I suspect that my buyer was negotiating on two properties at the same time. The other property was outside the geographic area of the Exclusive Buyer contract they had signed with me. I'm a new agent, so forgive my ignorance, but isn't it unethical to be in negotiations on two properties at the same time, if you only intend to buy one of them?

Hello
Can you clarify, who is writing the other contract?
Is the contract on the property you are representing is ratified?
Is the property located in 2 different state?
If so then do you have license in both the states?

Ritu

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Ritu Desai
Buying or Selling in Northern Virginia? Contact me for all your residential real estate needs

Phone: 703-625-4949
Email - rituadesai@yahoo.com
On the web: http://www.homesdatabase.com/ritu

There is not a specific Code of Ethics for Buyers (that I know of.) However, if both offers are accepted, the buyer could end up having to buy both of them.

What makes you jump to the conclusion that the buyer is not interested in purchasing both properties?

well they wouldnt have to perform, but i hope they left a nice EMD to split with the seller and yourself.

Paul has a good point too, unless they are being shady about it and dont want you to know.

[This message has been edited by XstudioX (edited 11-18-2004).]

Yes, buyer was being shady about it and they had told me outright that they couldn't buy both properties. I now know that buyers can negotiate on multiple properties at the same time, but you should only have one offer out at any one point in time. I'm working with an investor now and will be doing this for my client. I'm learning! Thanks for the replies.

Gail,
Just a question but do you know how to evaluate an investment property to determine if it is in fact a good investment?

Even seasoned investors do not always do a good job evaluating properties. It is important to determine what method a seller used to come to the listing price, you will find that many use the GRM but that is not the best method.

If the seller is using the property as a rental then you should always request a copy of the Schedule E for the property to better evaluate the property for your investment buyer.

Paul,

I do not know how to evaluate an investment property to determine whether it is a good investment yet, but I am learning from my clients. They are aware that this is not my strength and are teaching me. Should I take a course in this? I'd like to know more, but I'm not sure whether to take the RE Appraisal course next or what course to take. Any recommendations? I don't have plans to go for my broker's license, I just want to become really good at figuring out the value of a property and representing my buyer's property at the moment.

Is the Schedule E just for investment properties? I ask because one investor is buying single family homes that have never been rented before, so a Schedule E won't exist.

Gail,
An appraisal class is always good but I if you want to specialize in investment buyers you should take CRS 204 Creating Wealth through Residential Real Estate Investments.
The class has great info and if you don't have any rental property you will want to buy one after the course
Course Content:
• Identifying money-making opportunities
• Comparing potential investment opportunities
• Retirement planning and investing
• Calculating initial investment to rate of return

Thanks, Paul, there are some advantages to working with investment buyers (they are repeat customers), so I may just do that. There are so many courses I'd like to take as a new agent and so little time or money.

The buyer can negotiate on as many properties as he/she wants to. This is ussually unwise from a buyers standpoint, as you may end up getting stuck with both properties. However, at least in Washington State (consult you own states manuals...should be in your first lessons manuals if you kept those), the buyer may cancel the offer before the seller accepts AND communicates the acceptance to the buyer through writting (IE - A signed and faxed back Purchase and Sales Agreement). If the broker/agent is communicated to that the offer is accepted, but is told to rescind the offer prior to the communication from the broker to the buyer, then the offer is void. If the broker communicates the acceptance, and the buyer then says he doesn't want to buy as he found a better deal, the buyer is stuck with the agreement.

-Ben@Webprop

I'll second the recommendation for taking CRS 204. I'm not too thrilled with the majority of courses out there offered within a designation track (most are riddled with fluff n' filler material), but CRS 204 was one of the ones that I gambled on and actually paid & attended. An absolutely fantastic class to about investment RE. Get's down to the nitty gritty number cruching that so many of the other investment courses simply glance over in passing. The course that I took featured a lecturer that was a former IRS agent. It was fun to get an inside look at how the IRS evaluates a landlord's returns.

Ben, Thanks, I'm a new agent so I still refer to my P&P book frequently. I know that you can only have one offer out at a time, but I've since learned that the buyer can give you instructions ahead of time on let's say five properties that they are interested in and how much they are willing to bid up to in what order of priority. As the buyer's agent you can start with the first property and negotiate on their behalf and go right on down the line through all five properties if you have to, but obviously only have one offer out at any one time. In a tight inventory market this is apparently the way to do it.

Xenogenetic, I'm thinking of taking CRS 204 in the spring. Thanks.

Gail
Education is much cheaper than "Litigation" both financially and emotionally. I assume that you qualified your client and are aware of his/her financial ability. Buyer/Broker Standard Form contracts vary from location to location and should be amendmended to fit the requirements. An investor may choose to invest anywhere and perhaps leave you out of the picture, unless your agreement gives you some protection. i.e. "To negotiate the acquisition and disposition of any interest in real property, of whatever nature, with respect to price, terms and conditions as are acceptable to the undersigned principal(s) and to counsel and assist with matters incidental thereto, and to take such action as you may deem advisable or as I may instruct either orally or in writing.

2. In the course of so acting, your are hereby authorized to employ such counsel, agents, or experts as you deem advisable and I further authorize them to incur such disbursements as you deem necessary."
also specify that your remuneration is earned and due upon the execution of each and every binding agreement entered into by the principal(s) during the term of your agreement. etc. etc.
As a new agent you are in an area that can open you up to all kinds of liability. Most standard form offers are weighted in favor of the seller and as an agent for the buyer you may be asked why you did not "omit" clauses favoring the opposing party or at lease attempt to negotiate those clauses. Good Luck

One thing we need to understand, and this case highlights it nicely, is that many people are very capable in regards to carrying on their business. A conditional clause based on the success of one purchase offer, can negate others. It may not be palatable to the seller, but it's one of many ways that deal hunters find deals.