Great property, Sleezeball agent

14 Replies

Greetings fellow BPrs and welcome to my first discussion!

First let me give a disclaimer: I generally like Real Estate agents and as a matter of fact I am attending classes in the fall to get my license (not to be a full time agent but as a competitive advantage and possible transition career). But as many of you know there are plenty of bad agents out there. So I am not referring to all REA as sleezeballs, just this one.

This agent is local to my area and is not with a brokerage I have ever heard of, they don't even have a website. This guy signs residential and commercial properties to represent that are in desperate need of repair. Instead of offering FMV he convinces last resort owners to jack up the price 20% or more. He 'oozes' used car salesman in all forms. I've talked to him about properties and walked properties with him, and even I am creeped out. So I am not a fan of his in the least.

For the last few months he has been listing on craigslist a duplex for sale. One side is rented, one is not. The side that is not is in terrible shape and will need a full face-lift. I assume the other side will as well. Rent on each half is $575 for a 2/2 which is a little below value for that area of Texas. He won't post the address so I have not looked up the CAD value, but other duplexes in that area are have a tax value at about $75k. That area of duplexes was built in 1983.

He is asking $100k.

Not. Ever.

I'm going to walk the property so I can get the address and get a full look. But I want to do a deal with the owner directly, which that type of transaction is very prominent in my area. I could get an owner financed deal for $50k-which is the goal here.

I have never tried to side-step a REA, but I don't have the stomach for this one.

Deal aside, has anyone had any experience like this? Should I wait for the listing to expire and then go to the owner? Should I just send the owner an offer letter? What is prudent here?

Or do I walk away?

All suggestions are greatly appreciated and do not constitute legal advise, just great BPrs giving some great input!

You could go around the agent if you know who the seller is and let the seller decide whether or not to break his or her contract with the agent.  You will, however, make a bad reputation for yourself by doing so.  News spreads quickly between agents (especially in mid to small sized communities).  If you want that area's agents to work with you and for you in the future, I would not recommend it.  I would either negotiate through the agent or wait until the listing expires.

I think you should look at other properties if you do not want to work with the listing agent.  It is likely the agent has an exclusive right to sell that property and you will have to go through them.

Why are you investing effort in this one with a couple of strikes against it from the get go? Since it is overpriced and you haven't clue if the owner is motivated why are you bothering? Could it be a deal? Sure but so could hundreds or thousands of other deals on the market. You are certainly not going to chase down everyone of them are you?

That said, this sounds fishy. Why would an agent not give you the address? Maybe it is not listed and he is wholesaling it? If it is listed and he is the agent I would think he is breaking his duty to the seller by not publishing the address (unless requested not to by the seller)

In most states it is perfectly legal to approach a seller directly as long as you are not an agent yourself. However it is illegal (or a tort) to in any way suggest the seller breach his contract with his agent.

Medium crab1 copyNed Carey, Crab Properties LLC | http://baltimorerealestateinvestingblog.com/

If the agent has an exclusive listing you can't & should not step around him.

Does not make sense that the agent would convince the sellers to jack up the price on their listings. What would be his motivation? He gets paid when the property sells. It's not going to sell if it is overpriced.

Medium holton wise property group logo jpegJames Wise, The Holton Wise Property Group | [email protected] | 216‑661‑6633 | http://www.HoltonWisePropertyGroup.com | Podcast Guest on Show #127

@Jonathan Key  If you are looking to get your own RE Licence, you will need to become very adept at dealing with all sorts, without letting your personal feelings interfere with what you are trying to achieve. And that may well mean, sooner or later, dealing with this Agent (again) with a big smile on your face. Perhaps it is time to introduce your $50k offer to him (subject to your subsequent inspection), which he should HAVE TO pass on to his Seller. It is not your concern whether or not the Seller is motivated; you might find out soon enough. The only thing here that matters to YOU are the numbers that work for YOU.  Cheers...

@Daniel Mohnkern  Ahh...I did not think about the bad reputation point. Well put Sir, thank you for your input!

@Neil Aggarwal  That is one of my options indeed as I truly do not want to work with this agent. I appreciate your observation.

@Ned Carey  Seems like you know me all to well after just this one post! Yes, I do obsess. I will get in the cracks and crevasses of things and probably spend much more time than what is needed. That is part of my personality indeed, but sometimes I do not know when it may be a positive or when it may be a negative. That is why I put it out to BP for some feed back - and I appreciate and welcome your honesty. Thank you!

...and you are right, I think it sounds fishy to me too.

@James Wise  Thank you for your direct answer, I do want to avoid being obtuse. I am not sure why this particular agent is motivated to raise prices. Alas, he does in fact do exactly that, but nothing ever sells. Puzzling....

Originally posted by @Brent Coombs :

@Jonathan Key If you are looking to get your own RE Licence, you will need to become very adept at dealing with all sorts, without letting your personal feelings interfere with what you are trying to achieve. And that may well mean, sooner or later, dealing with this Agent (again) with a big smile on your face. Perhaps it is time to introduce your $50k offer to him (subject to your subsequent inspection), which he should HAVE TO pass on to his Seller. It is not your concern whether or not the Seller is motivated; you might find out soon enough. The only thing here that matters to YOU are the numbers that work for YOU.  Cheers... 

Brent - Thank you very much for your response and input, I tried to connect with you but BP thinks I am a spammer, lol!

You make a very good point, I will certainly cross paths with this agent in my future. However I did not know of his requirement to pass on all offers made! THAT is why I enjoy BP so much, I learn something everyday!

I will certainly keep a smile on my face, thank you again Sir!

I'm wondering why you don't have your own agent, so you don't even have to deal with the sleaze directly? Agents talk amongst themselves and you will get a better idea of what's going on in the owner's and the agent's head. I would get a tough, no BS agent in my corner if you want to pursue this. 

Personally, I would move on and come back to it in 3 months or so after it has sat, overpriced on the market...if it even is on the MLS.

Originally posted by @James Wise :

If the agent has an exclusive listing you can't & should not step around him.

I strongly disagree with that James. I as a buyer have no obligation to the agent. I can certainly go around the agent legally. Most exclusive right to sell contracts allow the seller to sell, but they would still owe the listing broker a commission.

Does not make sense that the agent would convince the sellers to jack up the price on their listings. What would be his motivation? He gets paid when the property sells. It's not going to sell if it is overpriced.

Agents do that all the time. Firstly to get the listing and some simply hope the greater fool theory will kick in and they will get a bigger commission.

Medium crab1 copyNed Carey, Crab Properties LLC | http://baltimorerealestateinvestingblog.com/

Originally posted by @Ned Carey :
Originally posted by @James Wise:

If the agent has an exclusive listing you can't & should not step around him.

I strongly disagree with that James. I as a buyer have no obligation to the agent. I can certainly go around the agent legally. Most exclusive right to sell contracts allow the seller to sell, but they would still owe the listing broker a commission.

Does not make sense that the agent would convince the sellers to jack up the price on their listings. What would be his motivation? He gets paid when the property sells. It's not going to sell if it is overpriced.

Agents do that all the time. Firstly to get the listing and some simply hope the greater fool theory will kick in and they will get a bigger commission.

 Makes no sense Ned.

1. If the seller wanted to talk to directly to buyers he would not have hired someone to do that for him.

2. If seller is willing to sell at a reasonable price agents are not  going to twist their arm to raise price 20% above market. Yes some agemts will try to buy the listing but the majority of Homes that are listed to high are that way because the seller thinks they can get that price, not because the agent is going out of their way to get an unsellable listing. Most agents realize an unsellable listing is a waste of their time.

Medium holton wise property group logo jpegJames Wise, The Holton Wise Property Group | [email protected] | 216‑661‑6633 | http://www.HoltonWisePropertyGroup.com | Podcast Guest on Show #127

@James Wise  I think what Ned means is that there is nothing to prevent an interested Buyer from talking directly to a Seller (if they can be found), even if the Seller does have their property listed exclusively. If the Seller agrees on a price directly with the Buyer, all it means is that the Seller should know they would still be liable to pay a commission to that Agent. Cheers...

@James Wise  

Makes no sense Ned.

1. If the seller wanted to talk to directly to buyers he would not have hired someone to do that for him.

You said that the buyer "CAN"T" step around the agent. That is simply not true. While it may be not work effectively it certainly can be done. I believe it is appropriate when the agent is impeding an effort to do a deal. There are good agents and bad agents. I have little tolerance for bad agents.

Thank you for helping me clarify @Brent Coombs  

Medium crab1 copyNed Carey, Crab Properties LLC | http://baltimorerealestateinvestingblog.com/

Hi,

I agree with Brent. Nothing's preventing a buyer to talk directly to the seller. They can even agree to a lower price. 

In my opinion, if it's overpriced now, nobody's going to buy it. Either you wait or look elsewhere so you don't have to deal with a "bad" agent.

Cheers!