Sellers Lawyer Steals Deal

Investor · Windham, ME · Member since 2016 · 180 posts · 37 votes

Anyone ever have a great deal (verbal) going with a seller and have the seller consult their attorney about the upcoming transaction and have the attorney steal the deal? I did and it isnt a good feeling. Its what I would consider the deal of a lifetime. The property was off market and he responded to one of my mailers, the seller was extremely enthusiastic about selling me the property for pennies on the dollar, until his lawyer found out and started offering the property to other investors he knows. And of course the sellers going to listen to every word his lawyer says. I'm thinking the lawyer is going to be part of the deal on the purchase side.

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Mike CumbieBusiness Member

REALTOR® · Brockport, NY · Member since 2015 · 3k+ posts · 4k+ votes

I do have to say it is not unethical by any means. The lawyer has a responsibility to their principal (The seller). If say it was worth 100K and you offered 20K and they took it to his lawyer he better tell him to get more. Refer him to an agent to see how close to retail he can get, and if he absolutely has to sell now "I'll give you 60K and I am stealing it from you."

That is actually more ethical than letting someone else strip 40-80K from their client.

Just my 2 cents and good luck!

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Ed B.
Real Estate Investor · Sacramento, CA · Member since 2010 · 292 posts · 103 votes
9y
Jessica may be correct in that the lawyer's only duty should be to make sure the offer is written up correctly, etc., but practically speaking, I think it's unrealistic to assume the lawyer won't offer his opinion on the deal, even if it's unsolicited. If I'm the lawyer and it appears the offered price is easily less than value, I'm probably not going to keep my mouth shut simply because of some strict belief that negotiating a purchase price should be left solely between buyer and seller. Especially if I'm an opinionated and meddelsome person by nature, I'm going to let the seller know my thoughts. I don't know how the buyer could have prevented this, because he has a signed acceptance, the seller is generally free to get opinions from a wide range of people. He may have suggested something like "if you find someone able to better my offer, could you please let me know so I can at least have a chance to match it?" I'm sorry you lost what may have been the deal of a lifetime but that's always the danger when you have a seller consult others before accepting an offer. Very often, the person consulted has a clearer head and effectively snuffs out the good deal the buyer had on the hook. Yep, life ain't fair.
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Ryan Bonner
Residential Real Estate Broker · Grove City, PA · Member since 2016 · 6 posts · 2 votes
9y
Matthew Wright, Regardless of what the lawyer did, your issue seems to be that the lawyer did not come back to you, or instruct the seller to come back to you (speculation) to give you one last opportunity to make an improved offer. However, I'm wondering why you feel you couldn't go back to the seller and make that offer without the lawyer's assistance or direction? How did the lawyer prevent you from making an improved offer? You obviously had the seller's contact info and were able to make an initial offer. What's stopping you from making another offer?
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Jessica Zolotorofe
Attorney · NJ · Member since 2016 · 1k+ posts · 794 votes
9y
Ed B. I totally agree. It's far less of a concern that the lawyer said the deal wasn't good. Advice is one thing as long as it is clear that it is just an opinion, not legal advice and that the client is calling the shots entirely. The thing I had a real concern with that he...again, allegedly... contacted other investors himself and/or took the deal himself.
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Doug Van Liew
Real Estate Agent · Virginia Beach, VA · Member since 2016 · 29 posts · 24 votes
9y
In real estate without a ratified contract all options are on the table. A verbal agreement isn't a deal. It the same concept of a seller saying they are going to list with me in the spring, then listing with someone else or not listing at all for what ever reason. No listing agreement, no listing. There are frequently deal stoppers in this industry whether it be attorney, family member, neighbor, agent, coworker etc. Take it at face value and move to the next.
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Rod HanksBusiness Member
Insurance Agent · Dallas, TX · Member since 2013 · 743 posts · 462 votes
9y
Happens all the time in this business. It sucks but that's the way it goes. Whether they talk to their attorney, brother in law, cousin, friend, etc they are only giving you a polite no. Always try to get them to sign a contract on the first meeting. If they tell you they have to talk to someone first chances are you are not getting the deal.
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James Wise
Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes
9y
Sounds like the buyer doesn't understand what team the attorney is on.
Attorney protected the interest of his client. Job well done.
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