has the right to maximize his sale price, that’s what sellers do. It’s like saying the coach on the other side of the field is scummy for wanting his team to win and not yours, or being mad at your ex’s lawyer for doing their job advising your ex on how to screw you over in divorce court. Buyers and sellers have opposing interests, that’s just how it is. Sorry for the tough love you’re getting from me and others on here, but in my opinion this is on you for not locking it down with a written contract. I would never let the listing agent work up my offer for me as a buyer so I think that was where you made a mistake. You lost control of the deal by relying on them to write up and send the contract. Once you get past being upset, I’d take the opportunity to learn from this. Next time submit a real written offer with proof of funds and an offer expiration deadline in order to be taken seriously. Once you get it mutually executed and deliver earnest money promptly to open escrow (and pass attorney review in some states, pass a grace period in others) then you’ve entered into a legally binding agreement, and not before. I would still submit the offer but since it’s a listing now, find yourself a great buyer’s agent to represent you who knows the process. Don’t rely on the listing agent/seller to write your offer, as they are clearly on the other team. Good luck!
@Wilson Hunter it does suck that he went against his word and anytime someone does not negotiate in good faith it feels terrible!
Fortunately or unfortunately as a realtor he did nothing legally wrong as you know. Since you know he’s a realtor he obviously disclosed that. Really there is nothing you can do in this scenario except for staying there until you had everything in writing. Hope you’re able to get a deal there soon!
This is why I get pissed off when we get into these discussions about morality and fairness and everyone here with a buck to make off of being considered honest gets up on their high horse and starts their patented speechifyin'-preachifyin' bullcrap about The Ethics of Being a Realtor™ and suchlike. Along comes an ordinary Joe who thought a verbal promise was a matter of honor...and the same people school him that he should by rights expect everyone in real estate to be a liar and a snake.
This is a dirty, nasty business and all the people in it are covered in cat dirt from head to toe. Glengarry Glen Ross should be required viewing when dealing with any of us.
It definitely sucks and I know because I have been there. I agree with you that he should have just told you, but lick your wounds and move on. You will find something, just focus on the next deal and learn from this. I try not to do a happy dance til keys are in my hand.
As they say "Buyers are liars and sellers are thieves."
After doing $200 Million+ in sales at an average closing price under $100,000, I can tell you all with absolute certainty that, that is the truest quote in real estate.
If he was representing any client his job would be to effect the highest possible sales price, why should it not be the same for himself? I understand it’s kind of a jerk move but not reprehensible by any means. He might just not have looked at the comps recently, sometimes prices change drastically in just a few months.
It must look ok to you because you do it. You shake a man's hand, look in his eye and do a deal, it's done. Don't expect people from Chicago to get this. :-)
Then I guess I can’t expect people from wherever you come from to understand that it would be idiotic to make generalizations about an entire city of people based on a comment made by one individual from that city.
Back to the topic at hand. If I have a verbal agreement to sell a house for 400k and then get an offer for 450k before any papers are signed you better bet that I’m having my client sign the contract for 450k. Can you imagine trying to convince the client otherwise? Obviously if my client wants to keep their word then I would support that decision, but I couldn’t fight them if they wanted to take the higher offer.
Then I guess I can’t expect people from wherever you come from to understand that it would be idiotic to make generalizations about an entire city of people based on a comment made by one individual from that city.
Really? You have absolutely zero sense of humor? :-)
Then I guess I can’t expect people from wherever you come from to understand that it would be idiotic to make generalizations about an entire city of people based on a comment made by one individual from that city.
Back to the topic at hand. If I have a verbal agreement to sell a house for 400k and then get an offer for 450k before any papers are signed you better bet that I’m having my client sign the contract for 450k. Can you imagine trying to convince the client otherwise? Obviously if my client wants to keep their word then I would support that decision, but I couldn’t fight them if they wanted to take the higher offer.
Read the posts. This didn’t happen. The listing is currently sitting at 450 with no offers. The dude did not have a random 450 offer suddenly come in on his Airbnb that wasn’t even on the market. He thought he was clever and wanted to see if he could spin a 400k mutual agreement into a few extra grand by lying about his intentions. He wanted 12 to 18 hours to see if he could incite a bidding war from me or FOMO someone else.
If that’s the case then hopefully he gets burned on the decision. Since your post is from today I’m guessing this just happened in the past few days, so the property may still sell at the new asking price.
If that’s the case then hopefully he gets burned on the decision. Since your post is from today I’m guessing this just happened in the past few days, so the property may still sell at the new asking price.
My bet is that he sells the property somewhere between my price and his asking price and after realtor fees he’ll make exactly what he would have made on my deal.
But let’s say he makes $10k more. Is that worth lying and breaking the deal? The forum votes yes apparently. Or at least the “gold badge vote” goes yes haha.
One thing I have learned while working with clients is people have very different relationships to money. Some people make it a game to get every single cent out of the transaction, some people think 1000 dollars one way or another is a big deal. Other people are not so price sensitive or nit-picky, and just want to save themselves a headache. Point is, you will run into both types, so be on the lookout.
Oh, Christ on a dripping meathook...can't we all get past the bullcrap?
If (A), I shake your hand and I make you a promise that I'm going to sell you a property. Then (B), I decide I'm not going to sell you the property, Because (C), perhaps I can get more money for it elsewhere, And (D) I see no need to inform my handshake buyer before I put out the property to market... QED: That makes me A LYING CHEATING SCUMBAG WHOSE WORD ISN'T WORTH A DAMN.
Those are the bare bones of the matter. I grew up in upstate New York, by way of Athens, Greece. There's a saying about Greeks: shake hands with one of us and count your fingers afterwards.
Perhaps this is why I treasure the value good men put in that handshake in America. I chose to be here, and that's a good reason why. It has served me in good stead.
But in real estate, the unpleasant truth is that most of us would sell our mothers if the price was right. We're a special tribe of compromised trash, we are. If we could stop clutching at our pearls about it for a moment, it would be nice. I know I'm going straight to hell, for one. I smell the brimstone every night. Not because I've ever gone back on a handshake deal or a pinky swear, either.
One thing I have learned while working with clients is people have very different relationships to money. Some people make it a game to get every single cent out of the transaction, some people think 1000 dollars one way or another is a big deal. Other people are not so price sensitive or nit-picky, and just want to save themselves a headache. Point is, you will run into both types, so be on the lookout.
For sure. To be clear, I know that this kind of thing can happen, but the point of my post was an ethical complaint/observation. Based on the responses I can tell people think I’m frustrated because I didn’t get the cabin, but I could care less about the cabin itself. I’ll get one soon. I just don’t like being lied to in a deal.
I get actual enjoyment from doing Smoky Mountain short term rentals that is well beyond the money made. I brought my kids to camp out in our last one for three weeks as we got it ready. My kids learned that people pay us money to stay in an awesome cabin that we worked to set up, and they learned about honest work and exchange of money for real value. I love seeing the positive appreciation from honeymooners making lifelong memories in our Smoky Mountain cabin.
The dude who fleeced me on a deal (same age also with children) will buy Christmas presents for his kids with the delta earned from angle shooting and lying to me in a deal.
I’m surprised at the anger directed at the OP. This is not the case of another, better offer coming in after a verbal agreement. This is the agent using the verbal offer from the OP to determine a listing price. We can expect there will be multiple offers now. Why not, during negotiations, simply say “I’m sorry; I can get more. This deal will cost you X.”?? Instead an offer is accepted but not in good faith.
We’ve had this happen to us. Told we just needed to submit the purchase contract and seller would sign - only to see the property go into contract a day later to someone else at a slightly higher price. As an owner, I would always want the highest price of course. I don’t believe though that this is the best way to do business.
@Wilson Hunter Just use it as a learning moment it will make you stronger for next time and maybe for the future use a buyers agent so you can get a contract in front of someone as opposed to just a verbal offer.