Home Buying in 90025>Question Details

HYC CHY, Both Buyer and Seller in Spartanburg, SC

If the selling agent lists a short sale & the contract is up can my agent become the sellers new agent (dual) in the middle of our short sale?

Asked by HYC CHY, Spartanburg, SC Tue Apr 30, 2013

...of the transaction? My realtor who knows quite a bit about short sales stepped in to help the listing agent (because she didn't know a whole lot about short sales). He got the ok to hold the sellers hand and walk them through it (being somewhat transparent all along). The listing agent and the sellers are at odds over something, so my agent who's been helping them all along (with tax liens, paperwork, etc) wants to become the listing agent now too. Problem is we're 30 days away from closing date with an unresolved tax lien (that supposedly is going to take 60 days to dismiss from the Fed IRS). The sellers asked for an extension the bank denied. I'm worried about the new relationship between my agent (who's spending a lot more time and effort on the sellers-I think due to the fact he let some personal information of theirs to slip through the cracks to us) and the sellers. Does all this sound ethical? I'm worried about the dual representation

Help the community by answering this question:


Your agent would need to check how the contract is written. That is a fine line though if you are still working on the same deal that started when that agent was still contracted with the Seller.
0 votes Thank Flag Link Wed Mar 19, 2014
I would think his board of Realtors might fine your agent for doing that. I Considered unethical. You could end up with a lien on your new house from the seller's agent. As you went right along with it.

Most listings have clause that says if they property is sold during the listing period and closes later, they listing agent is still due their payment.

Yes the old listing agent probably has a valid law suite against the sellers, your agent and maybe even you.
0 votes Thank Flag Link Wed Sep 4, 2013
I reiterate my earlier comment. Do not sign any new documents and speak to a California real estate attorney immediately.


Meredith McKenzie
Associate Broker 01142186
Podley Properties
0 votes Thank Flag Link Wed May 1, 2013
Thank you for all the wonderful answers, I truly appreciate them all. I just met with my realtor at the sellers house (where he had just met with them and had them sign a contract with his agency but under his brokers name-so it wouldn't look bad at the bank-even though he is pretty much their agent now too). He told me although the original selling agent let him fly this thing for a while she has now written him what he calls "the longest 180 day clause" he has ever seen basically telling him she still wants in and keep her commissions. He said under the new dual agent thing that the fridge would not convey (when we thought he would fight that for us knowing we wanted it). He said the only way they would agree to it is if they could find it under the old listing agents listing and he said "he and the sellers looked on line together and couldn't find it". He said unless I could find the paper saying it conveyed it would not (basically fighting for them now). He said that the old listing agent may have gone in and removed it. I said "why would she want to do the sellers any favors knowing they didn't extend the listing with her for this deal"? He said "I don't know but if it's gone it doesn't convey". Right after not fighting for what we want he then asks if they can stay in the house a few days after we close because they don't have the money to stay in a hotel yet! I'm a nice person and would definitely consider it but...uh, I don't even know. All of this is fishy. Then to top it off when I wouldn't sign dual agent b/c I wanted to talk it over with my husband he got upset (I think b/c our closing date is May 31 and he needs it???). I said my husband wants to think about it because if there is dual rep we would like to consider signing a new clause stating that the fridge conveys. He said we couldn't do that because we would have to go through a whole other contract which would restart the short loan process and there would be no guarantees that the other bank might not take these "supposed other two back up offers that are supposedly higher" I don't even know what to do at this point, we've worked so hard for this deal and house!
0 votes Thank Flag Link Wed May 1, 2013
Short sales take a long time and you have to wait it out and sometimes they never close. You signed an agreement and it sounds like the offer could have expired but if anyone tries to stop it you will have to start over from the beginning and that is not what you want to do so hang in there and good luck. Tom Inglesby, Broker REMAX
0 votes Thank Flag Link Wed May 1, 2013
It does not matter if the listing agreement has expired. Assuming that you have a valid purchase contract with all parties working in good faith to perform, the listing agent is the procuring cause and their relationship with the seller has been ratified in the purchase contract under the agency confirmation clause. Any attempt by your agent to 'get' the expired listing will likely result in the listing agent filing a dispute with the local Board of Realtors. If that happens, you will be summoned to testify as a witness.

While your agent's efforts are probably well-intended, s/he has crossed an ethical line (not a legal line) by developing a relationship with the sellers and now trying to pull the sellers away from their original agent.

You may not like my advice but here it is: Consult a real estate attorney immediately to determine your rights and whether you should cancel this purchase contract and move on to another property. You will also need to decide whether you will still feel comfortable being represented by your current agent in light of the facts you have presented.

Good Luck.

Meredith McKenzie
Broker Associate #01142186
Podley Properties
0 votes Thank Flag Link Wed May 1, 2013
In your purchase contract paperwork with the seller, it should state who is representing who. The Agency Disclosure forms should have been signed and the confirmation of representation stated. In my opinion, in order for this to change you would need to cancel your purchase agreeement and start over (assuming the listing contract is no longer in force). Dual agency would need to be disclosed and new contracts signed. (There may still be an argument over commissions). That said, if the bank is not willing to grant an extension, this is a moot point. I am not sure that what your agent is doing (helping with the short sale negotiation) constitutes dual agency but you raise an interesting point. I am interested in what others think.
Good luck,
0 votes Thank Flag Link Wed May 1, 2013
Legally the agent has not done anything wrong. If you are uncomfortable with the situation, you need to address it with that person, or speak to his broker.

Dual agency is legal....but is hard to do cleanly. It can only be utilized however if both parties agree...so consent of buyer and seller is needed for this to happen.

Good luck.
0 votes Thank Flag Link Wed May 1, 2013
I agree with Suzanne, but I would suggest that the selling agent would not be on shaky ground if he worked something out with the listing agent, more compensation, since he is doing more of the work. But going around her to try and steal the listing would be wrong, if that's what's happening! Sticky business these short sales. I would like to see them become a thing of the past!
0 votes Thank Flag Link Wed May 1, 2013
First of all, you would have to consent in writing to the dual agency representation, as would the seller. Second of all, you may have a battle on you hands between the two brokers over something called procuring cause, especially since you are already under contract. And I do not see how your agent becoming the listing agent is going to resolve your issue with the banks refusing an extension.

I normally do not have a problem with dual agency, however, I have a legal background, I was a paralegal for many years, and the rules of ethics were pounded into my head. I do believe it is possible to represent both buyer and seller and do a thorough and ethical job of both at the same time. However, in this case thee are other considerations and I would be talking to my OWN broker before even suggesting it here.

If you are worried about dual representation, you should not give your consent. And, before you DO give you consent you need to talk to both brokers, the owners of you agent and the listing agents' offices and ask them both about the issues I raised here.

I understand your agents' frustration. I am a short sale specialist myself and I have had more than one transaction where I had to do MY work as well as the other agents' work, but that is MY ethical duty to MY client. Sometimes, that's just how it goes.
0 votes Thank Flag Link Wed May 1, 2013
HI there,
While in the middle of a transaction, the listing agent retains his status as listing agent, even if the listing contract has expired. So I understand that the buyer's agent is helping in the background, but the listing agent remains at his post.
If you appreciate this information, please give me thumbs up , even if you dont like what is happening with the agents.

Muriel Levin, Broker - Realtor
HAFA certified,Certified Negotiator, Short Sale and Foreclosure Resources Specialist.
Votre agence immobiliere de confiance sur Los Angeles et toute la région de la Californie du Sud
Agent Immobilier Francophone a Los Angeles, Hollywood,Santa Monica and Beverly Hills .
Residence, income properties and commercial leases
323 363-91-40
Muriel Levin @ gmail.com
Web Reference: http://www.muriellevin.com
0 votes Thank Flag Link Tue Apr 30, 2013
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