Did Listing Agent break the law?

Asked by Lwirmo, Los Angeles, CA Sat Jul 21, 2012

I live in southern California. Recently I submitted an offer to the listing agent(LA) on a short sale property. A few days later LA told me there were multiple offers on the table and they were 100K higher than my offer. So I decided not to pursuit the property. A month later, the property was sold, and guess what, the settling price was EXACTLY what I offered. The settling date also shows it was 15 days later than my submission date. What is worse, according to the public information, the buyer is the LA's sister! I asked for the "seller acknowledgement" receipt but the LA just ignores my request.

What are my option here? Did the LA break any law? Is it a fraud? Appreciate your advises. Currently the property is back on sale again, and under the same LA (of course).


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Ron Escobar -…, Agent, Beverly Hills, CA
Sat Jul 21, 2012
I do a lot of short sales and one of the main conditions from the seller is that the sale be an arm's length transaction... Your scenario does not appear to show that to be the case... However, how do you know the buyer is the agent's sister?

1 vote
Ron Thomas, Agent, Fresno, CA
Sat Jul 21, 2012
If the LISTING AGENT had an ADVISORY that the Buyer was related, then he did nothing illegal.

If you had used a Realtor when you made the Offer, and a CMA told you what the property was worth, then you might now own the house.

Don't blame someone else.
1 vote
Dorene Slavi…, Agent, Torrance, CA
Fri Jul 27, 2012
Dear Lwirmo,

LA probably did not break the law,however, there are many things we don't and can't know at this point.
When we have a Short Sale or REO property many things come into play where offers are concerned. She may have had offers way out of the ball park, but when the offers were examined, they were not good ones. It's not unusual to get stacks of offers on a single property in this market. We had a property once that had over 50 offers!

I hope you are working with a professional Buyers Agent on this. You agent would have informed you to leave your offer on the table with a small good faith deposit while looking at other things. It's possible that the sister was always interested and when you pulled out, her offer was the best one standing.

Since you now say the property is somehow "back on the market" we can only assume the sister was not a qualified buyer either.

My suggestion is to retain an excellent "Buyer Agent" and start again on other property. If you can avoid shor-sales...so much the better. Standard sale homes are well priced right now, and interest rates are at an all time low.
0 votes
Michael Magaw, Agent, Torrance, CA
Mon Jul 23, 2012
The settling date is the close of escrow. That is very fast if they closed the escrow 15 days after accepting offers. Maybe it was an all cash offer with a short escrow. If so, maybe it was superior to your offer.
If the buyer and you offered the same amount, then why do you deserve the home more than the other buyer?
I don't know how you have confirmed the LA and buyer are related, so I have no comment. But if true, some banks do not approve of "non-arms length" short sales.
What is the fraud you are claiming? What is you evidence?
0 votes
Cindy Davis, Agent, San Diego, CA
Mon Jul 23, 2012
It's not against the law, but it is unethical and does not bode well for the listing agent. I've seen these types of things before with multiple offers where you never really know what to trust.

Also, there may have been a higher offer, but you don't know whether it ailed to appraise, or what the circumstances of the deal are....

If you are still interested in the property, I urge you to get your own Realtor.
0 votes
Lisa Bolanos…, Agent, Blue Jay, CA
Mon Jul 23, 2012
I have experienced this myself. I don't believe it is ethical for an agent to do this. I am not aware of any law but someone recommended contacting the agent's local Board. This is one of the main reasons why I do not like dual agency. I had one where it was corporate owned, we put in an offer over asking price, the agent acknowledged he received the offer, then would not get back with me. It turned out he sold the property himself for less than what our offer was. I was very annoyed. I believe it is very unprofessional but there are a lot of greedy people out there.
0 votes
Diane Wheatl…, Agent, Upland, CA
Sat Jul 21, 2012
Find out what board of Realtors the agent belongs to and inform them of the situation. They will advise you of what your options are and hopefully sanction the agent for unethical acts. Good luck !!

Diane Wheatley, Broker
0 votes
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