How to deal with an uncooperative Listing Agent?

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How to deal with an uncooperative Listing Agent?

Account Closed
Lender · Tampa, FL · Member since 2014 · 543 posts · 168 votes

I have a borrower (self-employed) who is purchasing a 640k property in Orlando area who has had to clear up unexpected conditions in order to obtain a loan commitment, but he has done what was needed and we're back on track.

However, we need a few days closing extension and the Listing Agent is difficult, likely because from what I hear, she has a buyer ready and she would get the entire 6% Points real estate commission.

I'm trying to be nice, but the listing agent and her title agent refuse to surrender the seller's contact info.  I easily found the seller's cell numbers and emails online, so I think it may be time for me to simply Circumvent the Listing Agent and contact the sellers directly.

What issues might this cause and what could prevent a Mortgage Broker from Circumventing the Listing Agent in effort to deal directly with the sellers?  

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Russell BrazilBusiness Member
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Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
8y

If a buyers agent did that they would immediately have an ethics complaint filed against them and they would absolutely receive some sort of disciplinary action. Do you have any sort of body that the listing agent could file an ethics comolaint against you with?

A $5,000 fine and 30 day suspension of license would be typical for an agent in my market for doing what you have suggested.

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  • Ricardo Lopez
    Real Estate Broker · Melbourne, FL · Member since 2016 · 36 posts · 23 votes
    8y

    If you only need a few days and paragraph 8(b) of the FAR/BAR was checked, you have an automatic extension of up to 10 days due to CFPB requirements. See section 5(a) of the FAR/BAR. If that is the case, simply tell the listing agent to refer to that section. Most agents do not know this!

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  • Michael Plante
    Deland, FL · Member since 2017 · 2k+ posts · 1k+ votes
    8y
    It’s up to the contract Then to the seller not you or the listing agent
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  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    8y

    If a buyers agent did that they would immediately have an ethics complaint filed against them and they would absolutely receive some sort of disciplinary action. Do you have any sort of body that the listing agent could file an ethics comolaint against you with?

    A $5,000 fine and 30 day suspension of license would be typical for an agent in my market for doing what you have suggested.

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    OP
    Lender · Tampa, FL · Member since 2014 · 543 posts · 168 votes
    8y

    Fortunately, as a Florida Mortgage Broker, I'm not under FRIC, FRAC or FREC

    Also, Mortgage Brokers don't go around filing ridiculous and petty complaints on each other at the drop of a dime.

    So unless there's something I don't know about,  Florida Mortgage Brokers are pretty much free to circumvent Realtors and go straight to the seller anytime we feel necessary.

    So often sellers are completely oblivious to the nonsense and unprofessional behavior of the listing agent they've chosen.

    Of course, I don't want to get the buyer's agent in trouble, so I think it's best I take the initiative and circumvent the listing agent and go straight to the seller to get the sales contract extension.

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  • Wayne Brooks
    Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
    8y

    @Ricardo Lopez This doesn't seem to be a CFPB  issue.

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  • John Kent
    Real Estate Agent · Orlando, FL · Member since 2008 · 551 posts · 159 votes
    8y

    This may fall under unlicensed brokering of real estate since you would be negotiating the terms of a real estate contract for another and you are an interested third party receiving compensation from the transaction.  

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  • Wayne Brooks
    Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
    8y

    @John Kent Not even close.

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  • John Kent
    Real Estate Agent · Orlando, FL · Member since 2008 · 551 posts · 159 votes
    8y
    You don't think so? 

    He wants to contact the Seller directly to renegotiate the terms of the contract. And he will be compensated in the transaction. And he is unlicensed. This activity falls under FS 475.01a. I am unaware of mortgage brokers having an exception. 

    Originally posted by @Wayne Brooks:

    @John Kent Not even close.

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  • Wayne Brooks
    Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
    8y

    He doesn't make a fee for the "real estate" transaction, he makes a fee for the loan transaction, big difference.  Feel free to run it by the FL realtor hotline if you want.

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  • John Kent
    Real Estate Agent · Orlando, FL · Member since 2008 · 551 posts · 159 votes
    8y
    Originally posted by @Wayne Brooks:

    He doesn't make a fee for the "real estate" transaction, he makes a fee for the loan transaction, big difference.  Feel free to run it by the FL realtor hotline if you want.

    Steve didn't mention it but I guess you are assuming that he has chosen to be paid by the lender instead of being paid by the borrower. A mortgage broker is the agent of the buyer in the real estate transaction and is paid a fee for service on a contingent basis in the real estate transaction as a result of the real estate transaction. This should qualify as an interested third party just like the real estate brokers. In the alternative, a loan originator who works for a lender is paid outside of the transaction direct from the lender. The lender and it's employees are a disinterested third party just like an appraiser or home inspector. 

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    OP
    Lender · Tampa, FL · Member since 2014 · 543 posts · 168 votes
    8y

    @John Kent @Wayne Brooks,

    (note: I do not know these 2 realtors in the transaction)

    Planning to contact the sellers directly today by email in advance of calling them as I don't have time to waste dealing with the listing agent. 

    The seller's mortgage payment is about $5200 from what I guestamate after looking up the original loan amount and date, taxes and est. insurance and HOA.

    So if I get the listing agent to rebate $2,600 back to the seller and get the Buyer's Agent to rebate $2,600 back to the seller, this pays for 30 days of the seller's mortgage payment and helps with other plans the seller has in place and should keep the deal together.

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  • Ian WalshBusiness Member
    Lender · Philadelphia, PA · Member since 2016 · 2k+ posts · 1k+ votes
    8y

    There might not be much you can do here besides close within the contract deadline.  There are some long drawn out steps to take to maybe get someone in trouble for not acting on someone else's behalf, but that is wasted energy.

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    OP
    Lender · Tampa, FL · Member since 2014 · 543 posts · 168 votes
    8y

    @Ian Walsh, we can't close within the sales contract date.

    So what would you do as a lender if you could call and talk with the sellers to hold your loan together?

    The sellers need to move, so they can't afford to put property back on the market.  Therefore,  I'm thinking I will ask them if I were to get the listing agent and buyer's agent to collectively offer $5,200 in realtor rebate  via  either credits to seller at closing or get an addendum lowering both realtor's commission from seller by $5,200, would they give my borrower a 30 day extension.    

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  • Wayne Brooks
    Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
    8y
    If I were either agent and you suggested to the seller that the agents kicking was the way to go, of course I’d try to keep all deals away from you in the future. In all your posts, you seem to feel like RE agent commissions are just there for the taking.. We don’t know what the conversations between the listing agent and seller have been. In any event, if the seller is confident the deal will close with a week or two extension, it would of course make sense to extend as opposed to trying to start over finding a new buyer. Has there already been an extension or any other reason the seller would doubt the buyer’s ability to close? If the buyer is confident, he should be willing to pony up some additional nonrefundable EM, maybe $5400?
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  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    8y

    You cant close the loan and need a 30 day extension and you want someone else to pay because you screwed up? How long have you been in this business?  A 30 day extension will usually mean that the buyer needs to up the purchase price to incentivize the seller to continue to sell to him. 

    Im not sure what the regulations in Florida are for variable rate commissions, but thats the 2nd time youve suggested doing something that would be illegal in the states I do business in. I find it hard to believe that Florida is that different from the midatlantoc states that both interference with an agency and fidicucairy relationship, and non disclosure of variable rate commissions are both acceptable.

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  • John Kent
    Real Estate Agent · Orlando, FL · Member since 2008 · 551 posts · 159 votes
    8y
    Originally posted by @Account Closed:

    @John Kent @Wayne Brooks,

    (note: I do not know these 2 realtors in the transaction)

    Planning to contact the sellers directly today by email in advance of calling them as I don't have time to waste dealing with the listing agent. 

    The seller's mortgage payment is about $5200 from what I guestamate after looking up the original loan amount and date, taxes and est. insurance and HOA.

    So if I get the listing agent to rebate $2,600 back to the seller and get the Buyer's Agent to rebate $2,600 back to the seller, this pays for 30 days of the seller's mortgage payment and helps with other plans the seller has in place and should keep the deal together.

    Contacting the seller in and suggest/recommend that they renegotiate the terms of the listing agreement would be an example of tortuous interference with a contract.  Further down the rabbit hole you go. 

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    OP
    Lender · Tampa, FL · Member since 2014 · 543 posts · 168 votes
    8y

    @wayne brooks.,

    Not not really worried about what either of the real estate agents think or worried about future referrals as I don't need  their referrals.

    What I'm concerned about is my buyer borrower's lack of Reserves so they cannot contribute

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    OP
    Lender · Tampa, FL · Member since 2014 · 543 posts · 168 votes
    8y

    @Russell Brazil,

    Your comment above....

    You cant close the loan and need a 30 day extension and you want someone else to pay because you screwed up?

    I know the initial knee jerk reaction for all realtors any time issues pop up during the loan processing and lender U/W is to blame the Mortgage Broker. However, what would you have me do as Florida Mortgage Broker if the borrower concealed info about a recent Foreclosure?

    @Russell Brazil, I don't create reality, I help borrowers deal with it.

    As far as realtors loaning the commission, I'm pretty sure that in FL a realtor can may up to 5 private mortgage loans per year without a lender's lic., am I right?  

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    OP
    Lender · Tampa, FL · Member since 2014 · 543 posts · 168 votes
    8y

    @John Kent, your above Tortuous Interference with a contract is a good response and one I'm been sending to realtors over the last 15 yrs when they try to coeses and steer my borrowers to their "preferred lenderrrrr"

     Here is the draft that I send to realtors:

    Tortious Interference, in the of , occurs when a person (i.e. realtor) intentionally damages the 's (i.e. Mortgage Broker)or other business relationships (i.e. Mortgage Broker’s Contracted Borrower).

    This tort is broadly divided into two categories, one specific to contractual relationships (irrespective of whether they involve business), and the other specific to business relationships or activities (irrespective of whether they involve a contract).

    Tortious Interferencewith Contract Rights can occur where the convinces a party to breach the contract against the or where the tortfeasor disrupts the ability of one party to perform his obligations under the contract, thereby preventing the from receiving the performance promised.

    The hardcore instance of this tort occurs when one party (i.e. Realtor) induces another party (Mortgage Broker's Contracted Borrower) to breach a contract in circumstances where the first party acts with knowledge of the existence of the contract.(Offer and Acceptance, executed Florida Mortgage Brokerage Agreement)

    Such conduct by Realtors is grounds for a law suit for damages and lost compensation and is called:

    "Tortious Interference with a Contractual or Business Relationship"

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    OP
    Lender · Tampa, FL · Member since 2014 · 543 posts · 168 votes
    8y

    forgive the spelling and grammar errors, but you know what I mean

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  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    8y
    Originally posted by @Account Closed:

    @Russell Brazil,

    Your comment above....

    You cant close the loan and need a 30 day extension and you want someone else to pay because you screwed up?

    I know the initial knee jerk reaction for all realtors any time issues pop up during the loan processing and lender U/W is to blame the Mortgage Broker. However, what would you have me do as Florida Mortgage Broker if the borrower concealed info about a recent Foreclosure?

    @Russell Brazil, I don't create reality, I help borrowers deal with it.

    As far as realtors loaning the commission, I'm pretty sure that in FL a realtor can may up to 5 private mortgage loans per year without a lender's lic., am I right?  

    The issue is not making private loans, but rather disclosure of a variable rate commission. If a variable rate commission is not agreed to up front, and disclosed....and then the parties engage in the activity, that is illegal to partake in in every state I am licensed in. Florida could be different, but I would be surprised.  Tortuous interference is likely illegal there as well.

    The foreclosure wasnt showing on their credit when you ran it for the preapproval? 

    If your client was hiding a foreclosure, then they were entering into a contract without the ability to complete that contract, which is illegal.  In no way should a competent agent agree to an extension for a buyer like that. But it seems like everyone involved, listing agent, buyers agent and mortgage broker failed to properly vet the buyer and their qualifications here.

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    OP
    Lender · Tampa, FL · Member since 2014 · 543 posts · 168 votes
    8y

    @Russell Brazil, you usually give good advice and are, I'm sure, a great realtor.

    However, let's stop focusing on me as a Florida Mortgage Broker who has an experienced borrower who was able to conceal a foreclosure that the lender's QC discovered late in the process and focus on the 800 pound Gorillas in the room and that is the following:

    $640,000 x 6 points realtor commission = $38,400

    $19,200 to the listing agent

    $19,000 to the buyer agent

    Out of $38,400, you don't think it's appropriate for a Florida Mortgage Broker to make each realtor come off of a few of the mountain of bananas they're both sitting on to keep the deal together?

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  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    8y
    Originally posted by @Account Closed:

    @Russell Brazil, you usually give good advice and are, I'm sure, a great realtor.

    However, let's stop focusing on me as a Florida Mortgage Broker who has an experienced borrower who was able to conceal a foreclosure that the lender's QC discovered late in the process and focus on the 800 pound Gorillas in the room and that is the following:

    $640,000 x 6 points realtor commission = $38,400

    $19,200 to the listing agent

    $19,000 to the buyer agent

    Out of $38,400, you don't think it's appropriate for a Florida Mortgage Broker to make each realtor come off of a few of the mountain of bananas they're both sitting on to keep the deal together?

     If it is illegal for them to do so, then yes I think it to be highly inappropriate. 

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  • Wayne Brooks
    Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
    8y

    @Account Closed Still at the end of the day, the seller either agrees to a couple weeks extension ($2600 or so in additional carrying costs supposedly) OR they refuse and eat another 3 months minimum carrying costs with a new buyer.....unless this is not the first time the buyer has gone to the "extension" well.

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    OP
    Lender · Tampa, FL · Member since 2014 · 543 posts · 168 votes
    8y

    @Russell Brazil, why would you say it's illegal when Private Investors, if they don't advertise as a Lender,  can loan out their own money I believe up to 5 times per year without a Lender Lic.?

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