Home Buying in 92677>Question Details

K, Home Buyer in 92656

We have an offer in on a home in LN and the listing agent would not submit our offer because he said he had

Asked by K, 92656 Wed Feb 18, 2009

his own buyers, subsequently we finally got our offer submitted and it was countered back with this... "Acceptance is contingent upon first buyers withdraw of previous offer." This does not seem ethical or legal, am I missing something? This is not the first time we have come across a listing agent that doesn't want to submit offers unless you happened to be their buyer as well. Is this common practice now?

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24
The agent's duty is to submit all offers as they come in. If your offer was after the first then you would be in a back up offer status regardless of who the previous buyers are working with. In this crazy market with low inventory it's back to a sellers market and there are multiple offers on properties. Sometimes the highest offer isn't the best. Make sure that you consider your offers closely and try not to "low ball" in this competitive market. Listing agents do like to bring in their own buyers, this is common practice and not illegal, however all offer should be submitted to the sellers and the sellers choose. Unless it is a short sale where the bank usually works with one offer at a time. Good Luck!
1 vote Thank Flag Link Fri May 11, 2012
I agree with the previous answers wholeheartedly. This is an unfortunate practice in our industry and the unscrupulous characters will continue this until action is taken. Your best recourse, if you so choose, is to discuss this with the listing agent's broker. If they are their own broker, a call to their local Board of Realtors would be the next best step.
Web Reference: http://www.markgundlach.com
1 vote Thank Flag Link Thu Dec 8, 2011
Do you know if it’s a "short sale" or "bank owned" property? What was the “status” of the property at the time of your offer (active or back-up)? I know one thing…that all offers have to be presented!
Web Reference: http://www.markpalma.com
1 vote Thank Flag Link Wed Feb 18, 2009
I find this to be repulsive. The best offer should be the one to be accepted. As an agent I would be in favor of making double ending illegal. I think it would remove the greed factor in situations like this. The hard part about putting an end to double ending is where you draw the line. Would two agents who work for the same broker be able to do a deal together? I don't know. Maybe someone can answer that for me. I truly believe the real estate world would be a better place if double ending was abolished. I'm sure there's 100 reasons why this will never happen. I just can't think of any legitimate ones. Sound off people!
1 vote Thank Flag Link Wed Feb 18, 2009
Hi,

Yikes...this agent is definately doing the wrong thing for his seller. If your offer was higher and he only showed them a lower offer, he is risking his license. I would have your agent look into this.

As far as the counter...it sounds like a true back-up offer, sounds like this is a short sale and they are not going to open escrow. Normally they would write something like "subject to cancellation of current escrow" in this case they don't seem to have an open escrow.

I certainly wouldn't sit around and wait for this one...the listing agent is not very ethical and you might run into more problems if you go through with it.....

Sorry

Karen
1 vote Thank Flag Link Wed Feb 18, 2009
The agent does have to submit your offer, but the other offer might have already been accepted or may even be in escrow. But, assuming your offer came in prior to acceptance the listing agent needs to make the seller aware of your offer and should present it as soon as possible as it might be better than the other offer.

The home seller has to consider more factors than just purchase price when choosing which offer to accept. Terms are a major factor. If two offers aren't that different in price, other factors become more important in the home sellers decision. Contigent vs. non-contingent, closing date, size of down payment, cash vs. finance and ability to close come to mind.

With all that said, if it closes for $60,000 less than your offer and the listing agent tells you there was a small flood during escrow so the seller lowered the price, you might get a little suspicious.

Gareth Davies
949-283-3714

Realty ONE Group
Laguna Design Center
23811 Aliso Creek Rd. #181
Laguna Niguel, CA 92677
0 votes Thank Flag Link Thu May 9, 2013
Bingo!!!! As a REaltor I do not want to bad mouth all of us, however there are allot of them out there especially in today's market that will do such unethical thing. It's sad and I am sorry you are going thru this. Buyer's agent are just as frustrated as you are. And really not a whole lot can be done, because the listing agent can say that offer came in first or such bs. The only thing I can say if you can get a hold of the owner yourelf and let them know how there listing agent is performing, unthically and God knows what else she will do to push that offer. so if you are frustrated and do not want to go thru that again, have you tried homes that are not a short sale? Basically it's a standard sale, normal sale? You don't get too many offers and listing agents don't get too many offer on those ;-) so you wil be helping them get it off the market. Or you can go to new developments where they will help you hand in foot. None of this shenanegan stuff will be happening.
Happy Holidays.
Nazila
0 votes Thank Flag Link Thu Dec 9, 2010
Certainly not legal in New York, Not ethical anywhere else I can imagine.
Games are being played
0 votes Thank Flag Link Tue Apr 6, 2010
...in addition...regardless, all offers received should be submitted to the Seller.
0 votes Thank Flag Link Tue Apr 6, 2010
Just curious K, how did everything work out? It is true, if there is already an accepted offer, you need the first buyers release before accepting a new offer. I do not know the circumstances, but depending on when he recieved the first offer from his buyers in comparison to yours would determine whether what he did was ethical or not. I don't have all the details, so I can't say.
0 votes Thank Flag Link Tue Apr 6, 2010
Real Estate Law in our state mandates that the seller has to be presented all offers. He doesn't have to respond, but he has to see them all. It is not the agent's place to decide which one is presented. If the seller's agent has a contract already that they are negotiated....it is ok to counter yours back as long as they say it is a counter only the first contract does work. In essence you are a back-up contract. Now if this property is bank owned, the rep from the bank may very well have instructed the agent to only bring the best offer..that they did not want to see other offers. States may vary their rules but ethics are universal.
0 votes Thank Flag Link Tue Mar 30, 2010
Thank you Leanne Finley for the absolute BEST answer to K HomeBuyer's question. I agree with you 100%. Also, even though dual agency is legal in CA and many other states, in my 31 years in this business I can honestly say I have never represented both buyer and seller in the same transaction. I have a hard time sharing my loyalty between buyer/seller. As buyer's agents, we are supposed to be hard negotiators and if I rep the seller too...how will either party think I'm getting them the absolute best deal??? It also helps my E&O Insurance stay very low because I have never been sued by one of the parties after the fact for believing I had a conflict of interest.
0 votes Thank Flag Link Tue Mar 30, 2010
K Home Buyer, a better question would be why don't you have your OWN agent to represent you? You slow down your own process sometimes when you go directly to a sellers listing agent, since you don't have your own agent checking for current status reports, offers coming in, things like that.

A sellers listing agent isn't going to tell you all the same details he/she might tell your buyers agent, partially because you aren't likely asking the same questions, and also because if you haven't even been to the property yet, you may not be perceived by sellers listing agent as being truly able to make an offer fast (or possibly solidly) enough so seller doesn't potentially lose a first offer that may already be in play.

There are a lot of questions we can't answer for you with the details you've given, and it isn't appropriate, or fair, for any of the agents answering your question to jump to a conclusion that the sellers listing agent actually did anything wrong, or unethical. We don't have enough data to know or answer that.

So, my best advice, get yourself a buyers agent, a good one, and I think you'll have much better success at finding a good property. Ask your friends, relatives, even your employer for referrals to good real estate agents, and interview a couple of them.

There are plenty of top notch real estate agents in every area who are looking for a good working relationship with a quality buyer who asks lots of questions, and appreciates good advice and useful help.
0 votes Thank Flag Link Tue Mar 30, 2010
Perhaps it's time to get the agents' License number and file a complaint with DRE. I work a lot of short sales and foreclosures and regardless of how many offers there might be on a property, I owe a fiduciary duty to my seller (regardless if it's a bank or an owner) an unbiased submittal of all offers. And all offers should be submitted as expeditiously as possible.

Suzanne Johns
Prudential CA, Laguna Beach
http://www.SuzanneJohns.com
0 votes Thank Flag Link Tue Mar 30, 2010
No you are not missing anything and it is not common practice. I think it is common practice for the bottom feeder agents and the ones that could care less about any one other than themselves. You could have called his or hers broker and complained or even complained to the board but at the end of the day, that agent will say they never said what you are saying they said and nothing will happen. So basically, it's a waste of time. The counter you got back was telling you that they had an offer in front of you. I am guessing you were dealing with a short sale or bank owned home??
0 votes Thank Flag Link Sat Feb 20, 2010
Laura

Is perfectly correct. It is not fair but we also do not know all the facts. The business is hard and the agents are trying to the best for everyone and someone gets the home. Do not give up you are considered 1st back up in this position do not throw up your hands unless you find something you like better.

Michael Benninger
BenningerTeam.com
0 votes Thank Flag Link Tue Jul 7, 2009
Hi K,
My question would be "Did that agent have an ACCEPTED OFFER with buyers and seller signatures on it at the time yours was submitted to him? Whether it was his buyer or not he legally has to present all offers! Secondly if the agents buyers offer hadn't been accepted by sellers at the time he should have given you a "Counter Offer with Multiple Counter offer box checked"
to give you and his buyers the opportunity to come in with highest and best offer.
In a short sale situation this is more difficult because the first offer is usually the one sent to the bank and some banks don't want more offers sent to them until they get to the negotiating table and have had the home appraised.
Good Luck,
Laura Baron
Web Reference: http://www.Homes2Hearts.com
0 votes Thank Flag Link Fri Jun 12, 2009
My point is, this is much bigger than the situation below! If you haven't run into a greedy, double ending, won't call you back, agent you are very lucky. In good times and bad, they are out there. They are a pariah to the industry, and are the main reason for are used car salesperson status in the world!
0 votes Thank Flag Link Wed Feb 18, 2009
I'll re-address this scenario once again, before getting any of my peers below angry with me, for giving the listing agent a "benefit of doubt". In your original statement, your words are: "the listing agent would not submit our offer because he said he had his own buyers".

Did you hear this statement directly from the mouth of the listing agent, or from your agent? If, from your agent, did he or she hear such a statement directly from the listing agent's mouth, or POSSIBLY misinterpret something the listing agent said - such as "we already have an accepted offer" which usually means that the property is closed off from "accepting" an additional offer. ( Subsequent offers can be received, just not accepted, which is a huge difference.)

If the listing agent DID make such a statement, they would indeed be not only wrong, but, in my humble opinion, quite stupid. In today's market there are a LOT of agents who are not only limited in their experience, but limited in their knowledge. Many of these type of agents are being quickly flushed out of the system - or soon will be if they are, indeed, pulling shenanigans.

The bottom line seems to be that you now have an acceptable offer, subject to the cancelation of the prior offer, so you seem to be in a good position to secure the property.

One final word on the subject, just because the listing agent has apparently re-opened the property to you, if the original buyer satisfies any reason the seller sought to cancel, they could STILL be, and remain, in first position, so I wouldn't count your chickens until that cancelation has been completed. Good luck with your purchase.
Web Reference: http://BobPhillips.net
0 votes Thank Flag Link Wed Feb 18, 2009
I would like to think the the Listing Agent is acting properly, in that he is avoiding a conflict of interest. In Georgia, we must "present all offers". Also, it appears to me that he is protecting the Seller, keeping them from having to contracts on one property.

He already represents the Seller. Representing the buyer and seller, in Georgia, is called Dual Agency. Although legal, at Metro Brokers /GMAC Real Estate we do not offer Dual Agency, since is may cause confilcts. Rather we do designated agent (refer/assign to the buyer to another agent). Or if the buyer prefers they can represent themself, and we do "ministerial acts", basically fill out the paper work, while still representing the Seller.
As a buyer you should find your own agent to represent your interests. Email me if you would like a reference to a buyer's agent in your area. randy.ballard@metrobrokers.com
Web Reference: http://www.randyballard.com
0 votes Thank Flag Link Wed Feb 18, 2009
Bob

How is anyone jumping to conclusions when the question clearly states that the listing agent told them he had his own buyers?

Tony
0 votes Thank Flag Link Wed Feb 18, 2009
Maxine is right on.....sellers need to be aware of all offers.

Bob....since you mentioned me, when you read the question it clearly indicates that the listing agent wanted to show his buyers offer first. So on that assumption....my answer is correct. At least that's how I would handle it. But we find on this site that there are many agents out there who do things differently. That's why it's so important for the buyers and sellers to make sure they have a good understanding of their agent and how they work.

Karen
0 votes Thank Flag Link Wed Feb 18, 2009
It doesn't make any difference - "All Offers are To be Presented to the Seller" - if there are other offers on the table or negotiations are going on on another offer, or even if the seller has accepted the other offer....it doesn't make any difference - "All Offers are to be presented to the Seller" - now ...depending on where he is the seller may not be able to answer or respond - but there are LOTS of reasons that he needs to know that another offer is on the table....other than it is his agent's responsibilty by law, even if he has accepted another offer, it may not close, for some reason it may fall thru. Now the agent should also inform you that there are 1 or 2 or whatever offers on the table already (if there are) and he can't tell you what they are for but in fairness should tell you that you have competition.

Max Allen - TRI-Group Realty, L.L.C. Georgia
0 votes Thank Flag Link Wed Feb 18, 2009
It sounds like you ( and/or your buyer's agent.) may be jumping to conclusions that the listing agent had "their own buyers". They might have already accepted an offer - from another agent's buyers, before your offer was submitted, and just not had time to report that pending sale to the MLS, as they are "supposed" to do.

Later, if that "escrow" started getting shaky, or turning sour, the listing agent might have re-opened the listing to the market, while waiting for the cancelation paperwork to process, which typically takes a few days. Technically, they cannot officially accept a subsequent buyer's offer until that cancelation paperwork has been signed by all parties. You may have been fortunate to have been still waiting in the wings.

There is nothing fishy or illegal about the sequence of events that I've just described, and I would submit that an occurance is common practice, and happens often.
Web Reference: http://BobPhillips.net
0 votes Thank Flag Link Wed Feb 18, 2009
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