Well, you certainly have gotten a good lesson in dual agency in the Garden State! My fellow NJerseyans have explained it very thoroughly.
I am curous if you asked for any comps prior to making your first offer?
How and why did you decide to offer 15% below list price?
It would have been helptful if that information was made avaialble to you right from the start, as the sellers clearly didn't see your offer as a viable or reasonable one - hence, they refused to give a counter ofer.
Now the question is.what to do next, moving forwar!
Ok, so you have several options (assuming you haven't signed any agreement with the first agent)
1. Speak with the Broker/owner of the office and ask for him or her to prepare your new offer. Keep in mind, you will still be working in a dual agency situation, but you will have a new person who will hopefully instill more confidence in you, and offer you comps. The dual agent cannot interpret the comps, but they can present them to you.
2. You can certainly reach out on your own and find someone from another company to represent you as a buyer's agent. No one "owns" a buyer.
If there is another offer coming in, then you may have to work quickly.
You should be honest with this new agent, and let them know exactly what has transpired up to now.
They need to know you already made an offer through the listing agent.
The new agent may very well have to work out an arrangement with the original agent regarding commission, but that shouldn't keep you from moving forward with your offer, or hopefully having it accepted.
Best wishes......hope it works out for you!
Prufential NJ Properties
Web Reference: http://www.debbierosesells.com
A disclosed dual agent WORKS FOR BOTH THE BUYER AND
SELLER. To work as a dual agent, a firm must first obtain the informed written consent of the buyer
and the seller. Therefore, before acting as a disclosed dual agent, brokerage firms must make written
disclosure to both parties. Disclosed dual agency is most likely to occur when a licensee with a real
estate firm working as a buyerâ€™s agent shows the buyer properties owned by sellers for whom that firm is
also working as a sellerâ€™s agent or subagent.
A real estate licensee working as a disclosed dual agent must carefully explain to each party that, in
addition to working as their agent, their firm will also work as the agent for the other party. They must
also explain what effect their working as a disclosed dual agent will have on the fiduciary duties their
firm owes to the buyer and to the seller. When working as a disclosed dual agent, a brokerage firm must
have the express permission of a party prior to disclosing confidential information to the other party.
Such information includes the highest price a buyer can afford to pay and the lowest price a seller will
accept and the partiesâ€™ motivation to buy or sell. Remember, a brokerage firm acting as a disclosed dual
agent will not be able to put one partyâ€™s interests ahead of those of the other party and cannot advise or
counsel either party on how to gain an advantage at the expense of the other party on the basis of
confidential information obtained from or about the other party.
If you decide to enter into an agency relationship with a firm which is to work as a disclosed dual
agent, you are advised to sign a written agreement with that firm.
I hope this helps.
Robert C Ster
How much was the house you were looking at? On the Market for 8 months... pricing related to those in the area? Condition of house? On a $250,000 house for you to go in at 15% under the asking, that would be $212,000... The "limbo" portion of the real estate company and the "there is another offer" on the house could very well be a way of saying.. thanks, but there is another offer that is higher than your offer.. and you would not be taken seriously as a buyer and at that point, as excited you are about the property you were never considered as a serious buyer.
Just curious of how did the entire picture presents itself.
Thank you for taking the time to update us. All too often, we never hear back from the original poster with an update.
I am glad you have someone new representing you..and that you have at least progressed with your offer.
I, too, am confused by the idea that there is "another offer" hanging around in limbo. That's most unusual.
Clearly, the other offer, if it exists, isn't acceptable, or they would have accepted it already.
I hope this does work out for you, as it is obvious that you truly want this home. You should expect a timely response to your new offer............hopefully this can be resolved quickly, in your favor.
Best wishes..........here's hoping you get the house...........
If, for some reason it doesn't work out - there are other houses out there waiting for a well quaified buyer like you!
The new agent is nice enought, but the first thing we heard again was "you know, there IS another offer on the property". What a turn off! This "other offer" has been around since we made our first bid -- now weeks ago. I wonder why they haven't moved on this offer by now? Actually, I think I know the answer. To be honest, this experience has given us a new perspective and if this doesn't pan out, we are more than ready to take our mortgage pre-approval and down payment money and move on. The time that this agency has had us hanging in limbo has only helped to diminish the original excitement & interest we felt about this home. Maybe it is a blessing in disguise. If there is anything I have learned is that I will never, ever contact a listing agent directrly about any property that interests me. Sorry for the rant! I really do appreciate all the input you have taken the time to share; thank you!
Unwavering Commitment to Service
I can now understand how the events leading to your offer took place.
You visited the open house - fell in love with the home, and the next thing, emotions took over, and you were writing an offer. It happens!
The biggest part missing from the equation was that you weren't offered a market analysis of the home, so that you could see the very same information, I would assume, the sellers saw before pricing their home.
OK, so since you can't go back, you need to move forward.
Please don't get too bogged down with the "procuring cause" that has been mentioned.
Simply put, procuring cause comes into play when an agent was insturmental in introducing the buyer to the property, AND generating an offer. The first agent did both, and may take this to arbitration to claim all or part of the commission.
So, should you choose to find a new agent, this will most likely come into play, BUT - it wil be handled between the agents, aside from the transaction. It should not impede your offer from being presented or accepted by the seller.
The agents will work it out, but that is why I said you must be honest with any new agent so they know what they will be dealing with.
The idea that you should hire a new agent (from another company) and pay them their commission, AND factor that into your mortgage , in my opinion, is ridiculous.
You will end up paying a lot more than just the commission over the life of the loan, with interest factored in.
Speak to the Broker or Manager.........if you don't feel comfortable moving forward with that company following your discussion, then find someone new from another company, and fill them in on all the details.
If you'd like to discuss this further, please reach out to me, as I would be happy to clarify any questions you might have.
Everyone here means well. but it may be confusing with such varying opinions!
I have read ans of other agents and they are right. That the new agent you hire will loose commission. However, I would speak to the Broker of this Agent's company and without being too critical explain the situation and ask for comps. Then take it from there. In the meantime work with another agent of your choice. Interview agents before you emgage them. Keep looking for homes, there are plenty of beautiful homes and you may end up geting even a better home and deal.
Another agent that makes an offer for you will probably lose the commission after the fact due to procuring cause. There is nothing wrong with dual agency at all. There is nothing that a so called "exclusive buyers agent can do any differently then what has been done. absolutely nothing.
Ask the agent from the open house to do a CMA for you, you wil get your comps from that and see what you want to offer. Did you ask prior to making an offer? Due diligence is the key to any transaction, both your due diligence and that of the agent making the offer for you.
Do you think if you came in with another offer at this point and your agent said.. I am an exclusive buyers broker, anything will change? No, not at all. Your offer would be presented like any other and a response will be given. You get no points or dollar credit for being with a person that chooses a busniess model that only represents buyers it is just a different way to get clients.
Get your offer on the table and stick with it..
As I read all of the statements sounds like you are yet another victim of the dual agency explanation screw up However since your offer was never considered or maybe not even submitted who knows. One thing is clear the agent was looking to get both sides not to say there is anything wrong with it but you should have really understood what you signed this is why the forms says INFORMED CONSENT.... Which is suppose to mean you understood what you signed. In most cases they nver know what they signed because each agent has their own way of explanation. Now what to do! Since all you signed was a disclosure you have the full right to hire your own Exclusive Buyers Broker where the only agency is Buyers Period. In this case you never have to worry about signing anything but the buyer agency agreement which you agree to protect the agents fee.
In most cases the agent will except what the seller is offering as a share fee, however that being said since the other agent did have and offer on this property with you there maybe and issue of Percureing cause which means since he had your offer first he would be intitled to the commission. Now that being said if you hire a buyers broker you can infact pay this person yourself and include the fee in your mortgage if you so choose then the above issue is a moot point.
By doing this the buyers broker will provide you and guide you through the entire process and make sure you do not pay to much... The second thing is your mortgage company is not going to allow over payment when the appraisal is done unless you are willing to come up with the difference. Teh Buyers Broker will have your best interest to protect and your's alone. By the way dual agency is only legal I think in three states Jersey being one of them I think it should be out lawed
Just go get an Exclusive Buyers Broker it not just who get paid from whom it CYOA and the EBB will do that for you.
Exclusive Buyers Broker
Better Homes Realty Cape May NJ
You are right, we did not sign an exclusive buyer agency agreement. We signed the Acknowledgement of Disclosures, stating that we would have a Buyer's Agency relationship -- and consent to Dual Agency "should that situation arise". In our case we didn't have to wait, it was so from the get go.
In all honesty, we didn't think the dual agency thing would be a problem. Not from the way the agent explained it. In retrospect, we should have read the pamphlet in full and carefully. We just skimmed; I realize this is no one's fault but our own. Big lesson learned!
@Debbie - many thanks for the detailed response. Your suggestions are really appreciated!
As for how we came up with the 15% below list offer, it was a very last minute & I guess a stab in the dark. We had no info before bidding, or after. The listing realtor called us the day after attending an OH & we were in his office that evening making the bid. I searched for sold comps on my own that afternoon, and could only find comps that had sold 9-12 months ago. I found 1 home that had sold 4 mo ago, but it had a larger lot & 2 additional baths, also not same style home. Don't know what the list price was on that house, or the condition, but it sold for 12% less than the asking price of the house we are interested in. I didn't consider it a true comp but that was the only recent info I could find for that neighborhood. We decided to start at 15% below, hoping to have room to negotiate to our pre-approved mtg amount. It definitely wasn't our best & highest offer, but we certainly never intended to insult the seller. Just wanted to initiate a transaction. It's been quite a learning experience!
With dual agency you can't have undivided loyalty, so for purposes of negotiation the listing broker should be supplying the same comps and market data to both parties so each can make an unbiased decision. It is clear that protocal has not been followed.
While you had put in an initial offer, it didn't get accepted. You do have freedom of choice to get your own representation to try it again a different way. Unless you signed an exclusive buyer agency agreement that says you have to pay that broker a commission for finding you a home(and it sound like you did not), the ball is in your court.
Good luck to you.
Hope that helps.
As Bill said "unless you have signed an exclusive agreement with this agent, you shouldn't have any difficulty identifying another agent to assist you". You need to check the copies you got from this agent when you presented the offer. You need to find out if you signed an EXCLUSIVE BUYER AGENCY AGREEMENT.
Jersey, again If you need my assistance please feel free to contact me.
We went to the open house on our own, and answered honestly when asked if we were working with an agent; we were not. We stopped at the OH on a whim. The day after the OH the listing agent called us to follow up & asked us if we were interested in the house. We advised him that we were.
Although the listing agent called us back initially, we never heard back from him. Instead, it was his associate who dealt with us from then on. I suppose this is done so that the listing agent could represent the seller, and the associate represent us as the buyers; regardless, they are both with the same brokerage and work out of the same office.
In addition to signing the bid, we did also sign the disclosed dual agent form. We had no choice, if we wanted to make a bid at the point. Or atleast, we didn't think we had a choice, as it was our understanding that once we made contact with an agent, we were obligated to work with/through them.
As I mentioned in my original post, our bid wasn't even acknowledged by the seller. Doesn't this cancel the transaction completely? Does it also cancel the dual agency agreement we signed with this brokerage?
Can we get an agent from another brokerage to represent us as buyers at this point? We would like to re-bid on this property, but not with the listing brokerage.
As a side note, I would like to point out that neither the listing agent, nor the associate that eventually handled our bid, were present at the OH. The person running the OH we attended was a 3rd party from the listing agent's office. As a matter of fact, to this day, we have never met the listing agent, and we met the associate for the first time on the day we made the bid.
You've found out that hard way why it's always best to have your own personal representation. It's difficult for people with the purest thoughts to remain impartial and represent both parties to the level of the customer's expectation.
The fact that the agent seems unwilling to present recent comparison property to you should be a "red flag." It may be worth a conversation with their broker to explain your concern and interest in moving your business elsewhere.
The reality of this scenarion is that even if you move along to another agent, any offer presented to the seller's will have to find its way through the hands of this agent. It should not be regarded as too late to change ships in midstream.....unless you have signed an exclusive agreement with this agent, you shouldn't have any difficulty identifying another agent to assist you. Of course, you should brief them on the history of this very early on.