Foreclosure in Saint Paul>Question Details

Marie, Home Buyer in Minneapolis, MN

Can a bank assigned broker force us to sign him as our agent prior to viewing the REO? We have contacted the

Asked by Marie, Minneapolis, MN Sat May 9, 2009

bank already and have submitted an offer conditional on viewing and inspection. The bank is out of state and hired him after we placed an offer and I know what he makes and what his job requires as the banks agent. This broker appears greedy. What is your opinion? Is this common? We have been in this situation before where the bank agent refused to show a house unless we hire them as well and we didn't sign of course. We need to see the house. We are pre-approved with financing, have inspectors chosen and have watched this property for over a year. I don't like being forced to hire someone I don't know and don't trust just to see a property. We have buyer agents in mind as well as lawyers but we don't want to sign with anyone until we are sure on the property. Any advice would be helpful.

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If this listing is available on MLS- Multiple Listing Service- than as a realtor I can show you the property! There are buyer rights as you know and representation of your choice is your right based on Minnesota Law. Please call me at 651-690-8423 so we can discuss. Fee's are generally paid by the listing company/broker.
I will do further research one I have the property address! Thank You for your time. JD
1 vote Thank Flag Link Tue Jul 28, 2009
For the most part, Lenders force REO Brokers to take smaller than normal commissions, so I wouldn't say that the broker is greedy. They may simply be trying to survive.

I never take an unsigned buyer into a property. Think about it for a minute. Why should I make a committment to a customer who is not willing to make a committment to me? Should I waste my time, effort, wear and tear on my vehicle, gas, postage, printing costs, phone minutes, etc showing homes to someone who doesn't want to hire me? It just doesn't make good business sense. Of couse, I provide an "Easy EXIT" if the client is not satisfied with my work, at any time before we sign a Purchase Agreement, they can cancel their contact without obligation. And I've never had anyone cancel yet!

The questions of insurance and business liability come into play as well. What would happen if you fell down and were hurt in a REO home? Who would you sue? The bank has a whole department full of lawyers. Would you sue the real estate agent who showed you the home?

In the case of an REO, you really should hire a Realtor to represent you as a Buyer's Agent. There are so many things that you can get stuck with and some of them aren't even legal in the state of Minnesota. We are so very different from most other states and Lenders are not keenly aware of our laws. Just the other day I wrote an offer to purchase a REO property and I had to change 7 items on the Seller's Addendum (required) because they were either illegal, against the MLS rules, uncustomary, or simply not in my Buyer's best interest.

The Seller (Lender) said that the Buyer must use the Seller's Title Company... NOT!
The Seller (Lender) said that the Buyer must pay to de-winterize the home for the inspection... NOT!
The Seller (Lender) said that the Buyer must pay to re-key the home after closing... NOT!
The Seller (Lender) said that the Buyer must pay for the Owner's Title Insurance Policy... NOT!
The Seller (Lender) said that the Buyer must pay for all mortgage required repairs... NOT!
The Seller (Lender) said that the Buyer must pay for all levied assessments... NOT!
The Seller (Lender) said that the Buyer must pay for all pending assessments... NOT!

There is a lot more to buying a REO than just making an offer. You really need to be protected and a Realtor isn't going to charge you for their services because they will be paid by the Listing Broker.

You may also be confusing a "Disclosure" with a "Contract". Minnesota Law REQUIRES all real estate agents to explain agency to you and have you sign the "Agency Relationships in Real Estate Transactions" disclosure form "at first substantial contact" with all customers. That is completely different than the "Exclusive Right to Represent Buyert" contract.
1 vote Thank Flag Link Tue May 19, 2009
Marie you made an offer to the lender on a property that was not listed on the MLS yet if I read correctly. The lender may have had this agent working with them on the property since the forclosure was filed as normally they ask the agent to do the "cash for keys" if nessasary. You sent them an offer as an unrepresented buyer and wanted to view the property. They contacted the agent that represents them to show you the property. You are not hiring this agent in fact as you have already made an offer is is to late to bring another agent into the picture and have them get paid out of the transaction. You could have a buyers agent to represent you but you may have to pay them yourself out of packet as they were not involved in your initial offer.

Sorry just have to throw this shot in but why didn't you use a buyers agent in the initial part of the transaction trying to save a little money (greedy)?
Web Reference:
0 votes Thank Flag Link Wed Mar 17, 2010
You don't have to hire anyone to see the house. Call the number on the sign or find an agent to show it to you and don't sign anything unless you are comfortable with the agent.
0 votes Thank Flag Link Wed Mar 17, 2010
You are entitled to the agent of your choice in this matter. Be advised that whoever you hire will be paid for by the bank. If that is the case, why wouldnt you want a second set of eyes on this transaction to look after your interests? Also, your agent may be able to get you a decent deal and offset some of your expenses. I would look into this. As far as the listing agent (or banks agent) wanting you to use him, hear what he has to say and then make a decision that is good for all concerned. There is opportunity here. Stay professionally focused. Seek it out!
0 votes Thank Flag Link Wed Mar 17, 2010
Hello Marie,

This question could mean a couple different things. "I don't like the listing agent" or "I'd like to have an agent of my own" or " I've done all the work and it really bugs me a real estate agent is going to get payed."

It sounds a little bit like you don't want a Realtor to be involved at all. Maybe so you can get the house at a lower price? If the bank has listed the property with the broker, the broker is going to get payed when the property sells regardless of whether he represents you or not. I would be very suprised if you can do an end run around that situation.
From the broker perspective wanting to get payed when a listing sells is not greedy, it is the way it works. Often the realtor has a lot of time and money into a foreclosure before it ever hits the market.
If you don't like the listing agent you can certainly work with another agent to represent your interests.
If the agent has a relationship with this bank and knows how they work he/she might be able to get an offer completed that you would have no chance of pushing through.

Best of luck to you in getting the house you want.
0 votes Thank Flag Link Sat May 9, 2009
There is a very simple work around. Actually two work a rounds. One is to have an agent of your own to show you these properties, the other is to have the listing agent show you the property but if you don't want agent representation don't sign the buyers representation contract. You absolutely can refuse duel agency the law is on your side. You don't have to have an agent either. You absolutely can write your own offer.
0 votes Thank Flag Link Sat May 9, 2009
And, what I mean is, hire your own agent, not the agent representing the seller. See what I mean?
0 votes Thank Flag Link Sat May 9, 2009
Marie, just curious, why don't you want to hire an agent? That agent will get paid from the proceeds of the transaction, most likely. The bank/seller agrees to this when they sign the listing agreement and, most likely that amount doesn't change, regardless of whether the buyer's have their own agent or not. Meaning, if you don't need to come out of pocket for the buyer agent fee, why wouldn't you have a professional representing you in a precarious transaction like a foreclosure?
0 votes Thank Flag Link Sat May 9, 2009
Clearly this agent has their interests as their first priority. An agent does not have to do anything for a customer that is not a represented client, but they should be showing you the house if they are truly representing their seller.


I think you've put the cart before the horse in that it sounds like you've had no representation in preparing the offer... one of the most crucial steps in a transaction.

I would suggest going back to your buyer agents and picking one to work with and have them get you through this. Their compensation from the listing broker may already be at risk though so make sure to tell them everything you did.
0 votes Thank Flag Link Sat May 9, 2009
Also, you can tell the broker you would like to represent yourself with a NO brokerage relationship. It would not make him greedy because as long as you are not working with an agent he will not have to split the commission with anyone. Also, you could always contact another agent in the state just to ask them about the situation, since they will be more knowledgeable on local rules and regulations, but be aware that they are going to want your business also!

Anthony Candelario
0 votes Thank Flag Link Sat May 9, 2009
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