What California govt. agency does one complain to about unethical behavior of a Real Estate agent? Can we sue for damages?

Asked by Cheryl Younger, New York, NY Tue Jul 20, 2010

We were the highest bidder on a short sale from day one. Yesterday we learn the unit agent put in some elses bid before ours without offering us the opportunity to beat the bid. We want the space as a retirement home in the same building as our daughter. Can we sue this agent? Can we get an opportunity stop that submission and to put in a higher bid. We want this unit. Thank you.

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Lebau, , Los Angeles County, CA
Fri Feb 4, 2011
unethical? california real estate salespeople? naaah that doesnt exist...
1 vote
Sue Wylie, , Los Angeles County, CA
Thu Aug 19, 2010
The Real Estate Profession is like any other profession, not everyone is honest and decent. You get bad doctors, bad lawyers, bad cops too. Short sales are the one kind of real estate transaction that agents have very little control over. The banks only want ONE offer presented. The agent representing the bank will usually put in the first qualified offer to come in. Being the highest offer is not necessarily the criteria. It is often who is the first offer on the table. You do not say if you were represented by an agent or if you dealt directly with the listing agent. You might try contacting the listing agent directly to see the status of the other offer, and then ask if you can re-submit an offer directly and you would be willing to make it higher. Remember too that the banks make money by pushing the short sale process out as long as possible - they get paid $1,000 a month during processing. there's good chance this property will not go short sale, but may go to foreclosure, in which case you can go to the bank directly or go to the auction to buy it. Reporting the agent to the DRE for unethical conduct will take months, the agent may not have been acting unethically after all, and it will not help you get what you want. It would be far better to play it out with the best diplomacy and negotiating skills u can muster.
1 vote
Pacita Dimac…, Agent, Oakland, CA
Tue Jul 20, 2010
How sure are you that the agent acted in an unethical manner?

If the seller decided not to issue any counter offers, that's the seller's decision, and the agent is required to execute/implement the decision accordingly.

That's why when writing an offer, buyers are advised to give it their best, because they may not get a second chance. Buyer's shouldn't count on getting a counter offer --- it's never a sure thing.

Highest offer doesn't always get it. Terms and conditions play a big part in selecting the offer that appeals the best to the seller.

During the peak of the market, when over-bidding seemed to be the norm, buyers and their agents looked for ways to distinguish themselves. Some buyers wrote letters appealing to the seller's emotion. Some wrote offers without contingencies (not advisable). Some buyers offered to pay for closing costs normally paid by the Seller.

But one thing remains constant: then and now, as listing agents, we always advise buyers and their agents to submit your best and highest offer from the get-go.
1 vote
Jane Peters, Agent, Los Angeles, CA
Tue Jul 20, 2010
Unfortunately, you would have to have evidence that something unethical happened. You say you were the highest bidder, but how do you know that? You say that the agent put in someone else's offer before yours. How do you know that? An agent is supposed to present all offers and just because you have a higher offer does not necessarily mean you have a better offer. The California Department of Real Estate has jurisdiction over realtors, but unless you have hard proof you will just spend time and money with no success. Also, since this is a short sale there is no guarantee that the offer will be approved by the lender or even close. So you could hang in there and watch the process.
1 vote
Cory La Scala, Agent, San Diego, CA
Wed Jan 26, 2011
Not all agents will take the time to help someone out. This one sure didn't. Unfortunately, you didn't really suffer damages or lose any money, so I doubt you'll have a case to sue. Did your agent stress to the listing agent that you really want the property, and to notify her/him if a higher offer came in? A listing agent doesn't have to give you an opportunity to submit a higher offer, but it would have been the professional thing to do, given they told you your offer was in first position.

And, don't give up. This buyer may not hang around long enough to wait for bank approval, many buyers walk. Have your agent stay in constant contact with the agent, getting updates on the short sale progress, and stressing that you want your offer to stay in. Put it in writing by extending the short sale response date. Often, this date passes before the bank sends written approval. Also, try upping the offer price, in writing, to the top of the value range in that complex along with the date change. Include your comps. Sometimes agents will submit an offer with inflated offer price knowing it won't appraise and the seller will likely reduce the price.

Good luck!
0 votes
Garrigus Real…, Agent, Redlands, CA
Wed Jan 26, 2011
Contact the New York Department of Real Estate. Keep in mind that a winning offer, or bid, can be referred to as
Web Reference:  http://8889LISTIT.com
0 votes
Angie, , Walnut Creek, CA
Tue Jan 25, 2011
New York real estate law may or may not require the listing agent to give a "multiple offer" notice to all buyers on short sales, it's usually just for REOs. I'm assuming the listing agent told you or your agent your offer was the highest priced. If the comparables sales within this building are lower than your offer then there's the risk to the seller that your appraisal may not come in at offer price.

If your offer had been accepted then your appraisal came in lower, would you be in the position of paying the difference in cash? If not, then you just saved yourself months of anxiety and headaches! Ask your agent to write up a formal back-up offer for the seller to sign. This may give you the opportunity to slide into firsts place if the current buyer walks away, before the property goes back on MLS as an Active listing.

OBTW, why waste your time and money on a law suit when you could use it for a higher down payment or home improvements! Stay focussed on your goal to find a unit in this building:)
0 votes
Cory La Scala, Agent, San Diego, CA
Fri Nov 19, 2010
You said you were the highest bidder from day one, so I'm wondering why you felt the need to submit a higher offer to "beat the bid?" If you weren't the highest offer from the start, the agent didn't have to go back to every buyer who submitted an offer and ask for higher bids. Everyone who submitted an offer wanted the property.

Next time you REALLY want a property, submit an uber serious offer. Offer the highest price that you can, being sure the property will appraise at that price. Be sure, and this is important, to send comps in WITH your offer showing recent sold prices, substantiating your offer price. Some unethical agents will submit offers with inflated prices knowing an appraisal will come in lower, hoping the seller won't want to start over with another offer, and go with the lower price. You be the one to send those comps with your offer, and you can even include in your cover letter why you did. Also, send in your funds verification. This way the seller/bank will know you have the funds readily available to close. State your FICO scores in your cover letter if their high. Yes, it's above and beyond, but we have some pretty competitive areas here too, and YOU have to be the buyer that there will be no questions about. I do this will ALL of my buyers; it's extra work, sure, but why take chances in this crazy market?

Good luck to you!
0 votes
Heather Paul, Agent, Santa Monica, CA
Fri Oct 22, 2010
If you had a problem with your purchase or sale, I would first speak with the broker of your agent. If it is not resolves, Contact the California Department of Real Estate
0 votes
Dorene Slavi…, Agent, Torrance, CA
Mon Oct 18, 2010
Hi Cheryl..
Our government agency is the Department of Real Estate at http://www.dre.ca.gov .I don't know how New York is, but you can sue if your coffee is too hot in the state of California.
0 votes
Rudi Hofmann, Mortgage Broker Or Lender, El Segundo, CA
Fri Aug 20, 2010
http://www.dre.ca.gov .... Happy funding, Rudi
Web Reference:  http://www.umboc.com
0 votes
Pacita Dimac…, Agent, Oakland, CA
Wed Jul 21, 2010
By the way, Cheryl....

Have you asked if you can be in back-up position?

It isn't unusual for short sale buyers to walk away when they get tired of waiting. That's why most short sale agents will continue to want to show the property and present it as "subject to lender approval", as well as encourage back up buyers.

Since you really want the unit....all the more you should pursue this avenue.

Good luck!
0 votes
Jeffrey White, Agent, Beverly HIlls, CA
Wed Jul 21, 2010
You are never guaranteed a counter offer from the seller in a multiple offer situation, especially with short sales.

In your question it isn't clear if this is your agent or not. You need to clarify if this iagent is representing you or the seller or both.

I agree with other comments here that often a slightly lower offer is taken because it is all cash as opposed to dealing with a loan and appraisals, etc.

There are really many holes in this scenario that need to be filled in before sound advice can given.
0 votes
Deborah Brem…, Agent, Los Angeles, CA
Tue Jul 20, 2010
The California Department of Real Estate has jurisdiction over the actions of real estate agents. If the agent is a Realtor, you can additionally contact the local Board of Realtors to get answers to your questions.
I am both an Accredited Buyer's Repreentative and a Certified Distressed Property Expert, so I encounter this situation frequently.
First of all, Chris' answer that the buyer chooses the offer is incorrect. The seller elects to either accept, reject or counter each offer they receive. In a short sale, unlike a retail (regular) sale, any decision made on the part of the seller is not binding until and unless the offer is approved by the bank. So being first may be irrelevant, especially if another, better offer was received.
Your frustration is apparent, but in fact there may have been any wrong doing on the part of anyone in this transaction. Your option at this point is to wait and see what happens with the accepted offer; often escrows fall apart due to the physical inspection contingency or for lack of financing. In the meantime, ask for answers so that you can, in future, avoid a similar disappointment. If you wish, I have a set of questions to ask of the listing agent to help ascertain whether a short sale will be successful.
Deborah Bremner
REALTOR, 00588885
(D) 818.564.6591
Blogging at: http://TheBremnerGroup.com/news
0 votes
Sue Wylie, , Los Angeles County, CA
Tue Jul 20, 2010
Hi Cheryl:

I understand your frustration and disappointment.
But lawsuits wont help here. In the case of a short sale, it is the lender who ultimately decides which offer to accept.
And most often the lenders do not give any buyers the opportunity to come back with a better offer.

I sugest you get your agent to do a little door knocking and try to find someone else who may be getting ready to sell. Or, you could do that yourself too.

Good luck
0 votes
Ryan Smith, Agent, Murrieta, CA
Tue Jul 20, 2010
Hi Cheryl,

The buyer is the one who chooses the offer not the agent. Sometimes the best offer is not the highest but the best written. The listing agent and the buyer will select the best offer they believe will give them the best opportunity to close the deal. That offer may have been cash, or maybe asked for less in concessions.

Hope this helps!
0 votes
Richard Schu…, Agent, Los Angeles, CA
Tue Jul 20, 2010
If the listing agent was also representing you, you may have a case for damages. If the listing agent was separate from your buyer's agent, there is no breach of agency, as the listing agent has zero obligation to you. Unfortunately this happens quite often. Sometimes it is simply the other offer is better financially, or has better terms, but all too often the seller or agent steers their own client to the property. If you think something else happened, contact the Department of Real Estate dre.ca.gov.

Richard Schulman
#1 Listing and Selling Agent
Keller Williams Realty Westside
0 votes
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