I have a seller who wants me to list their home. If it doesn't sell...

Asked by The Hagley Group, Pleasanton, CA Sat Oct 20, 2007

the seller wants me to by it at a discounted rate. I know that some agents use this to get listings. It seems unethical to me. Any thoughts? (It's a newer home in a great area......I would be interested in buying the home without taking the listing.......the seller found me....I did not solicit.)

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8
Jim Walker, Agent, Carmichael, CA
Wed Oct 31, 2007
If you are offering the seller an honest guarantee, I don't see how it could be unethical.
You have disclosed to him that you are a professional. Perhaps your competition has offered the guaranteee but the seller likes your marketing plan better. If you can beat or match the competition on the guarantee and you have a superior marketing plan , then you win the lisitng.
1 vote
Bruce McKinn…, Agent, Mukilteo, WA
Fri Jul 25, 2008
Hello Cindi: Some thoughts.

It could be that the seller has already conversed with an agent who made the offer of listing the property and purchasing it if it did not sell, and then at a discounted price. Maybe THAT is where they got the idea.

Yes, as others have said, this type of arrangement is not uncommon in our business, nor is the concept either unethical or illegal per se. There can be arrangements or people that when viewed later do or did end up with those labels. But, as Patti suggested, the TERMS of the arrangement are the key —why a list purchase arrangement is even done besides trying to get the listing.

So, if the sellers home to you is a good value at the listing price you have suggested and you would like to buy the home anyway, then you may have the perfect arrangement in this market. As Brett points out, the key to the arrangement would be in your agreement to LIST-Purchase. Example: If it does not sell in 90 days, you agree to purchase at 85% of your recommended list price. Are you capable of doing that? The deal works or does not work base on the document that describes the conditions. As Brett suggests, you need advice from your Broker and probably a real estate attorney.
0 votes
Salt Lake Ag…, , Salt Lake City, UT
Wed Oct 31, 2007
It is perfectly legal (I know states have different rules). It is perfectly ethicaly. I would not have someone else represnt me. Lay out the terms up front. You would have to expire the listing agreement in order to act as a principal. So make sure the agreed price is adjusted down to compensate for the commission. I would have to assume you cannot be a dual or limited agent as a principal.

On your principal disclosure use the words in large print all cap and bold
SELLER BEWARE
BUYER IS A LICESENED REAL ESTATAE AGENT
SELLER IS ADVISED THAT THE PROPERTY MAY BE WORTH MORE THAN THIS SALE

Even a CA activist judge would have a hard time ruling against that.

If they don't need all their cash, offer seller finance or a seller second.
0 votes
Ruthless, , 60558
Tue Oct 23, 2007
Cindy:
Here is a post describing the program.
http://www.trulia.com/voices/Home_Selling/How_long_should_We…
James is in Atlanta.
Ruth
0 votes
Ruthless, , 60558
Sun Oct 21, 2007
I think part of the request is a challenge. Are you good? Are you going to price it right? Can I trust you? What you need to do is to get to the heart of the request. Did someone else offer this too them and they think it is a good idea and they want you to "price match"? Explain to the seller why you think this this is unethical. Ask the seller if they would put it on the market at the discounted rate? Be sincere and stick with your ethics. Be a sales person not a con artist.

Your job as a professional Realtor is to educate the seller. They may think this is normal. If the first person they spoke with was a flat rate broker and the seller thought all agents charged $499 plus a 2% co-broke, would you cave in or explain why you are worth more? Wouldn't you educated them as to the disadvantage of being penny wise and pound foolish?

You know what to do, now just go do it!
Ruth
0 votes
Brett Dunne -…, Agent, Upland, CA
Sun Oct 21, 2007
Hi Cindi:

Great Question. Patti is correct that there is a lot of fine print in the contact when the agent warrants buying if it does not sell.

First I would ask your broker if you could do this "Creative Marketing". Second, I would have a Real Estate Lawyer help you with the contract. Third, have the cash / lender ready to go BEFORE you approach your possible client.

Cindi, this is like starting an I.V. on a 4 year old...preparation is the key! If you have not planed for this type of deal I suggest being on guard, even if you thought about buying it. (Possible suit issues after purchase)

Love reading your answers on Trulia....
Web Reference:  http://www.DayBreakGroup.com
0 votes
Richard M. J…, , Sherman Oaks, CA
Sun Oct 21, 2007
Hi Cindy, if you can get a deal, why not? But ask another agent to represent you.
0 votes
Patti Philli…, , Carlsbad, CA
Sat Oct 20, 2007
Cindi, There are agents who make the promise to buy a home, however there are a lot of other
"stipulations" that are in the fine print. For instance, they do buy it-- at a discounted rate, still receiving their commissions, further discounting the property- and usually they have to buy their next house from you- and it must be one that THEY have listed (chances being VERY slim that you would have their "dream home" listed.

However, if it is a home you would like to buy- why not just go ahead and buy it- without doing the time consuming "dance" of listing and marketing it first? Why waste the time? Take your discount, and if you think it is a good investment at that discount- enjoy the new property!

Patti Phillips
800-680-9133
0 votes
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