Home Buying in Oakland>Question Details

HBNewbie, Home Buyer in Burlingame, CA

We put an offer on a short sale condo with the listing agent. It was chosen by the seller, but now the agent is ignoring us - are we getting scammed?

Asked by HBNewbie, Burlingame, CA Thu Jan 24, 2013

We saw a condo that we liked that was going through a short sale and it seemed like a good deal (after further research it is probably an OK deal). We were not seriously looking so we did not have an agent of our own yet. The listing agent said there were a lot of offers on the property and said that he could represent us. We thought that as long as we were firm and comfortable with our offer that that this could maybe give us an advantage. We confirmed that the agent is a registered broker with no complaints filed against him. He is also licensed as a mortgage broker, so we agreed to let him prequalify us (realizing that we were scratching his back, but hoping this was s symbiotic relationship).

It's been 2 weeks since we were told our offer was chosen to submit to the bank and since we gave them our permission and information to prequalify us, and the agent is now not responding to emails and is being rude and unhelpful on the phone. I am getting uncomfortable, can I jump ship?

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Sounds like you've gotten yourself into an awkward situation. This is one reason I always recommend buyers obtain representation from someone other than the listing agent. A buyer's agent has a fiduciary responsibility to the buyer--looking out for YOUR best legal & financial interests--not to the seller.
Questions: Did you sign an Agency Relationship with your agent? Did you receive a fully ratified contract when seller accepted your offer? Did you receive a written preapproval from your lender?
In any event, from what you've described, I see no reason why you could not write your agent and request that he cancel your offer & issue a Cancellation form for you to sign. I would also recommend you find a good, highly recommended Realtor to serve as your Buyer's Agent (I'd be happy to refer you) and notify your current agent in writing that you are hereby terminating your Agency relationship with him. Then, go out & find a better, cleaner deal--they're out there!
1 vote Thank Flag Link Thu Jan 24, 2013
Thanks for your response, we did sign a agency relationship, but we have never received a copy of the contract that was supposedly accepted and signed by the seller. We were preapproved by our bank before we agreed to let the listing agent act as a mortgage broker for us, but we have received no information from them since we sent them our information to preapprove us over a week ago. We signed a short sale addendum that says that the contingency period is 45 days from Acceptance, but I'm now confused about whether that means acceptance by the seller or acceptance by the lender. Thank you so much for your good advice!
Flag Thu Jan 24, 2013
Hi HBnewbie,

It may not be the answer that you want to hear, but your case is precisely why realtors advice that buyers should get an agent to represent them. You are now experiencing that going with the listing agent is not always the best option. The listing agent represents, foremost, the sellers.

Check your contract offer. Has it been signed by the sellers? If yes, does it have dates by which you can back out without any penalties? Most contracts have certain dates by which a buyer can cancel the contract.

Talk to an attorney, or contact a local realtor that may be able to assist you.

Douglas Lagos
Realtor, Certified HAFA Specialist (CHS)
Coldwell Banker Residential
Web Reference: http://www.douglaslagos.com
1 vote Thank Flag Link Thu Jan 24, 2013
Hmmmm,
It seems either you were not listening or the agent failed to review the short sale process with you.
What should have been, and most likely was, shared with you is, you, as the buyer, are the least significant participant in the short sale transaction.
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Short sales are highly complex and are at the mercy of the banks or servicing companies involved. The fact that the seller accepted your offer means NOTHING! You would have been advised that a short sale is like negotiation with a black hole, everything goes in, disappears, and nothing comes out.
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It will not matter how often you call or how many messages you leave with your agent. When the bank responds, you will be informed. Until then, there is nothing to discover. You don't even know the real price until the bank responds. You really have no PRODUCTIVE alternative but to WAIT.
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You seem to be a poor candidate for a short sale. If you are impatient with a 2 weeks of lost hand holding,, you will boink when the rest of the abuse becomes a reality.
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What was disclosed to you regarding the short sale process, (and you actually signed those documents) has proven to be true. Be aware, your purpose, the role you play, the event you triggered is all that was needed. You can accept the reality of the short sale process or bail out. You may lose your deposit if you bail out before the bank responds. This is called skin in the game. If you are not vested in the process, you will, very much like 70% of all short sale purchase offers, ultimately waste everyone time. No one wants their time wasted. So relax and wait for the bank to respond.
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Relax now. Your agent will contact you when the bank responds.
Relax, take a deep breath. Be prepared for the banks counter offer or their formulaic "highest and best' reflex. Have a strategy. Trust it. and relax.
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There is nothing to share with the buyer...nothing...until the bank responds! No volume of phone calls or messages will change this reality. What such calls do produce is better call screening.
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If you do jump ship, 70% of offers on short sale fail due to 'overboard' buyers, be aware that short sales may be incompatible with your DNA. Stick with traditional sales.
0 votes Thank Flag Link Fri Jan 25, 2013
Please note that there is a difference between Agency Disclosure and Buyer Broker Agreement.

Agency Disclosure shows that you are represented by this particular agent -- and specifies for which property.

A critical piece of the Buyer Broker Agreement specifies for how long you are bound to be represented by the agent -- for example, it could be for a year. If you asked another agent to represent you on another transaction, this particular agent holding the buyer broker agreement may be entitled to be paid the commission instead.

Have you attempted to speak with that agent's broker regarding the lack of response.
0 votes Thank Flag Link Fri Jan 25, 2013
The reason the agent wanted to represent you is because he makes more commission. By acting as your lender he makes even more money. You already know that so you went with him because you thought that it would benefit you in some way. What did you expect to gain? Did you expect him to cut you in on his extra income? Did you expect him to twist the seller’s arm on your behalf as your agent – he is already the agent of the seller.

Now you are figuring out that the agent is working for himself…not you and not the seller but himself because of the fat commissions that he plans to receive.

Your agent should be able to tell you if you can cancel. Oh…right…your agent is not talking to you.

It appears that you are open to making a real estate investment. If you take your paperwork to another agent who perceives the opportunity to help you make this investment, perhaps you can get some advice on your current transaction. You have an agency relationship so a new agent who is introduced into this ongoing transaction will have to be careful not to tread on that relationship. I believe that, on your request, another agent can get involved.
0 votes Thank Flag Link Fri Jan 25, 2013
HI HBNewbie... Sorry to hear about your situation... Hope you know not all realtors behave this way... Not all agents are realtors... Realtors@ abide by a Code of Ethics...No matter how much checking you do on a particular agent its most important how you feel and if you feel you and he/she can work together... If you enter into an Agency Agmt... agree to a reasonable length of time this will keep the agent motivated and provide you with some security... best not to leave it open ended... as a buyer its never a good idea for you to work with the listing agent...their first duty is to the seller not you the buyer... take this as lesson learned. I completely agree with all responses before me... My personal answer is ... Maybe... Most Likely...

Depends on varying factors including... what you signed, what they signed and terms... keep in mind your offer and your prequal are not one in the same... they're separate deals... (even tho the listing agent handled both)... its not unusual for Buyers to back out of their offers... its happens more than you know... Based on your initial info... all you need to do is send in a brief note withdrawing your offer, date and sign it.... include a cc to the broker of his/her co or if you've found a great new realtor have him/her do it for you... Good Luck and Thanks for the Question...
0 votes Thank Flag Link Thu Jan 24, 2013
It is inexcusable for any agent not to respond to your calls. Even if they don't have an answer to your question, he could at least say he still doesn't have any information but will surely update you as necessary.

If you are uncomfortable with the agent....have you at least tried speaking to the agent's broker to express your concern?

Do you still like the condo, or would you prefer to move on? if you want to move on you can institute a cancellation of contract and to also notify the agent that you're no longer going to use him. Either way, make your feelings known, and not just on this forum.

Good luck!
0 votes Thank Flag Link Thu Jan 24, 2013
The first thing to do is look at your contract and see what terms you have agreed to. I would also contact a local Realtor and or a real estate lawyer to consult with. You will be able to cancel the contract, but of course you want to make sure your deposit is safe and that you will have no penalties.

Wishing you the very best!

Simone Hoover
0 votes Thank Flag Link Thu Jan 24, 2013
I am not sure I understand the logic why a buyer will work with the listing agent to represent them. Most buyers think they get a better deal (which is not true). Look at it this way: from a representation perspective, the fiduciary duty of the listing agent is to the seller, not the buyer. The listing agent will negotiate to get the best price possible for the seller, not the buyer. Interview a couple of agents, and make a decision to work with one of them. It is really your best option.
0 votes Thank Flag Link Thu Jan 24, 2013
It may surprice some people; but Realtors are human:

As much as they try to represent both sides; most agents would be loyal to the first client.
Can't blame them.

Yes, you can jump ship: Just don't get involved in the Commission Split; it is None-Ya.
0 votes Thank Flag Link Thu Jan 24, 2013
I definitely would, I would also recommend finding a qualified agent on Trulia that is around your area that could work for you on your behalf. I'm sorry you're dealing with such a headache. Let me know if I can help you with anything.

Claire Wills
510-435-7822
0 votes Thank Flag Link Thu Jan 24, 2013
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