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#189065 - 12/24/07 02:06 PM Something To Never Get Caught In
steph5280 Offline
Junior Member

Registered: 12/21/07
Posts: 3
Loc: Austin,TX
I am a Realtor in a resort community in Texas, popular for vacation home sales.

In February of 2006, I was referred to a client by a friend of mine. He was interested in purchasing a vacation home, as he wanted to move his boat to the area. After setting up a search for him, he and his wife made a trip to the area to look a potential residences. Because of personal family problems, they decided not to puchase at that time. They made several more appointments throughout the year, but always cancelled at the last minute.

In April of 2007, they made the trip again and had picked out several listings to take a look at. I knew based on what they had liked before, they would not care for any of them, so I previewed a few that, while in their gateway, were not selected as something they wanted to see. We looked at all of the homes, and as I suspected they decided to make an offer on one of the homes that was not on their initial list. The asking price was 230K, and the home had been on the market for 8 days. We made an offer for 224K. The sellers agent came back with a counter of 227K. When I spoke to my client, he wanted to think about it. I told him I was sure the property would go quickly, as it was priced very well. He called back 24 hours later, and said he would pay 227K. When I called the seller's agent, he informed me he had received another offer that morning, and to bring our best offer. My client decided to come back at 228K. I was called later by the sellers agent, and told that the other offer had been accepted.

I always keep an eye on properties that I have lost as they go through the pending process, and I was shocked to see that the sellers agent had raised the asking price to 240K, while it was still pending. In the mean time my client had continued to mark favorites on his gateway, and inquire about other properties. Then, abruptly he asked to be discontinued from the search, with no explanation. I figured it was family problems again.

Last week I learned that my former client was the ultimate buyer of the property. He paid 240K for it and used the sellers agent and a girl from his office that had her license for 1 month as the intermediary. I have no idea who contacted whom, and have gone through a wide range of emotions in regards to these turn of events.

Foolishly, I did not have a buyers argeement with these people, as they were friends of a friend, and I trusted them. I can honestly say, I will never do this again, and I hope that this posting will prevent another agent from having this happen to them. I am waiting until after the holidays to decide if I am going to confront the sellers agent. Any advice would be appreciated.

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#189074 - 12/24/07 03:34 PM Re: Something To Never Get Caught In [Re: steph5280]
Perky_REALTOR Offline
Mod Squad
Major Contributor

Registered: 11/27/06
Posts: 7685
Loc: PA
That bites.

However, did you have your offers in writing? Wouldn't that be enough to show procuring cause??

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#189075 - 12/24/07 03:43 PM Re: Something To Never Get Caught In [Re: Perky_REALTOR]
steph5280 Offline
Junior Member

Registered: 12/21/07
Posts: 3
Loc: Austin,TX
Yes, both offers were submitted in writing and signed by the buyer.

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#189087 - 12/24/07 05:09 PM Re: Something To Never Get Caught In [Re: steph5280]
Real_Estate_GA Offline
Member

Registered: 05/05/06
Posts: 55
Loc: Atlanta
The listing broker just might owe you a commission. You procured a ready, able & willing buyer. That equals an earned commish.

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#189093 - 12/24/07 05:49 PM Re: Something To Never Get Caught In [Re: Real_Estate_GA]
Paul Oaks Offline
Major Contributor

Registered: 06/23/04
Posts: 3370
Loc: Central Illinois
I agree 100%. Contact the listing broker and inform him or her that you have a procuring cause case and will be filing it with the board.


 Originally Posted By: Real_Estate_GA
The listing broker just might owe you a commission. You procured a ready, able & willing buyer. That equals an earned commish.
_________________________
Paul Oaks
Oaks Real Estate Group

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#189131 - 12/25/07 09:15 AM Re: Something To Never Get Caught In [Re: Paul Oaks]
super realtor Offline
Major Contributor

Registered: 05/01/05
Posts: 8473
Loc: georgia
This is a dog eat dog world.Even when I deal with family-ESPECIALLY family everything is in writing.Had you made them sign an EBA up front and they said no I don't want to do that you would have had your answer on there intentions.

Some buyers have to be given the benefits before they sign but that is different from this situation.I would just get over it and move on.

File the grievance if you want to.You have to decide how YOU will be treated and how YOU want to run your business.Don't ever lose site of that with buyers and sellers.

I have different developers that want to work with me.The ones that don't play on my terms can go off a cliff I could care less.There are many that will gladly compensate me for what I feel I am worth for my time.You only have so much time so you need to maximize it.

Merry Christmas and I hope your presents are EXTRA BIG this year!

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#189134 - 12/25/07 09:30 AM Re: Something To Never Get Caught In [Re: super realtor]
staggart Offline
Veteran Member

Registered: 09/18/04
Posts: 930
Loc: Idaho Falls, ID, USA
I'm not sure if this situation meets the definition of procuring cause.

Based on the initial statement. the initial offer was not accepted. If there was another offer (the one the listing agent claimed had been accepted), then this offer was rejected on its own terms.

A client without a buyer representation agreement is then free to use whomever they want in the future -- even on the same property.

Having said that, was what the buyers did appropriate? No. They cut Steph5280 out of the deal for indeterminate reasons. As mentioned in the initial posting, they, justifiably, did get hit in the form of a higher closing price.

Is what the other agent/agents did unethical under the Code of Ethics? No. They did not interfere with a representation agreement since there was none.

But, were the actions of the listing broker courteous? No. The kindest thing he could have done is send the buyers back to Steph5280. The goodwill would have been worth far more than extra commission side.
_________________________
Steve Taggart
Broker
CENTURY 21 Advantage
Southeast Idaho's Real Estate Leader(sm)
The GOLD Standard(sm)
400 W. Sunnyside Road
Idaho Falls, ID 83402
(208) 524-2121
http://www.IFhomes.com
http://www.IFreschool.com
staggart@ida.net

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#189146 - 12/25/07 11:42 AM Re: Something To Never Get Caught In [Re: staggart]
TargetRE Offline
Member

Registered: 11/19/05
Posts: 177
Loc: LA
These situations are state specific. I'm not sure how TX defines procuring cause but I'd file and let the board decide. Why? It's like instant replay, it's worth a shot. And from what was written, I doubt some newbie agent landed the buyer-it appears the broker is trying to cover. Also the property was pending the whole time from when the original offer was rejected. I smell a rat. Let them produce the paper work for the state board. Don't bother with the Realtor association, they have no power to revoke, offically repremand and the COE is a joke.

Another thing. I don't blame the buyers. Since the buyers presented a recent offer through a licensed broker/agent, the listing agent in an abundance of caution and acting in a transparent manner should have contacted the previous broker/agent. How can the listing agent know he didn't interfere with a buyers agreement? I wouldn't take the word of the buyers alone. But this situation and the way the listing agent acted is the norm for the business-greed is the name of the game.


Edited by TargetRE (12/25/07 11:53 AM)

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#189156 - 12/25/07 01:55 PM Re: Something To Never Get Caught In [Re: TargetRE]
Real_Estate_GA Offline
Member

Registered: 05/05/06
Posts: 55
Loc: Atlanta
The listing broker interfered with this agent's agency relationship with the buyer. While there is no written brokerage engagement, an agency agreement was established through the original offer, albeit oral. This process is called ratification.

Had there not been a written offer to purchase, an agency relationship would be more difficult to prove.

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#189159 - 12/25/07 03:49 PM Re: Something To Never Get Caught In [Re: Real_Estate_GA]
staggart Offline
Veteran Member

Registered: 09/18/04
Posts: 930
Loc: Idaho Falls, ID, USA
Real_Estate_GA:

That is not true in most states. The majority rule is that agency is only create by a representation agreement, not orally or by a purchase & sale agreement. Of note, the Code of Ethics, in Article 16 requires REALTORS to respect agency "agreements". I've spend some time reviewing decisions with respect to this provision. I'm not aware of a case where an ethics board has upheld an oral or implied agreement.

I just looked at the Texas brokerage statute. It states, in Sec. 1101.558., that "The broker becomes the buyer's agent by entering into an agreement to represent the buyer, usually through a written buyer representation agreement." The statute goes on to say that the licenses must clearly disclose their relationship to the buyer. As I read their statutory scheme, there is no form of implied agency.

So, it looks like buyer agency is not an avenue for our friend in Texas.



Edited by staggart (12/25/07 03:52 PM)
_________________________
Steve Taggart
Broker
CENTURY 21 Advantage
Southeast Idaho's Real Estate Leader(sm)
The GOLD Standard(sm)
400 W. Sunnyside Road
Idaho Falls, ID 83402
(208) 524-2121
http://www.IFhomes.com
http://www.IFreschool.com
staggart@ida.net

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#189162 - 12/25/07 04:17 PM Re: Something To Never Get Caught In [Re: staggart]
Real_Estate_GA Offline
Member

Registered: 05/05/06
Posts: 55
Loc: Atlanta
Staggart,

You are confusing an “agency agreement” with a “brokerage engagement”. A brokerage engagement clearly defines the relationship between the buyer and the broker in writing -- and it’s enforceable in court; however, forming an agency agreement does not require an expressed written contract. By allowing the agent to prepare a written offer, the buyer -- probably unknowingly -- consented to an agency agreement through ratification. Thus, this is provable in court by the common law of agency.

Note: This is not legal advice and should not be construed as such.

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#189169 - 12/25/07 08:31 PM Re: Something To Never Get Caught In [Re: Real_Estate_GA]
staggart Offline
Veteran Member

Registered: 09/18/04
Posts: 930
Loc: Idaho Falls, ID, USA
Common law of agency has been eliminated in most states. In those jurisdictions, agency is governed by statute and created by a written agency agreement, usually as contained in a buyer/seller brokerage representation agreement. My reading of the Texas statute is that a writing is presumed (If anyone in Texas believes otherwise, please point out the statutory provision that allows for the creation of agency without a written agreement).

If Georgia is still doing common law agency, it is in the minority.
_________________________
Steve Taggart
Broker
CENTURY 21 Advantage
Southeast Idaho's Real Estate Leader(sm)
The GOLD Standard(sm)
400 W. Sunnyside Road
Idaho Falls, ID 83402
(208) 524-2121
http://www.IFhomes.com
http://www.IFreschool.com
staggart@ida.net

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#189176 - 12/25/07 09:34 PM Re: Something To Never Get Caught In [Re: steph5280]
Paceryder Offline
Veteran Member

Registered: 05/14/05
Posts: 937
Loc: The Milky Way
 Originally Posted By: steph5280
I am a Realtor in a resort community in Texas, popular for vacation home sales.

In February of 2006, I was referred to a client by a friend of mine. He was interested in purchasing a vacation home, as he wanted to move his boat to the area. After setting up a search for him, he and his wife made a trip to the area to look a potential residences. Because of personal family problems, they decided not to puchase at that time. They made several more appointments throughout the year, but always cancelled at the last minute.

In April of 2007, they made the trip again and had picked out several listings to take a look at. I knew based on what they had liked before, they would not care for any of them, so I previewed a few that, while in their gateway, were not selected as something they wanted to see. We looked at all of the homes, and as I suspected they decided to make an offer on one of the homes that was not on their initial list. The asking price was 230K, and the home had been on the market for 8 days. We made an offer for 224K. The sellers agent came back with a counter of 227K. When I spoke to my client, he wanted to think about it. I told him I was sure the property would go quickly, as it was priced very well. He called back 24 hours later, and said he would pay 227K. When I called the seller's agent, he informed me he had received another offer that morning, and to bring our best offer. My client decided to come back at 228K. I was called later by the sellers agent, and told that the other offer had been accepted.

I always keep an eye on properties that I have lost as they go through the pending process, and I was shocked to see that the sellers agent had raised the asking price to 240K, while it was still pending. In the mean time my client had continued to mark favorites on his gateway, and inquire about other properties. Then, abruptly he asked to be discontinued from the search, with no explanation. I figured it was family problems again.

Last week I learned that my former client was the ultimate buyer of the property. He paid 240K for it and used the sellers agent and a girl from his office that had her license for 1 month as the intermediary. I have no idea who contacted whom, and have gone through a wide range of emotions in regards to these turn of events.

Foolishly, I did not have a buyers argeement with these people, as they were friends of a friend, and I trusted them. I can honestly say, I will never do this again, and I hope that this posting will prevent another agent from having this happen to them. I am waiting until after the holidays to decide if I am going to confront the sellers agent. Any advice would be appreciated.


Wouldn't the selling agent have KNOWN they were the same buyer? Where I am we give the buyers name with the offer.

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#189183 - 12/25/07 10:35 PM Re: Something To Never Get Caught In [Re: Paceryder]
JoeyBagadonuts Offline
Veteran Member

Registered: 06/24/06
Posts: 1074
Loc: Bucks County PA
Wow, that does stink.
_________________________
Joseph Grabowski, REALTOR®
Keller Williams Preferred Real Estate – Yardley, PA
Buying or selling a home, land, or real estate in Bucks County Pennsylvania?
Visit my Bucks County Homes & Real Estate Website

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#189192 - 12/25/07 11:49 PM Re: Something To Never Get Caught In [Re: JoeyBagadonuts]
staggart Offline
Veteran Member

Registered: 09/18/04
Posts: 930
Loc: Idaho Falls, ID, USA
Merely writing an offer for a client does not (in most states \:\) ) create an obligation on the part of any other agent to stay away from that client. Thus, if the listing agent did recognize it was the same client, it might not be "wrong". I'm still not sure that the listing agent did anything "legally wrong" or even violated the Code of Ethics.

This discussion really highlights the importance of signing buyer representation agreements.

One point that has not yet been made is that, even if there had been a buyer rep., it might have expired (remember the offer was in April -- a six month agreement would have expired in October). It is unclear when this property actually closed.

A clear lesson is the importance of covering oneself whenever you do business (regardless of personal relationships) and the relevance of ethical conduct (here, the proper thing would have been for the listing agent to have offered something to the original agent who assisted the buyer).
_________________________
Steve Taggart
Broker
CENTURY 21 Advantage
Southeast Idaho's Real Estate Leader(sm)
The GOLD Standard(sm)
400 W. Sunnyside Road
Idaho Falls, ID 83402
(208) 524-2121
http://www.IFhomes.com
http://www.IFreschool.com
staggart@ida.net

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#189201 - 12/26/07 08:47 AM Re: Something To Never Get Caught In [Re: staggart]
Real_Estate_GA Offline
Member

Registered: 05/05/06
Posts: 55
Loc: Atlanta
While common law of agency isn’t the prevailing determinate anymore, it is still a viable interpretation of agency agreements. Once again, an offer was made through this selling agent on the same property that is in question. That created an agency agreement through ratification. The listing broker should have know this and acted accordingly.

At the end of the day, this selling agent established an agency agreement -- albeit implied. Whether or not it will hold up in court, that is another story.

Last point: Many listing agents, by offering any kind of advice to a buyer, inadvertently create dual agency. Such as: suggesting that the buyer offer a lower price or other items of negotiation. These actions create an inadvertent dual agency that can hold the listing broker liable in court -- unless both parties agree in writing to dual agency.

Note: This is not legal advice and should not be construed as such.

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#189213 - 12/26/07 10:26 AM Re: Something To Never Get Caught In [Re: Real_Estate_GA]
staggart Offline
Veteran Member

Registered: 09/18/04
Posts: 930
Loc: Idaho Falls, ID, USA
Real_Estate_GA --- Most state statutes explicitly overturn the common law of agency. That precludes a court from creating agency where no agreement has been signed. According to a two-year-old count from NAR, about 32 states had done so at that point.

Here, the issue is whether or not Texas still uses implied agency. But, my quick reading of their statute is that they've gone to a writing requirement. Would any of our Texas friends care to clarify? Is a written agreement required in Texas to create agency?
_________________________
Steve Taggart
Broker
CENTURY 21 Advantage
Southeast Idaho's Real Estate Leader(sm)
The GOLD Standard(sm)
400 W. Sunnyside Road
Idaho Falls, ID 83402
(208) 524-2121
http://www.IFhomes.com
http://www.IFreschool.com
staggart@ida.net

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#189214 - 12/26/07 10:45 AM Re: Something To Never Get Caught In [Re: staggart]
pikes peak Offline
Major Contributor

Registered: 12/15/04
Posts: 2744
Loc: CO
Remember, procuring cause is a chain of events and governed by Art. 17 in the COE:

Agency and procuring cause
The guiding rule: There is no predetermined rule.
http://www.realtor.org/rmomag.nsf/pages/AgencyandpNanArchive1999Dec

NAR Professional Standards Procedures
Procuring Cause - An Introduction
http://www.gbreb.com/gbar/membership/ethics/pdfs/Procuring%20Cause-An%20Introduction.pdf

LAW: Procuring Cause
http://www.realtormag.com/rmomag.NSF/pages/lawnov05?OpenDocument

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#189215 - 12/26/07 10:55 AM Re: Something To Never Get Caught In [Re: pikes peak]
staggart Offline
Veteran Member

Registered: 09/18/04
Posts: 930
Loc: Idaho Falls, ID, USA
Pikes Peak --- Your probably right in that procuring cause is the best argument. Great citations!

But, if I were on the selling agent's side, I'd argue that the "chain of events" was interrupted by the seller rejecting the first offer.
_________________________
Steve Taggart
Broker
CENTURY 21 Advantage
Southeast Idaho's Real Estate Leader(sm)
The GOLD Standard(sm)
400 W. Sunnyside Road
Idaho Falls, ID 83402
(208) 524-2121
http://www.IFhomes.com
http://www.IFreschool.com
staggart@ida.net

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#189217 - 12/26/07 11:13 AM Re: Something To Never Get Caught In [Re: staggart]
pikes peak Offline
Major Contributor

Registered: 12/15/04
Posts: 2744
Loc: CO
Steve, take a look at the link below.
Why, when and by whom was the chain of events interrupted? I would not venture a guess of how the ruling would turn out.

Procuring Cause
http://www.frascona.com/resource/jag594pc.htm

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#189221 - 12/26/07 11:32 AM Re: Something To Never Get Caught In [Re: pikes peak]
Real_Estate_GA Offline
Member

Registered: 05/05/06
Posts: 55
Loc: Atlanta
You are assuming that going before your local Board of Realtors Association is the only venue by which to settle this. I’m sure NAR has set forth their interpretation, but another court may interpret things in a different manner. If the court considers common law of agency, then this selling agent has a good chance.

Once again, had there been no written offer, then agency is very difficult to prove without a written brokerage engagement. In Georgia, brokerage engagements MUST be in writing; however, an agency can still be created without an agreement in writing -- intentionally or not.

Listing brokers should take extreme care.

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#189225 - 12/26/07 12:01 PM Re: Something To Never Get Caught In [Re: Real_Estate_GA]
pikes peak Offline
Major Contributor

Registered: 12/15/04
Posts: 2744
Loc: CO
"You are assuming that going before your local Board of Realtors Association is the only venue by which to settle this. I’m sure NAR has set forth their interpretation, but another court may interpret things in a different manner. If the court considers common law of agency, then this selling agent has a good chance."

Not assuming. When I joined my local RE board, I agreed to arbitrate IAW the COE Art. 17. However, as quoted in one of the links above, if you are NOT a REALTOR, it obviously does not apply.
p.s. the same local laws apply in arbitration as far as I know.

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#189228 - 12/26/07 12:05 PM Re: Something To Never Get Caught In [Re: pikes peak]
staggart Offline
Veteran Member

Registered: 09/18/04
Posts: 930
Loc: Idaho Falls, ID, USA
The argument for interruption would be that each potential sale is discrete.

The first was the initial offer which was rejected.

The second would be the one that was accepted and closed.

I'm not advocating for that position but I can see some level of validity for it.
_________________________
Steve Taggart
Broker
CENTURY 21 Advantage
Southeast Idaho's Real Estate Leader(sm)
The GOLD Standard(sm)
400 W. Sunnyside Road
Idaho Falls, ID 83402
(208) 524-2121
http://www.IFhomes.com
http://www.IFreschool.com
staggart@ida.net

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#189229 - 12/26/07 12:48 PM Re: Something To Never Get Caught In [Re: staggart]
DueDiligence Offline
Veteran Member

Registered: 12/05/06
Posts: 1265
Loc: Wild Wild West
Excellent discussion.

Did Steph5280 receive a copy of his last offer of, I believe, $228K, with "rejected" written on it? If not, I would argue that Steph's buyer was still in the game despite a verbal assertion by seller's agent that another buyer had been selected-- all things being equal. We have no writing to the effect that Steph's buyer was disqualified. And so, we ignore the verbal from the seller's agent and we stand on the fact (considering the outcome) that negotiations continued with Steph's buyer. But, there was an intervening factor, which, to my mind breaks the chain of "custody".

The seller's offer changed. Even though sale was considered pending, the seller makes a new offer to all interested parties. At that point, all interested buyers start over with new contract offers. Buyer agency ends with the new offer situation. Procuring cause does not. Procuring cause is an ethics concern, not a legal concern. Again, another contradiction to deal with.

My suspicion regarding the loss of Steph's buyer to the seller's agent center around the verbal exchanges, WHICH most buyers find hard to believe, and expect their agent to PROVE that they lost a contract to another buyer. I believe Steph inadvertently lost credibility with his buyer; hence the switch to the seller's agent or broker by his buyer.

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#189233 - 12/26/07 01:15 PM Re: Something To Never Get Caught In [Re: DueDiligence]
pikes peak Offline
Major Contributor

Registered: 12/15/04
Posts: 2744
Loc: CO
"My suspicion regarding the loss of Steph's buyer to the seller's agent center around the verbal exchanges, WHICH most buyers find hard to believe, and expect their agent to PROVE that they lost a contract to another buyer."

That could be, and would have been a big mistake especially on the buyers agent for not following the contract, the Texas RE contract says this in para.#:
"21. NOTICES: All notices from one party to the other must be in writing and are effective when mailed to, hand-delivered at, or transmitted by facsimile or electronic transmission as follows:"

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#189237 - 12/26/07 01:32 PM Re: Something To Never Get Caught In [Re: pikes peak]
DueDiligence Offline
Veteran Member

Registered: 12/05/06
Posts: 1265
Loc: Wild Wild West
PP: It's in our contract, also. However, try to enforce it with the opposing agent.

The only thing I can think of when opposing agent gives you a verbal and refuses to do a writing, is to serve opposing agent with a notice via fax and email with the contract verbiage quoted along with a cure notice!

What happens after he ignores the cure notice is-- damages for breach! That's the next logical step, but it'd never fly in real estate... Nothing rarely does in a pure legal sense. (Is that a double-negative? I think it is-- and perfect for real estate application!)

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#189238 - 12/26/07 01:40 PM Re: Something To Never Get Caught In [Re: DueDiligence]
pikes peak Offline
Major Contributor

Registered: 12/15/04
Posts: 2744
Loc: CO
Since the contract is between the buyer and seller, I hope that the agents were not the stone in the road in following the contract.
I hear and see it frequently when agents become so self important in the transaction that they think they are the buyers and sellers.

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#189244 - 12/26/07 02:12 PM Re: Something To Never Get Caught In [Re: staggart]
Merkaba Offline
Veteran Member

Registered: 03/20/07
Posts: 1090
Loc: South Carolina
steve is right, writing a contract, at least in SC doesnt give procuring cause. A repetitive test question.

You can always get an EBA for one day...Its a business. Quit treating people like its a handshake smiley happy go lucky thing. Youre self employed, make them respect that. No reason why someone wouldnt sign an EBA for a day or two days unless they are up to nonsense.

Good luck with this situation.


Edited by Merkaba (12/26/07 02:13 PM)
_________________________
Realtor Extraordinaire, ABR, E-Pro

Keller Williams Realty
Upstate South Carolina

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#189255 - 12/26/07 02:54 PM Re: Something To Never Get Caught In [Re: Merkaba]
super realtor Offline
Major Contributor

Registered: 05/01/05
Posts: 8473
Loc: georgia
You have to remember not all brokers/agents are Realtors.So to those people the code of ethics they have written down and all the sanctions mean NOTHING as they don't belong to the organization.Then it would go to was a LAW broken and a complaint filed in writing to the local state real estate commission that controls all the liscensing.

I know many brokers that are not realtors.They don't want to pay the fees and deal with the BS and it doesn't add much if anything to the type of real estate transactions they are doing.

Yes a listing agent/broker can create IMPLIED agency VERBALLY although very difficult to prove.Dual agency-representing both parties is actually outlawed in a number of states.It is allowed in GA but most brokers stay away from it for litigation reasons.All we have to do is check a box that we represent the seller but not the buyer and that we do not offer dual agency.If the buyer is not OK with this we can assign soemone to them and collect a refferal fee or they can choose anyone else agent-broker they want to represent them.If the buyer reads and signs the contract and they didn't understand something that is tough luck.We have what's called the right of your own inquiry where the buyers have the obligation to read,understand,and ask questions BEFORE signing.If they waive that right it is there fault for not going to an attorney,getting an inspection etc.

They cannot say the relied ont he advice of the agent-broker because in our forms it CLEARLY states that is outside our area of expertise and for the buyer to conduct there own due diligence before agreeing to anything.

You can stay clear as a listing agent from creating implied agency by knowing the difference between a "ministerial act" and what would be considered an "implied or writeen agency act"

On our state's website it specifically states what is considered a ministerial act for a buyer or seller and what would create a form of agency.

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#189271 - 12/26/07 04:52 PM Re: Something To Never Get Caught In [Re: super realtor]
staggart Offline
Veteran Member

Registered: 09/18/04
Posts: 930
Loc: Idaho Falls, ID, USA
Due Diligence --

Interesting argument that the seller's new price was an invitation for bids, thus terminating any previous offers. Pretty clever and, I would guess, probably right.

I guess the counter would be that the new, higher price was a counter.
_________________________
Steve Taggart
Broker
CENTURY 21 Advantage
Southeast Idaho's Real Estate Leader(sm)
The GOLD Standard(sm)
400 W. Sunnyside Road
Idaho Falls, ID 83402
(208) 524-2121
http://www.IFhomes.com
http://www.IFreschool.com
staggart@ida.net

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#189278 - 12/26/07 05:40 PM Re: Something To Never Get Caught In [Re: staggart]
Real_Estate_GA Offline
Member

Registered: 05/05/06
Posts: 55
Loc: Atlanta
This could have been a cash back scheme... just my thoughts. Any time the MLS listing price is raised in the database, it is a red flag.

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#189279 - 12/26/07 05:46 PM Re: Something To Never Get Caught In [Re: staggart]
pikes peak Offline
Major Contributor

Registered: 12/15/04
Posts: 2744
Loc: CO
How about an update steph5280, everyone here is doing alot of guessing.

"Interesting argument that the seller's new price was an invitation for bids, thus terminating any previous offers. Pretty clever and, I would guess, probably right.

I guess the counter would be that the new, higher price was a counter."

I don't think that happened.
The weasel listing agent was approached by the weasel buyer and cut out the buyers agent for their own gain. The weasel seller bumped the price up to cover the weasel buyers closing cost and/or bought down the rate.
ok, I'm guessing, but it's the most likely scenario I can think of.
p.s. RE GA, I had that in my initial resonse and deleted it, hoping for "higher moral ground" by the weasel listing agent, but in todays RE world it's a possibility.


Edited by pikes peak (12/26/07 05:50 PM)
Edit Reason: add p.s.

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#189281 - 12/26/07 05:55 PM Re: Something To Never Get Caught In [Re: pikes peak]
Real_Estate_GA Offline
Member

Registered: 05/05/06
Posts: 55
Loc: Atlanta
These cash back schemes are rampant. Many times, buyers attend these investor-seminars that encourage this fraud.

During fraud investigations, they look at whether or not the asking priced was raised in the MLS system. For what other reason would the asking price be raised? Legitimate seller concessions would not require such an act.

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#189288 - 12/26/07 06:35 PM Re: Something To Never Get Caught In [Re: super realtor]
Merkaba Offline
Veteran Member

Registered: 03/20/07
Posts: 1090
Loc: South Carolina


I was thinking about this too. How you have to represent the seller if youre showing a house with no EBA, otherwise you could be treading into implied agency, etc.


Edited by Merkaba (12/26/07 06:35 PM)
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#189475 - 12/27/07 06:48 PM Re: Something To Never Get Caught In [Re: pikes peak]
phillyphan Offline
Junior Member

Registered: 12/11/07
Posts: 7
Loc: PA
I agree with pikes peak about the reason for the increased listing price in MLS was to most likely allow the buyer to cover his/her closing costs. This is typically not necessary in your standard FNMA type loans, but for a subprime loan some lenders will not allow a higher loan amount than the list price.

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#189486 - 12/27/07 07:18 PM Re: Something To Never Get Caught In [Re: Real_Estate_GA]
ManFromTheBand Offline
Veteran Member

Registered: 08/23/05
Posts: 704
Loc: Spring Hill, FL
Ditto...that's called mortgage fraud. You can absolutely get seller concessions to help cover loan expenses...but there is never any GOOD (read, ethical) reason to raise the list price of a home in the MLS after it is already pending. It's screaming mortgage fraud to me...but hey...what do I know...

I would absolutely report it to your local board and go after your commission (even if you don't get compensated, you might shed light on a bad agent doing underhanded deals (and stealing your customer & food off your table to do it!).

 Originally Posted By: Real_Estate_GA
This could have been a cash back scheme... just my thoughts. Any time the MLS listing price is raised in the database, it is a red flag.
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#189637 - 12/28/07 05:59 PM Re: Something To Never Get Caught In [Re: steph5280]
steph5280 Offline
Junior Member

Registered: 12/21/07
Posts: 3
Loc: Austin,TX
Thank you for all of your responses. I have been away from the boards visiting family for Christmas.

I have learned a very expensive lesson from this experience, one that I will never forget. I am leaning towards going after the listing agent, as I am suspicious this is something he has done before, based on the circumstances.

Before I learned the buyer was my buyer, I was suspicious when the price was raised while it was pending. Also, the agent used for the buyers was from the listing agents office, and had only had her license 6 weeks. If my clients had felt that I was negligent in some way in the negotiations, they would have sought out a more experienced agent. The buyer is a businessman himself.

There is another interesting piece of infomation. The buyer has both this property and his main residence in Texas homesteaded. This is not legal, but it may be an error in the tax records.

Thanks again for your input, I will keep you posted.

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#190351 - 01/02/08 05:31 AM Re: Something To Never Get Caught In [Re: steph5280]
Landwatch.com Offline
Member

Registered: 12/24/07
Posts: 37
Loc: US
Don't take it too hard on yourself. We are in business and at times we have to feel cheated. This in turn gives us a learning experience. Happy New Year and all the best for this year.

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