Offer Accepted then Declined (feedback, negotiation, dual agency, commission)
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I'm not sure if this is the right place but I figured I really need Real Estate Professional help.
Here's my deal. Found a house (dream house really) they are asking 148,000 (this is down from the original listing price of 154). Our offer is 156,000 with seller paying closing and with down payment assistance (11,000 total) the seller would net 145 (this is what they told us they wanted to net). The sellers agreed to this. After a week of their listing agent saying the sellers will sign, the sellers have verbally agreed, the sellers have signed, he calls today and says the sellers will not sign because they talked to a relative who didn't think the contract was good.... as in financing closing and down payment costs.
Now aside from the listing agents obvious lies. Just from the terms I have stated above does anyone see a problem with any of this? I mean if the bank is going to approve the loan I don't see why they would care what's going to be finance or not... they'll receive their money regardless. Really I think the listing agent is not that great and probably didn't couldn't explain the contract to them correctly.
I could talk to the listing agents broker and see what he can do to get the sellers to understand and sign... or ...? Should I just say hey you want 145 I'll give you 145 and pay closing cost and down payment myself. Although even with that I'm not sure I can becaue I hear with an FHA loan there are things buyers are prohibited to pay...
What was your realtor's role in this and what was their feedback to you about what transpired, or are you representing yourself? If you are representing yourself, it sounds like you need your own realtor. That would make more sense than trying to get anonymous feedback from a message board. I'm also unclear about your FHA comment. If your loan is an FHA loan I'm not sure that the transaction would qualify based on how you presented it.
Last edited by gbone; 12-26-2007 at 02:30 PM..
Reason: Additonal comment.
it doesn't sound like the listing agent lied it sounds like FAMILY butted in. i can't help with an fha loan because i don't know anything about them but i can tell you i (if i was the seller) would have been a little nervous too wondering why you needed 11 grand to help with the down payment, does this mean the buyer really can't afford the house and half way through the process the mortgage company will back out of financing and i'll (the seller) will be back at square one. that would have been my first thought (as the seller).
I'm not sure if this is the right place but I figured I really need Real Estate Professional help.
Here's my deal. Found a house (dream house really) they are asking 148,000 (this is down from the original listing price of 154). Our offer is 156,000 with seller paying closing and with down payment assistance (11,000 total) the seller would net 145 (this is what they told us they wanted to net). The sellers agreed to this. After a week of their listing agent saying the sellers will sign, the sellers have verbally agreed, the sellers have signed, he calls today and says the sellers will not sign because they talked to a relative who didn't think the contract was good.... as in financing closing and down payment costs.
Now aside from the listing agents obvious lies. Just from the terms I have stated above does anyone see a problem with any of this? I mean if the bank is going to approve the loan I don't see why they would care what's going to be finance or not... they'll receive their money regardless. Really I think the listing agent is not that great and probably didn't couldn't explain the contract to them correctly.
I could talk to the listing agents broker and see what he can do to get the sellers to understand and sign... or ...? Should I just say hey you want 145 I'll give you 145 and pay closing cost and down payment myself. Although even with that I'm not sure I can becaue I hear with an FHA loan there are things buyers are prohibited to pay...
Any advice appreciated.
FHA will allow you to cover all the costs yourself today. You could check $0 down options as well to limit your cash required.
The down payment assistance loans are becoming extinct. I used to do a 5-10 every year and I no longer have a source for them. Most of the companies that provide the DPA are losing their non-profit status from what I have gathered.
recuerdeme...
I agree 100% with your first statement. You do indeed need the help of a real estate professional.
I think you have all the right intentions, but you are at the mercy of a seller with a professional representing them and you are in it all by yourself. You are in the midst of a negotiation and you are at a disadvantage.
1. You identified as your Dream Home; does that mean that you are in fact willing to pay MORE than you've offered? (Please do NOT answer that question here, the listing agent may be a reader too!)
2. Real Estate contracts are only valid in writing. A verbal anything means absolutely nothing in terms of the acceptance/decline of an offer.
3. The quality/type of your financing is important to the seller because IF they accept YOUR offer, they are effectively taking their property off the market. If your offer fails, they have wasted their time and lost momentum.
My best advice to you my friend is to get a real estate professional that you like and trust on YOUR side in this negotiation...FAST. As a general rule, the seller is paying the listing agent a commission (they already negotiated that and YOU can't impact that with your offer...its a contract between them). If you have your own agent, there is a cooperative split of the commission between the two. If you don't have your own agent, s/he gets the entire commission.
Why on earth would you not put the services of a respected professional on YOUR side, but come here to a forum where you have NO idea of the background or credentials of those who will answer you...when the net cost to you is the same?
recuerdeme...
I agree 100% with your first statement. You do indeed need the help of a real estate professional.
I think you have all the right intentions, but you are at the mercy of a seller with a professional representing them and you are in it all by yourself. You are in the midst of a negotiation and you are at a disadvantage.
1. You identified as your Dream Home; does that mean that you are in fact willing to pay MORE than you've offered? (Please do NOT answer that question here, the listing agent may be a reader too!)
2. Real Estate contracts are only valid in writing. A verbal anything means absolutely nothing in terms of the acceptance/decline of an offer.
3. The quality/type of your financing is important to the seller because IF they accept YOUR offer, they are effectively taking their property off the market. If your offer fails, they have wasted their time and lost momentum.
My best advice to you my friend is to get a real estate professional that you like and trust on YOUR side in this negotiation...FAST. As a general rule, the seller is paying the listing agent a commission (they already negotiated that and YOU can't impact that with your offer...its a contract between them). If you have your own agent, there is a cooperative split of the commission between the two. If you don't have your own agent, s/he gets the entire commission.
Why on earth would you not put the services of a respected professional on YOUR side, but come here to a forum where you have NO idea of the background or credentials of those who will answer you...when the net cost to you is the same?
In this particular case since the buyer went straight to the sellers agent doesn't the seller's agent have procurring cause since it's after the fact. the buyer already worked directly with the seller's agent. At least in massachusetts the seller's agent (if the OP were to get a buyer's agent after putting in the offer) would not be obligated to pay a commission to the buyer's agent. Is this just a massachusetts law?
I have seen statistics that say the default rate is 2x as high on FHA with DPA as opposed to straight FHA.
I often had a hard time convincing sellers how it would all work with the DPA. It is a strange roundabout way to do a deal, but was a nice way to do a $0 down FHA.
surfing,
Great point...I'm not sure about the laws in Massachusetts...so I can't address that. In any state I think "procuring cause" can often be a challenge. I guess the issue to me becomes one of a client getting effective representation. IF they have indeed signed paperwork creating an agency relationship with the listing agent, then there isn't much that can be done. It seemed to me from the post that there was no written contract; therefore no agency relationship.
While you may be right (legally) with regard to the obligation on the part of the listing agent...however from a negotiation strategy point of view, as a seller, would you let a qualified, ready, willing buyer get away because your agent wasn't willing to coop on the commission? Whose best interests is that agent supposed to be serving?
Situations like this are part of the reason why dual agency is losing favor in many areas.
Are you pre-approved or approved by a mortgage broker or bank? If not, then get that done. They would be able to tell you what you can and can't do and how the deal has to be structured. I agree you should have a Realtor involved.
I'm not sure, but I believe since the original offer is dead in the water the buyer could get their own agent and start from square one. Procuring cause also takes in to account who can bring a successful deal to the table. Either way, it shouldn't really concern the seller or buyer. That's between the agents. At least in my area it is.
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