I'm a real estate investor and don't pretend to know everything about real estate laws and ethical behaviour concerning real estate agents

Asked by Boarderbum54, Weston, FL Mon Feb 1, 2010

however I was under the impresson that an agent or realtor has the fiduciary obligation to submit every offer no matter how low it may be.Case in point. I recently submitted a signed purchase agreement to buy a home in south Florida. The agent told me that there were several offers on the table and even disclosed to me what they were. I put in my offer (which was $500 more than the accepted offer) and indicated it was a cash offer backed with proof of funds and a check for earnest money. I guess I might have made a mistake and asked about the current atmosphere of mortgages and lending availablity. I found out that the listing agent had listed it for $6000 less than my buyers agent web offering. needless to say the homes is now under contract for $600 less than my offer.My question is 1. does the agent have to submit every offer? 2. Can he advertise a property that isn't his listing at a higher asking price? Should I have not mentioned the possibility of financing the deal?

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19
Angela Schra…, Agent, Pembroke Pines, FL
Mon Feb 1, 2010
Dear Boarderbum:

Florida Statute 475 describes the laws that govern the practice of the real estate profession in the state. Under 475.278, there is a list of duties that a transaction broker owes to their clients. These duties include "dealing honestly and fairly", "accounting for all funds", and also the duty to " Present all offers and counteroffers in a timely manner, unless a party has previously directed the licensee otherwise in writing".

Under any reasonable interpretation of that law, your agent would be required to present your offer, in a timely manner, unless he/she had been told (in writing) not to accept any further offers, or any offers that did not meet a certain criteria. For example, the seller could tell their listing agent "I don't want to see any offers for less than $100,000. Don't even waste my time". If the listing agent had that in writing, they would be well within their right to refuse to communicate an offer of $98,000.

I cannot presume the language of the listing agreement between the seller and the listing agent, however, it is common for most listing agreements to contain a clause stating that the listing agent is not responsible for marketing or presenting offers AFTER a contract has been agreed and executed. In other words, the agent doesn't have to continue to take offers to see if something better comes along.

There is also the distinct possibility that the information that you relied upon was outdated. One of the limitations and problems with the proliferation of all of these online real estate sites is that information gets harvested from the Multiple Listing Service at a particular point in time, and is never updated. It is not at all uncommon or inappropriate for Realtors other than the listing Realtor to market properties that they have no connection to, and I am not convinced that they can be responsible for updating information associated with them every time there's a change in the original listing. Certainly, it would be a good thing if they did!

When you approached your own Realtor, his/her duty and responsibility to you was to identify the current and precise terms of the listing - its availability, its price etc., rather than relying on what you saw on the Internet. If the price of the property had been reduced, or if the property was already under contract, these circumstances certainly would have affected your ability to make an offer. That's what your Realtor is supposed to investigate for you.

If you're not using a Realtor, this is one of the risks of relying on Internet real estate listings - they are now always up to date or accurate. A Realtor can review the MLS and provide you with the information and assistance you need.

I hope this helped!

Good luck to you!

Best wishes,

Angela
Villa G Realty, Inc.
Tel: 954-816-7996
Web Reference:  http://www.villagrealty.com
3 votes
Mark LeMenag…, Agent, Lake Nona Orlando, FL
Mon Feb 1, 2010
First of all it is against the law for a Florida real estate licensee to provide legal advice. My Florida colleagues may wish to remember that.

I can adress the issue of what is ethical for a realtor to do.

1) A Realtor is ethically bound to do what his or her client wants them to do, as long as is is legal. Sometimes REO asset managers do not want to see every offer. You have no knowledge of what the seller asked the listing agent to do.

2) It is not ethical to advertise another agent's listing as you own. It must be disclosed that the source is another brokerage. If you can prove this then complain to the Florida Assn of Realtors.

3) Who knows what you should or should not mention in a negotiation. That's just part of the process.

If you feel that a licensee has acted improperly, then you should contact the Florida Real Estate Commission and make a complaint.

Regards, Mark
2 votes
Joan Tole, Agent, Fort Lauderdale, FL
Sun Jul 7, 2013
it will be interesting to see who was the buyers agent and if it was the same agent,as the sellers agent..........This is some frustration that all of us are dealing with. follow the deal and when it closes have YOUR agent look it up.
0 votes
Dallas Texas, Agent, Dallas, TN
Sun Jul 18, 2010
Each property stands alone how the lsiting agent can or can't accept offers based on seller listing agreement.

Difficult to render an opinion unless all the facts are reviewed the paperwork, llisting agreement, what was authored in MLS and etc.

Lynn911 Dallas Realtor & Consultant, Loan Officer, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
972-699-9111
http://www.lynn911.com
0 votes
Kamal Salim, Agent, Davie, FL
Sat Jul 17, 2010
Yes, and agent must submit every written offer,unless the listing agreement says otherwise; like do not submit another offer once an offer has been accepted.
About your question regarding the price difference, it may just be that the listing agent lowered the price on the property, and your agent was not aware of it, and did not adjust the price on his website. It makes no sense in this market to advertise for a higher price, we are actually trying to convince sellers to lower prices.
And, last but not least, the possibility of financing has had nothing to do with all this.
Please call me at 786-290 5445 or e-mail me at info@kamalsalim.com with any other questions or concerns
Web Reference:  http://www.kamalsalim.com
0 votes
Jeff Holloway, Agent, Sebastian, FL
Tue Jul 13, 2010
Regarding your question about submission of offer's...depends on what their agreement is with the seller and the terms of the listing agreement. Answer to your second question is maybe; an agent may advertise another agents listing if that agents has specified that it is ok to advertise it. Once again, depends on the ad verbage. If you were a cash buyer, why would you even discuss financing? Ever here the old saying "Buyers are liars and seller's are worse?"
0 votes
Carolyn Bidd…, Agent, Ocala, FL
Thu Feb 4, 2010
Yes, you probably signed some froms called agency disclosures, which specifically states your agens' duties to you. I would suggest that you contact the Florida Department of Busioness and Professional Regulation(DBPR), and the Florida Real Estate Commission(FREC) to determine exactly what your rights are, and how they may or may not have been violated.
Any agent in our profession, Whether a REALTOR, or not, who does not act ethically, put a shadow on us all, and has no place in the industry.
Web Reference:  http://www.r-world.com
0 votes
Jeff Holloway, Agent, Sebastian, FL
Thu Feb 4, 2010
Depends on what agreement the agent has with the seller. Is the seller a bank or private party? The agent could have had an agreement with the seller to hold all offers once the seller has accepted an offering. Sounds like the seller accepted something prior to your offer submission. Lots of variables. I've seen allot of buyers wanting to work directly with the selling agent because of this. The buyers now figure if they go to the selling agent directly...the agent will make ALL the commission and the buyer may have a better chance of getting their offer through.
0 votes
Murray Balkc…, Agent, Santa Rosa Beach, FL
Mon Feb 1, 2010
If it is state law, then it may vary from state to state, so take these answers (mine included) for what they are, answers which may or may not apply to your specific case. I am licensed soley in the state of Florida and I thought I was seeing only questions from the state of Florida. My mistake and apologies.
0 votes
Mack McCoy, Agent, Seattle, WA
Mon Feb 1, 2010
Here in Washington, it is State Law. I, for one, do not want to tell a judge that "my seller signed this piece of paper saying I didn't have to present all offers to them." Especially when they were getting ready to review a bunch of them.
0 votes
Murray Balkc…, Agent, Santa Rosa Beach, FL
Mon Feb 1, 2010
Agents keep replying that all offers must be submitted. Apparently they have secret spy glasses which make them able to see the listing agreement between the seller and listing broker. Whether or not one has to submit offers after contract is up to the seller and listing broker and would be in the listing agreement, which is NOT public information.
0 votes
Mack McCoy, Agent, Seattle, WA
Mon Feb 1, 2010
1. Yes, the agent has to submit every offer.
2. Unclear. He cannot advertise a property listed with another brokerage without permission, but it's possible that there was a price reduction he wasn't aware of.
3. Since your offer wasn't conditioned on financing, that doesn't really matter.

Hope this helps.
0 votes
Nicole Marks…, Agent, Boca Raton, FL
Mon Feb 1, 2010
Hello, Boarderbum. The simple answer to this is "yes". All written offers must be submitted by the buyer's agent to the seller's agent. I'm not a real estate attorney, but it would seem to me that the buyer's agent should not have the authority to advertise the property at a higher asking price. The fact that you mentioned the possibility of financing the deal should have had nothing to do with it. The bottom line is this, the individual you had working for you did not have your best interests in mind. It's time to switch to a Realtor who does have your best interest in mind. Might I suggest me? I don't play games and I work within the rules and regulations that the Realtor's Association has in place.

Please feel free to call me at 561-445-8743 or Nicole@BuySellBoca.com. Don't let the 561 area code deter you. I'm a native Floridian and have lived here most of my life. I guarantee you that you will be happy with the service I provide.
Web Reference:  http://www.buysellboca.
0 votes
Murray Balkc…, Agent, Santa Rosa Beach, FL
Mon Feb 1, 2010
I want to add one additional comment. Your question doesn't specify whether or not the real estate agent is a Realtor. In addition to the laws of the state and nation, a Realtor also has a standards of practice including ethics, set by the Association of Realtors. Only a small percentage of real estate agents are Realtors.
0 votes
Murray Balkc…, Agent, Santa Rosa Beach, FL
Mon Feb 1, 2010
Submitting offers after contract is executed is dependent upon the listing agreement terms. Also, verbal offers might be handled differently than written, per the terms of that listing agreement.

The agent is not permitted to openly shared privileged information such as prices of offers. Sounds like the agent is trying to milk every dollar out of the buyers, and is basically hosting an auction rather than a traditional sale. Auctions are handled differently and should be noted as auctions.

Hope that answers your first question.

2) Can he advertise a property that isn't his listing?
The likely answer is no, but there is a little gray area such as open listings.

3) If your offer states cash, changing the terms to less desirable terms for the other party would require the other party's approval and signature. Cash often feels like a stronger offer, but as long as money is exchanged at the closing table, a buyer shouldn't really care if it is cash or financed. However, preaprroved loan and proof of funds are good to have. Financing contingency just provides one additional out to the contract, but if a buyer wants out, there are other ways to do that. In short, financing shouldn't matter to the listing agent.
0 votes
Loriann M. H…, Agent, Pembroke Pines, FL
Mon Feb 1, 2010
Lots of good questions here; I agree that you may need to have add'l conversation with agent's broker, but here are a few comments for the peanut gallery: Agents can advertise other auth listings, but you should definately question the discrepency in price; The listing agreement with the seller dictates whether offers need to be presented based on whether they are written, verbal or whether another offer has been accepted already-the timing of our submission of written and fully documented offer is key here; And your intended terms are a standard part of the offer, so if the other accepted offer was firmly a cash deal, and yours was not so firm , the seller may have decided to go with a solid cash deal even with the $600 difference. Hope this helps, and by the way, I cover the Weston area if you have any add'l questions. Good Luck!
0 votes
Don Tepper, Agent, Burke, VA
Mon Feb 1, 2010
I'm not sure I understand all the details. For instance, you say your offer "was $500 more than the accepted offer" but yet "the homes is now under contract for $600 less than my offer" and that "the listing agent had listed it for $6000 less than my buyers agent web offering." I'm not tracking with the numbers.

However, as an investor (I started off as an investor, and still am one), you're correct: An agent or Realtor has the obligation to submit every offer no matter how low it may be. Unless the seller has specifically said that he/she doesn't want to see offers below a certain level. So, let's say a seller's home is listed for $100,000. Even if you make an offer of $50,000, it must be presented to the seller unless the seller has said to his agent something like: "Don't bother showing me any offers below $80,000."

Are you sure your offer wasn't presented? Sometimes, sellers don't accept the highest offer. As an investor, you know that that usually works in your favor. If you present an offer of $90,000, all cash, in as-is condition, and someone else presents an offer of $95,000, FHA financing, not in as-is condition, you stand an excellent chance of getting the property even though the other offer was higher.

You also ask "Can he advertise a property that isn't his listing at a higher asking price?" Two questions there. First, he can advertise a property that isn't his listing if he receives the permission of the seller (usually accomplished by asking the listing agent for permission to advertise the property). I'm sure policies and practices vary from area to area, so I can't address the specifics of Weston, but that's usually the situation. As for whether he can advertise it at a higher price--interesting question. I don't know. I'd suspect that there are all sorts of ethical and regulatory brambles involved in doing so. And, as a practical matter, it'd seem better to advertise at a lower (the correct) price, since that would likely result in more offers.

There's also the possibility that your buyer's agent site listing was being fed electronically from the MLS, and that his site hadn't been updated. You'll see some complaints on Trulia about the same thing--agents or home owners posting questions along the lines of: "My house is listed here incorrectly. The price is listed too high. How do I fix it?" So, maybe, the price had been higher ($500, $600, $6,000), but had been recently reduced and wasn't yet reflected on the site you were looking at.

And it's also possible that the accepted offer reached the seller before yours did. Let's say the property had been listed for $100,000 on Monday. You see the listing on your agent's site, and make an offer of $100,000. Monday afternoon the seller drops the price to $94,000. Someone else sees that, and makes an offer of $94,000. The other buyer's agent gets the paperwork done quickly and submits it Tuesday morning. The seller accepts the $94,000 offer. Your offer comes in Tuesday afternoon. It's $6,000 higher, but too late.

I'd suggest you discuss these issues with your agent to try to determine exactly what occurred.

Hope that helps.
0 votes
Scott Godzyk, Agent, Manchester, NH
Mon Feb 1, 2010
First things first, Once an offer is submitted by the buyer and is accepted by the seller signing the offer (verbal acceptance isnt binding) so when the seller signs it then it is binding. Then no matter what is submitted after that, the accepted offer has to run its course. If their are contingincies than teh seller has to allow the buyer the time they agreed to such as home inspection or mortgage contingincy. Now as far as yoour offer which comes after one was accepted, the key is for you to ask if the offer was accepted, has it been signed by all parties. The listing agent has the duty to submit all offers to the seller as they come in. If it was verbally accepted but not signed, the seller should have had teh opportunity to review your offer. If one was indeed signed, then your offer should be submitted as a back up offer, the seller could review it and hold in case the first offer becomes null and void. The listing agent should not have told you what the other ofers are or were. They have violated theire obligation to their seller by doing this. Lastly a broker can not advertise someone elses listing without permission,k especially at any price other price than what it is listed at. MLS does allow agents to place other brokers listings on their side via a mls web search however it needs to state the property is listed by john smith af xyz real estate. They can not advertise it has their own listing if it is not. As far as your offer, it is in your best interest not to tell the listing agent anything except what is in your offer. If it is cash its cash, not maybe cash or maybe ill get a loan. The best offer isnt always the highest price. It is the best terms such as no contingincies, cash offer, quick close and a slightly lower price with no contingincies is better than maybe closing a higher price that could fall through if the mortgage gets denied or the home inspection fails. I hope this helps
Web Reference:  http://www.ScottSellsNH.com
0 votes
Jerry Lorenz, Agent, Strongsville, OH
Mon Feb 1, 2010
You have a lot of ethical questions in the statement that you just wrote. I am not familiar with Florida Real Estate Law but I would start by calling the listing company and asking to talk with the broker. If it is a large company with several offices I would climb the ladder until my questions were answered.

Jerry A. Lorenz
Russell Realtors
Cell: 440 724 4402
Blog: http://jerrysrealestateblog.blogspot.com
Web Reference:  http://www.lorenz-543.com
0 votes
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