I found a home for sale by owner and asked the owner if he would agree to allow me to use my realtor for the transaction. He agreed to do so. When I brought the realtor to meet the owner and view the home, he said to me in front of the owner, " If you don't buy it I will." Well, it turned out that I didn't buy the property, and my realtor then put a bid on it and congratulated me on the goldmine I turned him onto. Any advice on what to do about this would help.

Why do you think you should do something about it? You did NOT buy the home but your Realtor decided to buy the property. What is the problem?
Why did you not buy the property?

Are you generally a vindictive person? Sorry to be so blunt, but really. What to DO about this?
1. Your agent was open and honest with you upfront. He liked the home. He would buy it IF YOU DID NOT.
2. You did not buy the property.
3. The agent, as he said he would, bought it.
4. The agent loves it.
5. You're not happy for the agent? Would you be happy for a friend who bought a house that you pointed out to the friend and DID NOT WANT FOR YOURSELF?

My advice on what to do is, send your agent a housewarming gift and keep looking for the home that suits YOUR needs.
--A

This forum needs a moderator so stuff like this can be deleted.

Ask your Realtor to take you out to lunch for finding him a "goldmine".

Why deleted? Just goes to show how stupid and vindictive the poster is!

The forum moderator says this is a legitimate question. The agent failed at their fiduciary responsibility, not because he bought the house but because he failed to try and negotiate the best possible terms for his client.

Saying what he said in front of the seller was stupid and clearly did not strengthen the negotiating position of his client.

Agreed. When I was an agent, I may well have acted in a similar way, but not in front of the seller. Hell, I've coached clients to look disappointed when leaving the "perfect home" just to keep the "cat in the bag".

Get Real!

You have absolutely NO idea how hard the agent attempted to negotiate the deal and you also have NO idea WHY the potential buyer decided NOT to buy the house because the poster FAILED to post that Absolutely Relevant Information.

I just love how you jump to conclusions without being in possession of all the FACTS and always attempt to blame the agents!

Based on the post as written the potential buyers is upset the agent bought the property that he passed on! Was the buyer unwilling to pay what the agent did? Was there another reason the potential buyer decided not to make an offer on the property. It is obvious that there was a deal here or the agent would not have bought the property.Did the potential buyer even make an offer on the property?

The agent waited till after his client had decided not to purchase the property before making an offer.

There is nothing here to support this statement. There is not enough data in this post to warrant a discussion. It is just venting. A newly registered with one post. There is just no information about what was said & done before during and after. The whole thing is posted for the benefit of the disgruntled.

Maybe the agent should have said "Wow at this price it is a great deal maybe we can try to get it for even less"... but not in front of the seller. Still not enough here to discuss.

In his defense I would say any active agent right now spends about 90% of their time hammering sellers to lower their price so with all his armor on maybe he got caught by the shock of one way below the market. One can get a little excited. It happens to me. Although lately they don't sell and next week you see an even better deal. That agent may end up eating it later. Mr. Sore Buyer may look like a genius later.

Thats the problem with rapid markets. Buyers look like heros when the values go up in a month and Buyers look like idiots when the market just keeps on dropping & dropping.

That agent would be smart to blow that house out in 60 days and make a quick profit.

Okay now you can delet this thread.

ok, since there was no agency relationship between you and your agent, maybe the agent should buy you breakfast.

Ok here goes. I admit that I didn't give enough information when I wrote this post. I was not able to put that much into it at the time, and just thought that maybe someone would give me some pointers in real estate transactions and ethics. Instead what I received were nothing but insults, which is why I deleted myself from the forum. Now here goes the whole story.
I was working with a realtor in Pa. and had gone out with him one Sunday to look at houses. I didn't see anything I liked. I told my agent about a house I had seen advertised on Craigslist. He said he would not be able to represent me on a For Sale By Owner. I drove over to see the house on my way home and fell in love with it. The seller was very agreeable and agreed to work with my realtor and pay his commission plus closing costs. I called my agent and he said great, come in tomorrow and we'll write up a contract. The next day we took the contract over to the house to meet with the owner. He said he needed two days to go over it as the house belonged to his mother and he was selling it for her.
As for my agent, he told me from the beginning that he would be representing me only, not the seller. When we arrived at the house, we sat down at the kitchen table with the seller to go over
the contract and my agent remarked," I love this house so much (my name) that if something happens and you don't buy it I will. I looked at him like are you for real.
After that I began voicing some of my concerns to the seller. I asked about the huge oak tree in his front yard-the roots were protruding so far out that it had lifted the sidewalk up considerably.
My agent spoke up and said," Don't worry about that, your homeowners insurance will cover it." The next thing that happened was that I asked the owner about the heater. He said it was about 40 years old, my agent remarked, " A heater only costs about $1000, and laughed.
When we were finally outside I asked my agent if he was serious about buying the house. He laughed and said yes. He said that if for some reason I couldn't get the house, he would buy it and lease it to me with an option to buy and that I could buy it back from him in a year.
The reason I couldn't buy that house was because I didn't have enough for a downpayment and my interest rate would have been too high. A few days went by and the seller called my agent to say that his mother wanted more money and wouldn't agree to paying the realtor's commission. Also, I got the good faith estimate from my mortgage company and the figures were much different than what he had originally stated. My realtor said it was a joke and that he was pulling a bait and switch on me. At that point I decided not to give in to the sellers demands for more money and told my realtor so and that I would not persue this any further. He called me a few weeks later to tell me that he had made an offer on the house and was congratulating me on My Find. I asked what he was planning on doing with it, and he did not mention leasing it to me, he said it was worth much more than the seller thought, so he would just flip it and make some money.
Now, I know this is long which is why I didn't put all the info. down at the first post.
However,I am disappointed in the professionals on this forum who chose to bad mouth me without asking for more information. Stupid, Vindictive!!
What a childish bunch of people you all are. If only you had said, hey we need more info to make a judgement on this. No wonder your profession has such a bad reputation. The only decent person on this forum is the moderator.

Loyalty - "A duty of loyalty is one of the most fundamental fiduciary duties owed by an agent to his principal. This duty obligates a real estate broker to act at all times solely in the best interests of his principal to the exclusion of all other interests, including the broker's own self-interest. A corollary of this duty of loyalty is a duty to avoid steadfastly any conflicts of interest that might compromise or dilute the broker's undivided loyalty to his principal's interests."
This pretty much sums it up.

Thank you so much for taking the time to post more detail.

I once had a friend who was a car dealer. I asked him to find me a good deal on a certain kind of car. He found one, I liked it and I bought it. I found out later I paid almost double what he bought it for. I was really upset and took him to small claims cout. The judge said "Well you knew he was in the business of making money buying & selling cars. You had no agreement with him to get paid for finding you a car so what did you expect?"

Real Estate Agents are not assumed public servants expected to act in the good will of the public. An agency relationship exists between a seller and broker. Agents in general have a duty to the seller as well through that agreement. Buyers have no one working in their interest unless they sign a buyers agency agreement. Your agent was mistaken that he could not represent you on a FSBO. He just did not know the tools to use. No agency agreement existed with anyone at the time. He should have worked out a Buyers Agency agreement with you before hand, instead he went in for a listing contract as that was probably the only way he knew how to get paid. It is also a much safer way to get paid because the house had to sell to somebody. An agency agreement with a buyer like having a contract with a ghost. On a FSBO they are like a two ghost contract.

Your post about fiduciary duties is only part of the story. You had no Agent-Principal agreement like Pikes Peak stated above.

This is not true in Illinois and it may not be true in Pennsylvania ethier. In Illinois an agency relationship is assumed depending on the actions of the agent and client, their need not be a written agreement. In either case, I would say that the agent had an ethical if not legal obligation to inform the client of his agency relationship to all parties.

The lack of empathy towards buyerbeware's experience shown by most of the agents on this forum is an example of why a majority of the public view real estate agents in the same light as used car dealers.

I for one, feel my role as a real estate agent has nothing in common with that of a car dealer.

buyerbeware,

You gave no information in your first post. I did ask for additional information in the post directly under your original posting. You asked what you could do. The answer is nothing as you had have no exclusive agency relationship with this agent. You wanted us to tell you he did something bad and that you could do something about it!

He must be new if he told you he could not assist you with an unrepresented seller. He should have had you sign an Exclusive Buyers Agreement with you agreeing to pay him X% commission on the home you would buy with him acting as your agent.

He wrote up the offer per your instructions and the real owner of the property wanted more money and refused to pay your Realtor fees. Had your really wanted the house you would have increased your offer and agreed to pay the Realtor fees yourself but you made a choice not to buy the house.

The time to have voiced concerns to the seller would have been before you wrote the offer. Did you tell your agent before hand that you had a couple of concerns that you would like to have addressed in the offer? Obviously not because you decided to voice them directly to the seller instead of the agent. The agent did not handle the objections in the best way possible but you really should have told him before writing the offer.

The reasons you did not buy the house had nothing to do with your agent.
1. Seller refused to pay his fee and unless you were willing to do it he is under no obligation to work for free.
2. Seller wanted more than you were willing to pay.
3. Your Mortgage Broker lied to you.
4. You did not have enough saved for the downpayment.


He called you weeks later to let you know he had bought the property which he was under no obligation to do. Had you been in contact with him in the weeks between the rejected offer and the call? Were you having him search for other homes for you? Had you gotten a new lender?

Why did you not offer to purchase the property from him or ask him if he was willing to lease it to you as previously discussed?

Yes the moderator is nice because he told you what You Wanted to Hear and Not the actual Facts! Had you taken a few extra minutes to post the details and picked a better forum alias you would not have gotten many of the comments you did. Now break out your common sense and ask yourself why you are blaming your agent for #'s 1-4 that I posted above. Sorry what I have said is not all warm and fuzzy but it is the honest truth.

Freak,

Basic agency did exist in Illinois but once the seller refused to pay the Realtor fees and the buyer did not agree to pay them and the offer was rejected and the seller did not make a new offer the deal was dead. The agent did not divulge any of the buyers confidential information and the offer was not presented directly to the seller. Had the offer been accepted the root issue and the heater issue could have been addressed with a repair agreement after inspection.

2 weeks passed before the agent made an offer on the property. There was nolonger any agency in regards to that property.

Technically the son was practicing real estate without a license as he was not the titled owner of the property and was trying to sell it!

Correction: The moderator is nice because he can empathize with other people's situations and he recognized the one fact that was originally posted and commented that the agent was not effective in negotiating the best terms for his client.

Correction,
There was no negotiation as the offer was REJECTED by the real owner who also refused to pay the Realtor fees and the buyer was not willing to offer more money and did not have enough money for the down payment and was not willing to accept the mortgage companies terms! So tell us Freak how would you have negotiated tat!

Well let's see if I can answer some of these points.
1- Realtor told me he's been in business over 15 years and how much he has made for his company, etc, so no he is not new.
2- Realtor never told me about a Buyer's Agreement and I did not know about such a thing, it was verbal on his behalf.
3- I voiced my concerns to the Realtor about the tree beforehand, and he said he would look into it and thought it might be a county issue. Never heard anymore from him on that so it was brought up at the table with the seller present.
4-The heater issue only came up with the seller because I raised the question of how old it was.
5- I decided to back out of the deal, not because of the seller asking for more, but because(and my agent knew this) of the good faith estimate which basically told me that without a dp my interest would be much higher than originally stated by the broker. My realtor told me that since it had been more than 3 days since we wrote the contract and the seller was given 2 days to review it, that the contract was moot. Yes, I could have purchased the home and yes I did love it, but what it came down to is that I was told by the realtor that if I went with that mortgage company I would have to come up with a lot more money at closing than I thought. Being a first time home buyer and thinking I could buy a home with no money down at a decent rate of interest ( which I was told my the mortgage company) I wasn't prepared financially and made a decision to let the house go. My plan at this time is to do three things.
1- Save more money for a downpayment
2- Get educated by taking a course in the home buying process.
3- Only choose realtors and loan agents that are referred to me.
I don't care that my realtor bought the house. It was his unethical actions during the entire process, not to mention the actions of the mortgage lender.
And by the way the only reason he called me to tell me he purchased the home was because I had originally called and left a message with his secretary to tell him that I had received my voided check and a copy of the Good Faith Estimate that I had requested. He called me back to tell me of his good fortune for which he thanked me and also he said during the conversation, "I told Brad(seller's son) that he got a much better deal from me than he would have gotten from you. NICE!
Well, can you see why I did not post all of this on the first posting. I feel like I've been typing for hours. FYI- The moderator can empathize and has a more pleasant way of dealing with people. I'm sorry that I cannot say that for you Mr. Oaks. Do you always "tell it like it is without considering people's feelings.You need to tone it down a bit. I think you were very rude to call me names even without having all the facts.
What it all boils down to is this. The realtor was looking after his own interests, not mine and that's why I wanted to know what to do. And I'll just ask the moderator this. Was his treatment unethical?

One more thing, I did ask the realtor if he intended to do a lease/purchase to me, and he said he has to make some money on it, then dropped the subject.

Paul,

I would like to correct some errors in your statement.

• The seller DID agree to pay the commission of the agent.

• It doesn't matter who paid a commission or if one was paid at all in regards to agency relationship.

• The ethical issue at hand (the topic of this forum) is AT THE TIME the agent made the comment in front of the seller about him buying the house if his client didn't he was not acting in the best interests of his client. Let me refer you to article 15 of the Illinois Real Estate License Act of 2000:
  
  • (2) Promote the best interest of the client by:
    
    • (F) Acting in a manner consistent with promoting the client's best interests as opposed to a licensee's or any other person's self‑interest.
    
    

 Quote:

Originally posted by Paul Oaks:
Freak,

Basic agency did exist in Illinois but once the seller refused to pay the Realtor fees and the buyer did not agree to pay them and the offer was rejected and the seller did not make a new offer the deal was dead. The agent did not divulge any of the buyers confidential information and the offer was not presented directly to the seller. Had the offer been accepted the root issue and the heater issue could have been addressed with a repair agreement after inspection.

2 weeks passed before the agent made an offer on the property. There was nolonger any agency in regards to that property.

Technically the son was practicing real estate without a license as he was not the titled owner of the property and was trying to sell it!

I love agency discussions they always go whacked. All agents are always assumed to be working for the Seller always. Real Estate 101, it doesnt matter what state you are in.

Who are you working for and who is paying? Always the seller.

Agency exists between the seller and the listing broker and between the listing broker and the selling broker. When you have an escrow you have 3 documents. One confirms agency between the seller and the listing agency, another between the selling broker and the listing broker and another that breaks that agency and says the selling Broker represents the Buyer only.

Paul nails it in a previous post. Can we stay out of personal values & judgements?

Sorry Mr. Opportunities but you couldn't be more wrong. What you are describing is a sub-agency and that is contrary to the Illinois Real Estate Act.

• Sec. 15‑10. Relationships between licensees and consumers. Licensees shall be considered to be representing the consumer they are working with as a designated agent for the consumer unless:
  (1) there is a written agreement between the
  sponsoring broker and the consumer providing that there is a different relationship; or
  
  (2) the licensee is performing only ministerial acts
  on behalf of the consumer.
  
  (Source: P.A. 91‑245, eff. 12‑31‑99.)

Sorry I did not have enough empathy for you with so little information to go on. Your agent was obviously not the best fit for you and for that I am sorry. It would have been good to mention from the beginning that you were a first time homebuyer and the entire story.

What you need to do from this point on is find a new mortgage broker who fully understands your situation. Get pre-approved and know in advance what you will have to put down, what is the max you can afford and what is the most you are comfortable spending if that number is different form your max approval amount. There are tons of programs available for first time buyers.

Get from the lender a pre-approval letter for the max you are comfortable spending.

Look for an agent the specializes in first time home buyers. See if any area agents are holding a first time home buyers seminar and go to it. Once you select a Realtor I would suggest signing an Exclusive Buyers agreement as that agent will then be only working for you.

I do wish you best of luck in the future.

I am sure sure the mod will say the agent acted in an unethical manner(he always does) but he actually violated no part of the COE. He obviously is lacking in some areas and I am very surprised he has been in the business for 15 years.

Best advice is find an agent with whom you feel comfortable and an honest mortgage broker.

In my opinion his actions at the very least showed poor judgment and skill. At worst he acted unethically.

Thank you Mr. Oaks for that very tactful response. I admit to not having put everything down. To be honest there was just so much information, and I know I've left things out, such as the fact that I did have a pre-approval letter. Thanks for the help, I will most definitely have a Buyers Agreement signed by my next realtor and take a First Time Homebuyers Course. I know the name BuyerBeware is offensive, but I actually only meant that Buyers need to beware to know their stuff before they go out shopping for a home, get educated and make sure you have money in the bank. (money talks). My biggest mistake was in not shopping around for lenders. By the way something else I neglected to mention is that the lender advised me not to bother with a home/termite inspection as they are really just a waste of money. He said PA doesn't have termites. That was really a red-flag warning to me, but I was so excited to actually think I might be able to buy a home( been renting way too long). He has been in business for 18 years. I believe they both acted unethically and sorry to say but this is the reason for the bad rap on your profession.
For the future I intend to be very prepared up front. If anything I've learned a valuable lesson. I'm much too trusting and that's not always good.

I don't know how it is in other states, but in Texas the customer/client must be presented with an agency relationship form which describes the various agency relationships that can exist and defines who works for whom.

What is the law in other states? It seems like this would be the proper thing to do regardless of whether or not is required by law.

I'm sorry you had such an unpleasant experience.

From my quick read of this it seems like the only thing done wrong was that the agent made an oral promise that (s)he did not keep, namely to lease the property to you with an option to buy.

However, since this was oral it would be a tough case to argue in a court of law or ethics board.

I am not an attorney and am not giving legal advice.

Note from moderator: I have edited out the name calling as it detracts from an otherwise valid point of view.

[Edited by moderator]

AS for the poster...Loyalty...How is your loyalty breeched if you did not buy the property.

Did you attempt to buy the property and not proceed for a number of reasons? Did he start his purchase after you were no longer an elligble buyer? If thats the find another agent.

I do have a problem if he told you that he would buy the property if you didn't in front of the seller. This would certainly disadvantage you at the onset of the negotiations and be in conflict with your interests.

[Edited by moderator] remember that not all agents are created equally just as not all surgeons are created equally. How much effort did you put into selecting your agent and if you feel so strongly that this is a problem contact the agents regulatory body and take it up with them. [Edited by moderator]

As a Realtor and Mortgage Broker I have worked with a number of first-time home buyers. I understand that you are upset, but the better question to ask yourself is why you are upset. It's because you didn't understand enough about the entire process? What if your offer was accepted and then you learned you needed $xx dollars for closing costs, $xx for pre-paids and another $xx dollars for a 12 month insurance rider? OK, now $xx for utility deposits, etc. Would you have been prepared? I have not even mentioned the word downpayment! If not, do you realize that the very same contract you are talking about could have allowed the sellers to sue you to perform? A GOOD Agent or Lender will take the extra time to help educate a potential new home-buyer of things one might expect in the process. It's not a legal obligation it's just a good practice. Im sure that will create a few posts but I am mearly trying to state that even the best intended agent can not possibly teach a prospective 1st-time buyer every possible situation that might arrise. The fact of the matter is that purchasing a home is a HUGE investment. Do your research and educate yourself before making that kind of decision. Would you marry someone just because you found a court-house that would perform the ceremony? Could you sue if the marriage failed? or better yet, if the pther person changed their mind? Let's be honest.... That's just crazy! If I'm understanding you correctly the terms of the offer from the seller and the lender did not meet your approval. Therefore the offer is no longer valid. That decision was made by you, not the Agent. What exactly did you expect your agent to do differently? They can not change the terms of your financing and you were not willing or able to put more money down, so what did you expect to happen differently? You can't just have it because you want it and you can't expect the selers to to sell just because you are not in a position to buy. If the person who represented you in this purchase had not bought the home, then someone else would have. Don't hate them for that. You were not in a position to make a stronger offer at the time. My advise would be to find a realtor & lender that specializes in 1st time homebuyers and that is willing to spend the extra time educating you in the process. You might just find that the realor you were working with would go that extra mile for you because of the deal you found that worked out for them. Again, it's not their fault that the financing didn't work out for you. It happens. Educate yourself on your credit worthiness and how to find a lender that best meets your needs. There are lender progarms available that might have offered your some alternative financing options. Programs available to lenders are not all created equal. The key is finding the one that works for your needs. You have already proved that you can find a good value... now learn how to make your homeownership dreams a reality!

I love discussions like this because it shows that Realtors are concerned about ethics and the perception of the general public. I commend BuyerBeware for hanging in there with her story and, obviously, taking advice when she got it. A lot of people would not have gone to that trouble and just blasted Realtors forever. I do think a lot of the misperception of the public is due to not being educated about the buying process and I wonder what we as a group can do about that. All else being said, however, I think BuyerBeware's agent had lousy skills and that is something we also need to work on.