can we ask for proof of another offer on a house, if we dont trust there is one?

Asked by Npjen14sch07, 56071 Sat Feb 5, 2011

we had a weird situation come up, and found out our realtor lied to us, and we dont feel we can trust anything they say anymore. what would you do in that situation? should we confront them? or just go to someone else???

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Christopher…, Agent, Bloomington, MN
Wed Apr 27, 2011
what did the realtor lie about? If that is the case dump the realtor and go somewhere else. That is just bad practice on their part and you deserve better.

It is pretty easy to get a multiple offer disclosure that is signed by both parties acknowleding the other without giving specifics of the contract. If I was representing you and had some concerns the listing agent is bluffing I would ask for this. If they don't play ball then I assume it is the seller and not another buyer countering me.

Regardless, it is my job to understand the market and make sure you don't overpay for this house. You must understand that in a multiple offer situation the buyer loses leverage drastically and it is really difficult to get the best terms.

My advice: regardless of whether there is another offer or not you need to always submit what you are comfortable with. You don't need to overpay for a home in this market and this is where a good realtor can help you.

If they are not giving you sound advice that you can trust it is time to change gears and move on.


hope that helps!

Chris
651-307-7663
chris.block@dhbuyers.com
1 vote
Sergio Herna…, , Naples, FL
Wed Apr 27, 2011
I would discuss the situation with your present Realtor and immediately start working with someone else.
Web Reference:  http://www.golftobeach.com
0 votes
Terri Vellios, Agent, Campbell, CA
Wed Apr 27, 2011
Would you want your offer used against you to a competing Buyer? Some buyers may submit a "non-disclosure" form at the time of their offer prohibiting that offer from being shown to competing offers.

You received good advice. Simply stated; offer what you feel is fair whether or not you are competing. And work with an agent you trust. Some people just don't trust anyone because of past experiences. I hope that you can rise above the past and work through this either with your current agent, or if not, discuss it with them and if the parties agree, find an agent you trust.

All the best to you.
Web Reference:  http://www.terrivellios.com
0 votes
Cameron Piper, Agent, Forest Lake, MN
Sun Feb 6, 2011
There are few questions here:

Ask for proof? Sure, anyone can ask for "proof" but what will be produced, if anything, will mean different things to different people. In representing a seller there is no item that I would be willing to advise my sellers to produce that could prove that another offer existed.

Showing the competing offer would greatly reduce the seller's position of power in negotiations. Your lack of knowledge of the terms and price of the competing offer is what drives competition in multiple offer situations and therefore greatly benefits the seller. Cluing you in to the substance of the other offer would mean that you could tailor your offer to be just a little bit better when you may have been willing to be a lot better.

A signature page, preapproval letter, or the name of the competing buyer's agent, etc. proves very little of the existence of another offer. In writing your question you already doubt the honesty of the agent. It would follow that if you were correct in assessing their integrity that it would also be possible for them to lie about the name of the agent, etc, or produce false or outdated documentation. I'm not much into conspiracy theories though so I generally don't bother with this sort of posturing; it really will only serve to insult the listing agent which will hurt your possibility of acceptance in the end.

I like where Jennifer is going with using the code, but I think it simpler than that. Article 1 of the 2011 Realtor's Code of Ethics states:

When representing a buyer, seller, landlord, tenant, or other client as an agent, REALTORS® pledge themselves to protect and promote the interests of their client. This obligation to the client is primary, but it does not relieve REALTORS® of their obligation to treat all parties honestly...

There it is, plain and simple; realtors can't lie in a real estate transaction. If you really want to go through the exercise of finding out whether another offer exists, file a complaint with the local board of realtors against said lying realtor (I'm serious about this by the way) and ask them to produce proof that they didn't lie. Any agent worth their salt will have copies of both offers and will quickly be able to put both on the table in front of the hearing panel. One of two things will happen, they will be able to produce both or they risk losing an ethics complaint which could carry a fine. Be aware however that this sort of strategy only really works after the fact and if employed during negotiations will likely cause you to win the battle but lose the house.

What would I do? Trust is the basis of all working relationships, and if you don’t trust your realtor you need to find a new one. Complicating the matter however is the fact that if you submitted an offer, a contract for representation likely exists between you and their broker. You could ask to be assigned to another realtor at the same brokerage or you simply ask the realtor to voluntarily end the contract for representation. Notice the key word in the last sentence though – voluntarily. You might even offer them some money for the time they spent and in consideration of their willingness to cancel the contract. The compensation might soften the blow of losing a client and make it easier for them and you to move on.

Now I know what you are thinking (or at least could be thinking). Why would I give a dime of my hard earned money to that lying cheating jerk? By no means do you have to…but then again they don’t have to agree to cancel their contract either. Failing their agreement to cancel or the broker’s reassignment to another agent, one of two scenarios plays out. One: you buy a house with a person you don’t trust and question whether you got hoodwinked for as long as you own the house. Two: you put your plans on hold until the contract expires and you find another agent at that time. The choice is ultimately up to you.

Confront them? ABSOLUTELY. I tend to believe that people are generally good and most real estate agents don’t make a habit of lying to their clients. It is often said that there are three versions of every story. In this case there is your version, their version, and the truth. If you give your agent the chance to explain themselves and tell the whole story, I am betting you will both end up believing in the third version of the story – the truth.

Note: If it does turn out that they are lying and cheating scum, because those agents do exist as well. I want you to call me so that I can help you file an ethics complaint against them so they don’t have the opportunity to do this to another consumer.

Just go to someone else? PROCEED WITH CAUTION!! If you have a representation agreement with your current agent, working with another agent may obligate you to pay the agreed upon compensation to your old agent as well as your new agent.


Cameron Piper
CB Burnet
Web Reference:  http://www.campiper.com
0 votes
Jennifer Kir…, Agent, Minneapolis, MN
Sun Feb 6, 2011
Hi,

If the seller agrees to let buyers know about multiple offers, then per the Code of Ethics, a listing agent must disclose that information. You can ask for proof, but it is not required per the code. Confidentiality exists for the other buyer as well, so it doesn't happen very often that the actually offer is showed to an outside party. Below is the Standard of Practice relating to this issue:

Standard of Practice 1-15

REALTORS®, in response to inquiries from buyers or cooperating brokers shall, with the sellers’ approval, disclose the existence of offers on the property. Where disclosure is authorized, REALTORS® shall also disclose, if asked, whether offers were obtained by the listing licensee, another licensee in the listing firm, or by a cooperating broker

As in any situation, it is best to sit down with your agent and speak to them about your concerns, and get everything out that is bothering you. Only then can you come up with a solution that works best for you. Good Luck!
0 votes
Aaron Dickin…, Agent, Champlin, MN
Sun Feb 6, 2011
I forgot to add that if it is a bank foreclosure you are trying to buy, typically the only strategy that will work is to present highest and best offer the first time - even if there are not multiple offers now there could be before the bank signs the paperwork and most banks do not mess around with creative negotiations.

Since each transaction can be very different, your best advice is likely to come from your agent and their broker/manager since they are privy to far more information that you have presented here.
Web Reference:  http://www.whybuyreo.com
0 votes
Jeanne Feeni…, Agent, Basking Ridge, NJ
Sun Feb 6, 2011
Hi there, I have used a version of what Mack describes with success - attaching an escalation clause addendum that define the terms of an escalation assuming a competing bona fide (in writing) offer that beats yours. In order for it to kick in, the competing offer must be verified - a buyer/agent may be hesitant but if so it can be shared with your attorney. I've even had a situation where I sat at a conference table, had the seller's agent share it with me so that I could verifiy on behalf of my client. I think I'd be even more comfortable if that step was handled by the attorney. Particularly given your concerns.

Good luck to you,
Jeanne Feenick
Unwavering Commitment to Service
Web Reference:  http://www.feenick.com
0 votes
Susan Hoffla…, Agent, Shoreview, MN
Sun Feb 6, 2011
@ Peter, we've tried this every which way, but seeing the signature page doesn't really verify that the proposed PA is valid since the seller hasn't signed it yet. I agree with Aaron, it's dicey because of confidentiality rules. As a listing agent, I've asked the buyer's agent what information I can share to allow the other agents to verify we are, in fact, in a multiple offer situation. Many are comfortable with sharing certain pieces. Depends.

When representing buyers, I have to advise my buyers that, while there are agents who may be deceptive, I've been in too many situations where there have been multiple offers and we've lost. So, while it's a gamble with relatively low risk that it's not true, it's better to err on the side of caution, with the idea that there are really other offers.

I like Macks' suggestion, too. I've done that on occasion.
Web Reference:  http://www.homestosellmn.com
0 votes
Peter Evans, Agent, Minneapolis, MN
Sat Feb 5, 2011
Yes, you can see the signature page of the Purchase agreement. As it shows no price terms or conditions of the agreement. If the agent is a dual ( buyer/seller agent)l agent ask to see the page in the medium it was delivered. EX: fax (date time stamped) Email in box or if saved, see the modified date of document.. If not a Dual agent ,request your agent to obtain said page. If you don't get it, call the other agents manager directly. Move up the ladder till you get what you need to satisfy you, short of breaking any legal or ethical absolutes.
0 votes
Dp2, , Virginia
Sat Feb 5, 2011
You could structure your offer in multiple phases. The first phase could anchor the seller on some of the terms, and require his/her acceptance before s/he could proceed to the next phase. The second phase could require all of the potential buying parties to submit sealed bids, that couldn't be opened until all parties have submitted bona fide offers. The third phase could involve a neutral third-party who opens and checks each bid to verify that they all comply with the agreed upon rules; the non-compliant ones would automatically be rejected. The fourth phase essentially entails that neutral third-party delivering the compliant offers to the selling party. And the final phase is where the selling party will accept the strongest offer as determined by the agreed upon criteria.

I took adapted this example from one presented in a book, Negotiauctions, that's based on a real transaction.

Keep in mind that all sellers won't agree to those terms.
0 votes
Mack McCoy, Agent, Seattle, WA
Sat Feb 5, 2011
Hmmm. Well, you might ask to include a clause that uses the other offer as a benchmark - for example, your offer will be $500 above any other offer, so long as that other offer is provided to you for verification.
0 votes
Aaron Dickin…, Agent, Champlin, MN
Sat Feb 5, 2011
The seller of a house is unlikely to share with you the other offer as that would be revealing information that can hurt in their negotiations. I have once told a 2nd agent the name of the agent that brought forward the offer, but otherwise I would not advise my seller client to share anything else for information. REALTORS are bound by the code of ethics, which prohibits lying about the existence of another offer, though I am not saying that they have never lied... it happens in every profession.

If you do not trust your agent you should confront them and see if you can build reassurance. If you cannot, then you should speak to their broker.
Web Reference:  http://www.AaronSOLD.com
0 votes
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