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The question that should be answered is, "What is duty of the agent?" Is it their duty get the property sold and close for the owner ASAP. Is it their duty to educate the owner on the value of their property. The seller and their agent should be on the same page although those duties will differ from party to party.
I understand what the OP is getting at and I too have felt the same way about a property that sold. They bought a big 2'x10' banner and I never got a call back from the agent.
I'm not saying it doesn't happen, but there are people that are actually looking to make money on a real estate transaction and there are always people looking to profit off the misfortune of others. An extreme example, is it wrong to sell a coffin to the family of the deceased?
I have made higher offers turned down by sellers, but I understand it, I'll have requirement that the seller might not want, they might make a few thousand more, but it might tie up the property and fall out of contract.
Imagine if the agents responsibility is , "Get the most money from this property for the owner." Let's get past the first conflict, which is, to get the most money for the owner is to work for free. Next, imagine if you are in an appreciating market, which you really don't know until after the fact, would it be the agent's duty to say don't take this offer today because the property will go up .5% next month? Let's add, the owner of the property has an ARM at 3% and market appreciation has been 5%, would it be an agents duty to understand that the seller is making 2% more than their borrowing cost.
The OP felt that something is fishy and the seller had left money on the table, the only way for them to know is to contact the seller, present the information and get the opinion of the seller.
Here is an example of turning down a higher offer. All comparable (20 units in last 6 months) homes have been sold at $399,000 and below. Multiple offers come in at $410 and below, one comes is $430,000. The owners moved and have mortgages totaling $3000 and have taxes of $2000 due in 30 days. Which offer is most likely to close, the $430,000 where there aren't comps to support the price or the $410,000 offer. If the seller takes the $430,000 and it doesn't close, they'll be $5,000 out of pocket, then get negotiated down to $410,000, then end up fronting $8000 hoping to get it back on the sale. The house sits on the market for 30 days, the excitement is gone, the demand has dropped, and offers are only $400,000 and the seller paid another $3000 towards the mortgage.
All good input. The terms and variables are pretty much unlimited, as are seller needs.
Unfortunately, despite taking broad strokes with the brush, the OP is not wildly wrong to be a smidge in bewonderment. Over the last several years, we have had a few publicized instances of Real Estate Commission discipline of agents/firms for not conveying better offers and then purchasing properties at lower prices.
I'm leaving details out because they're just that. I wanted to find out where the boundaries were
This is the reason for the devolution of the thread. There is no cut and dry in real estate. There is no solid boundary for things like this. Details matter.
You are concerned that the seller was scammed because of the list price in a house you have never been in. What if the house has a foundation issue and the associate is an investor? I have yet to see a buyer buy a house with a foundation issue present. They are all bought by investors. Maybe the agent was doing right by his client in sending out the listing to the local investors to get a sale?
There are house issues and there are house issues. Maybe the house has mold. I'm just saying there are a lot of things that would cause an agent to price a home for less than a buyer would expect for a neighborhood. Even way, way less.
So if you have details that prove or disprove the condition of the house, that would be relevant.
What is the motivation of the seller? Is it an estate where the family just wants it gone? Has mom or dad gone to a retirement home and they need that money ASAP because they are staying in the daughter's house which is unsafe for them? Did the associate have cash to make that happen in a week or two? Did the investor offer to close and let them keep stuff in there for a month rent free?
So if you have details of the sellers motivation and financial needs, that would be relevant as to the course of action taken by the agent.
Is the offer cash? Did the associate waive inspections and such so there are no contingencies left? Did they wire the funds into escrow already so they are just waiting for the furniture to get moved from the house?
That would matter as to if the house was "sold" or not. So the agent's comment may be appropriate and not crossed any ethical boundary line.
If you have details about the transaction that would matter.
Look nothing is black and white. The reason you might feel agents are "jumping to the defense" of one of their own is because I am sure all of us have been in that incredulous situation with a client where they insist on pricing well below market or taking the first offer when you know you can get multiple offers. I've had clients negotiate only with one buyer at a time in multiple offers as they have some sense that the person who offered first should get first dibs on the house. I can only say this isn't in your best interest so many times. At some point society needs to treat adults as capable of making decisions that work the best for them without everyone approving.
The agent could be a total slime bucket as well. Details matter because they tend to create the background setting if you will.
I have an offer on a home now and it is not for sale at all. My elderly neighbor, who has become a good friend, may take me up on it someday. Things change. I would love to be the first person to get my hands on the deal before it goes to market. I just don't want to deal with a bidding war on the home, which is what seems to happen around here. I know who she is leaving the home to and they are not in the area. They have relatives in the area as well and everyone here knows what the market is going for. It is easy to see what comps are available in the area. Maybe it will happen, or maybe everyone will change their minds. It will be some time before it does happen, still I wanted everyone involved to know that when the time comes I am interested.
This is the reason for the devolution of the thread. There is no cut and dry in real estate. There is no solid boundary for things like this. Details matter.
You are concerned that the seller was scammed because of the list price in a house you have never been in. What if the house has a foundation issue and the associate is an investor? I have yet to see a buyer buy a house with a foundation issue present. They are all bought by investors. Maybe the agent was doing right by his client in sending out the listing to the local investors to get a sale?
There are house issues and there are house issues. Maybe the house has mold. I'm just saying there are a lot of things that would cause an agent to price a home for less than a buyer would expect for a neighborhood. Even way, way less.
So if you have details that prove or disprove the condition of the house, that would be relevant.
I've already touched on some details of my assessment of condition, but to summarize / expand:
I know houses. I have a moderately extensive construction background and am an architect. I have worked on many very run down places, and analyzed hundreds more. So while I haven't see the interior, there are a few things I feel confident about:
-It is the type of house that is typically highly desirable in any condition, even discounting it's exact location. Sizable tax credits are available.
-It wasn't built in a historic 'problem time' (boom times in housing typically lead to more instances of cutting corners)
-It does not appear to have any major issues from the exterior. Nearly 100% of the time, structural issues show some evidence on the exterior if you know where to look.
-I see no evidence of the usual hydrokinetic/soil issues you commonly find on old houses.
-roof appears aged but not EOL.
-windows appear 25-35 yrs old, probably EOL.
-Given general cleanliness and appearance, the house appears to have been lived in recently by somebody.
So I consider the worst case scenario to be a total gut & redo update, minor to moderate structural repair, full replacement of all systems, windows and roof. I think it's highly unlikely it's that bad, but we're assuming the worst.
Even if that's the case, it should sell easily at 30-40% higher than it was listed. There are two recent sales of properties in similar or worse condition nearby. Both ended up in bidding wars.
That's an awfully big difference. Big enough to allow a lot of sloppiness in my assumptions and still seem odd.
I have been told some details about the seller but will avoid posting here. Safe to say it seems unlikely most of the proposed motivations are present. But you might be right.
The OP does not know what the home sold for, and is claiming the seller lost a lot of money. He does not know if the reason it was priced below what he thinks it was worth, is the seller wanted to sell it within 24 to 72 hours which happens in the real estate business and put a sell quick, close quick price. The OP does not know anything about the sale.
All the OP is really saying, is I wanted that house, and I am angry it got sold before I could make an offer on it.
Example of how people will sell below the market not only real estate but other items as well. In 1953 when I was in the Navy stationed at Alameda Ca there was a good friend of mine bought a 1952 Cadillac in perfect condition for $100. He saw an ad for the Cadilac, and went to see it as it was advertised for $100. When he got there he saw a like new car, and the woman said yes it was for sale for $100. Then she told him why. Her husband had died, and left the proceeds for the sale of the car to his girl friend (one behind his wife's back). The will required her to sell it and give the money to the girlfriend. So she did for $100, and he said she was smiling a big smile as he drove it away.
This example is a good one, of why a seller may price a property below the market value. As this woman who felt vindictive her husband has put her in the position to have to sell it, and to give the money to his lover, there are lots of people that have different reasons to sell real estate.
As others have said, the property may have problems that the OP is aware of. The OP called it a pocket listing and thought that was unethical. As has been pointed out right and left, it was not a pocket listing. It just got sold, before it was in the MLS, or on a web site so he was aware it was for sale.
He says the Realtors are sticking up for the listing agent on this property and that is wrong. They are not sticking up for him, but are only pointing out there was nothing he did that was wrong or unethical.
Just because the home was sold fast (what every seller wants), he is angry that he did not get a chance to buy it, and is crying on this tread trying to find a way to get the agent into trouble for making a fast sale.
All the OP is really saying, is I wanted that house, and I am angry it got sold before I could make an offer on it.
That wasn't my reading of this thread at all. Everyone knows that there are unethical people in this world...and having a license doesn't automatically change those people. Likewise, getting a real estate license doesn't automatically make someone unethical. I run across properties for sale which are "agent owned" all of the time. A part of me can't help but wonder whether they purchased the property at a client's expense, or whether their purchase was more legitimate. I've seen both.
Of course, there's nothing wrong with an agent purchasing a property from a client or through an "inside" listing--provided that it is in the best interests of the Seller. Sometimes it is. Many of those reasons have been given in this thread. It's only a problem if an agent puts personal interests above a client's interests.
Quote:
Originally Posted by oldtrader
He says the Realtors are sticking up for the listing agent on this property and that is wrong. They are not sticking up for him, but are only pointing out there was nothing he did that was wrong or unethical.
There have been no facts given to prove that the agent was wrong or unethical. The opposite is also true--there are no facts in evidence to conclude that the agent wasn't wrong or unethical. But, if you believe in innocent until proven guilty...
While we were getting our home ready to sell, our real estate agent let several other agents know it was coming on the market. We decided not to show it until it was ready to list as we wanted it in tip top condition before we started fielding offers.
When it was ready, our agent had several showings already lined up before it ever went on MLS.
The thing I don't get is, how is this not a breach of duty to the seller? Isn't there a responsibility to the seller to market it widely, to try and get the best offer? How is this not advancing his own interests over the seller's?
Quote:
Originally Posted by MOD
I have been told some details about the seller but will avoid posting here. Safe to say it seems unlikely most of the proposed motivations are present. But you might be right.
Did it close? Why don't you stir the pot and contact the seller directly, maybe it isn't too late, especially if you are thinking it sold for 20-30% less, that amount is not something to sneeze at.
While we were getting our home ready to sell, our real estate agent let several other agents know it was coming on the market. We decided not to show it until it was ready to list as we wanted it in tip top condition before we started fielding offers.
When it was ready, our agent had several showings already lined up before it ever went on MLS.
That is exactly what the agent should be doing. Pre-marketing the property to help get a fast sale for the owner, exactly what I said earlier.
And the homes that get an agent that gives this kind of treatment to the listing almost always gets a fast sale, often before the property ever hits the MLS. The ones that just list the property and never give it the extra effort to sell it, often see listings expire unsold.
What happened in your case, is exactly what should be done by a top agent, and the type of personal service that the OP is complaining about. This type of special service, is what any good salesperson does no matter what their product is. This is why 85% of all new Real Estate agents entering the real estate business go broke and fail out. They never learn how to properly market a property, and do not go to the trouble to get it sold that your agent gave you. You got the service any seller should have gotten, but most do not. Too many agents are lazy, and do not take the trouble to network with other agents and know what the better ones are looking for.
Properly marketing real estate is more than just listing a property, and putting it in the MLS with a sign in front of it. It is putting special effort to get it sold, as your agent provided for you. You were not ready to have your home on the MLS, and not ready for it to be shown. However you agent went to the trouble to line up some potential buyers to see it as soon as it was ready to be shown. Signs of a top agent.
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