Home Buying in Clarkston>Question Details

Bonita, Home Buyer in Clarkston, MI

Hello-Please advise regarding a real estate agents' ethics. I put an offer on a home. I was told by my agent

Asked by Bonita, Clarkston, MI Thu Mar 27, 2008

that they refused thinking they would receive a better offer. I was encouraged to increase my offer, and did so. The house was in the redemption period of bankruptcy and was going back to the back less tha 30 days of my original offer. Wasn't my agent suppose to tell me this? Was he really working on my behalf?

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Bonita, if your agent knew and was representing you as a Buyer Client, then yes.
Did she know?
Web Reference: http://MissyCaulk.com
1 vote Thank Flag Link Thu Mar 27, 2008
Bonita,
Not knowing all of the circumstances, but I do know that , hopefully, you signed a Buyers Agency form that states your agent is working on your behalf.
1 vote Thank Flag Link Thu Mar 27, 2008
Bonita,

It sounds to me that your agent should have told you that the house would be going back to the bank if he knew.

The question is: did he know this when the negotiations were starting? If so, then no, he wasn't fulfilling all his fiduciary obligations to you (at least as defined here in Minnesota...). Material facts about the property should be disclosed to the principal (you).

If he didn't know this then, he should have told you as soon as he knew. If he did this, then I don't believe you have anything to be concerned about.

Good luck!
1 vote Thank Flag Link Thu Mar 27, 2008
Bonita,
I am breaking down your question into smaller pieces which may help clarify........

1. You mentioned "redemption period" and usually that is specific to foreclosure, not necessarily bankruptcy. A "redemption period" is a legal time period in which the owner has to "redeem" their property after a sheriff sale either by obtaining funds to pay off their total debt, sell the property to pay off the entire debt, or negotiate a short sale to satisfy the debt. In Michigan, there are two options when it comes to redemption periods. If the property/home is on 3 or more acres, the redemption period is 1 year from the date of the sheriff sale. If the property/home is on less than 3 acres (2.99 or less) , the redemption period is 6 months from the date of the sheriff sale. Agents can find these dates on public records for you.
2. If there is a "bankruptcy" in addition to a "redemption period", you've got double the headache! Not only will you have to deal with the bank or asset management company to negotiate a sale as it relates to the foreclosure, you will have to work with bankruptcy attorneys and/or receivers or trustees of the bankruptcy. Anything to do with the subject property has to be approved ifirst by the lender and then in the courts. Good luck if that's the case - you will need it!
3. It varies bank to bank as to whether or not they will accept an offer during the last days of the redemption period. In my experience, I've had banks that wouldn't work with me if the deal couldn't fund on or before the redemption period ended and I've had banks who have taken offers in the last days of the redemption period, especially if the buyer is a solid buyer. Trust me, banks don't want any more houses!
4. In most cases, buyers agents won't have any information other than what can be obtained by public records. If the selling agent doesn't give the details, how is the buyer's agent supposed to know otherwise?
5. When dealing with foreclosures, short sales, homes which are included in a bankruptcy, etc., it becomes VERY important that you are working with an agent who has experience in these areas. There are a lot of agents out there that have zero experience in these areas. I wrote an offer a couple of weeks ago on a listing in which the listing agent had typed "subject to short sale" in the comments. When negotiating the offer, the agent said she had actually never worked on a short sale, but that she had heard of them before! Can you believe that? It's a reality!
6. Ethics are the professional standards by which Realtors work. Agents have an obligation to protect, educate, negotiate, etc. If your agent didn't have the information, I don't see how this would really be an "Ethics" issue. As Realtors, we are wading our way through all of this too!
Best of luck!
Angie
0 votes Thank Flag Link Thu Apr 3, 2008
Bonita - I have to agree with the other answers given...I need more information before I can say much. Did you have a Buyers Agent? Did you buy the house? Did you use the listing agent? Let me know and I would be happy to answer further!
Web Reference: http://www.sonyaloose.com
0 votes Thank Flag Link Thu Mar 27, 2008
Bonita, There is not enough information to offer advice in your situation with this home.

As others have answered, Michigan requires agents to work for the benefit of the home seller unless under a Buyers Agency agreement. The listing agent for the home might have known the home was nearing the end of it's redemption period. They were not obligated to inform your agent.

I suggest sitting down with your agent and getting this straightened out to your satisfaction. It may be that they did not fully explain the entire situation or that there was a mis-communication.
Web Reference: http://www.mi-living.com
0 votes Thank Flag Link Thu Mar 27, 2008
Bonita, when and how did you find out about the redemption period? Was it recorded on the public records when you made an offer. Your agent might not have known. Our public record data we have access to does not show up immediately. Did you buy the home?
Web Reference: http://mioaklandcounty.com
0 votes Thank Flag Link Thu Mar 27, 2008
Maureen Fran…, Real Estate Pro in Birmingham, MI
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