My husband and I want to buy an REO in Arden Park (Sacramento, CA) that hasn't gone on the market yet.

Asked by Sacto Buyer, 95864 Thu May 13, 2010

We called the contact person posted on the door, and met with him (the agent) and his broker. We are interested in using the listing broker, but want to make sure that there wouldn't be a conflict of interest. The home should go on the market any day, and they are just waiting for the go ahead from the bank and the asking price. The listing broker has said that it would be advantageous for us to use him as our agent because of his relationship with the asset manager. We would be an all cash offer.

If we are the first to submit an offer, and it fits the asset manager's criteria, we are told that it is verbally accepted and it goes for higher approval. During this time, the broker cannot pass on to the bank any additional offers that come in. We are really interested in this house and if it's priced as the broker has suggested, it seems to be a real bargain.

Is this chain of events consistent with your experience? Is there a conflict of interest? First REO for us..thanks.

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6
Anna Boyd, Agent, El Dorado Hills, CA
Thu May 13, 2010
I have to admit the situation you present irks me a bit. The listing agent's obligation is to the seller (lender) and to get highest and best for them.

Having him tell you, you have an "in" by using him - just doesn't give me a good feeling and just doesn't appear ethically right.

If he truly will give you the advantage by using him for the offer - what happened to his fiduciary duty to the seller to get highest/best? Just a question.
Web Reference:  http://www.annaboyd.com
2 votes
Anna Boyd, Agent, El Dorado Hills, CA
Fri May 14, 2010
Few more thoughts on this. Arden Park is a popular area and if priced very well could normally get muliple offers.

I'll answer a general REO question, though. As Jim mentioned, on well priced, well located properties there should be multiple offers. What usually happens is after "x" days and all offers are submitted to lender, the lender usually will come back to all who offered and ask as their counter - "give us your highest/best". So all have a chance to up their offer, pull their offer, keep their offer the same. Then lender makes decision from that last round.

That is what I consider normal and reason why situation you mentioned sounded a bit shady (to me).

Jim is also right - that if you truly are able to purchase this property with no other buyer interfering - then, at least from your perspective - why not? It is the Wild West/ dog eat dog out there right now.
Web Reference:  http://www.annaboyd.com
1 vote
Kamal Randha…, Agent, El Sobrante, CA
Fri May 14, 2010
Hello Sacto Buyer,

The fact that he told you that you should work with him because he has access to the Asset Manager is kind of unethical right there. Does that mean he will not be presenting any othe offers? Also, remember, the listing agent is working for the seller, not you. If there is anything wrong with the home, you are less likely to know about it as the listing agent most likely wont perform full inspections as someone who's representing you may. You should work with your own Realtor because as a buyer, you dont' pay any fees. Good luck.

Kamal Randhawa
Broker
510-932-1066
0 votes
Jim Walker, Agent, Carmichael, CA
Thu May 13, 2010
That is not typical. More common is the asset manager will want to make sure the home is exposed to the open market for a few days in just in case they made a pricing error far below value. If that is the case, multiple bids will come in and bring the sale price closer to market value.

If the asset manager is relaxed in her fiduciary duty the bank she is working for, then the scenario you describe could take place. If the listing agent is performing all the actions required of him by the asset manager who hired him, then it is possible that he is not breaching ethics by getting you this "insider" deal.

It does sound a little bit suspicious. I maybe, might, suspect the asset manager of being lazy, corrupt or disloyal to the bank. Only a suspicion. NOT an accusation! But that does not mean there is anything wrong with you taking advantage of a lazy or unscrupulous asset manager.

In 2010, multiple offers on correctly priced bank properties are normal. the situation you described would be abnormal, but not exceedingly rare.
0 votes
Teri Andrews…, Agent, Auburn, CA
Thu May 13, 2010
In Ca an agent can represent both buyer and seller, the question is do you feel comfortable with that? Do you feel that the agent will represent you well. Some banks do not want their REO agents also representing a buyer, they want the distance, so that might be a question for the agent. Many banks continue to look at offers until the final approval, but each is different. If you are not comfortable with the arrangement ask him what other options he would be open to, maybe a referral fee from a buyers agent (after all he did show you the home).
Good luck!
0 votes
Tamara Dorirs, Agent, Carmichael, CA
Thu May 13, 2010
Hi there,

I know the Arden Park Area really well and it's a lucky thing to find a house you like there, so move fast.
I can't give you any advice on the agent. As a real estate professor, I teach our Sacramento soon-to-be agents that ethics are a first priority...and I know that many Sacramento agents are indeed ethical and honest.

By law, if an agent represents both buyer and seller, the agent has a "fiduciary" responsibility to be honest and fair with both parties. The potential problems occur when the agent feels more obligated or committed to the seller. Hopefully this is not the case.

Hope that helps and best of luck with your new home!

Tamara Dorris
Sacramento Realtor, Professional, and author
Web Reference:  http://www.buyinsacto.com
0 votes
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