I have suspicions that I got unfairly screwed over by the seller's listing agent of a condo I was interested in buying. I am fairly new to buying real estate though (it is my first time), so let me know what you think!
(Tuesday) A few days ago a really good short sale opportunity came on the market. This condo is currently appraised to be around $300k, was bought for $400k back in 2005, and was now asking for $225k on the listing. The unique situation about the condo was that it had just recently been under a contract that had just fallen through (the interested buyer of that contract was the current renter living in the unit, but because he was called out of the country at the last minute, he could no longer close the deal on time). Anyway, the condo was thus back on the market and the condo listing indicated that the bank had already approved an offer for $210k; the listing asked for new offers to either match or exceed the approved $210k.
I immediately tried jumping on the deal and asked my agent if we could check out the place. The agent informed me that per the listing agent, the current tenant in the unit was still moving his things out, so that the lockbox would not be placed on the door until the next morning.
(Wednesday) 12pm: I went to go check the place out with my agent. At the unit, the lockbox was there but the key inside was missing. We knocked on the door and no one answered. There was no one inside the unit. We called the listing agent to ask about the key, and she said "the renter was still moving his things and wouldn't be done until later in the day, so the renter had removed the key." At this point, there were already two other interested buyers also waiting outside the condo unit trying to see the place. We quickly called the listing agent to see if there were any offers already on the table, and the listing agent said no. She said "the next offer I get will be the one I send to the seller and the bank for approval". It will be first come, first served." Knowing that this opportunity was a hot deal and not wanting to waste time, my agent and I decided to go ahead and submit an offer first and wait to see the place later when the key became available.
My agent and I finished writing the offer for the approved $210 (with 25% down and NO loan approval contingency). My agent assured me that our offer was really solid. I had strong financials and no contingencies in the offer. We called up the listing agent to see if there were any offers on the table yet, and she said no. We then told her we had our offer ready and were about to send it over. After faxing over our offer minutes later, we called the listing agent to make sure she received it. No answer. We left a message. We waited a while. No returned call. I was getting nervous, because I wanted to make sure I was the first offer. We tried calling her broker office and asking for her that way. We finally got a hold of her and asked that she review our offer. She confirmed that she had not received any other offers yet and that she would be sending our offer to the seller and bank THAT DAY after she reviewed it, since we were after all the "first" offer. My agent asked the listing agent to let us know of any concerns she or the seller might have with our offer after they had reviewed it, so that we could have a chance to modify it accordingly.
In my head, I was thinking that I was still willing to modify my terms if need be, or if faced with other competitive offers. I wasn't going to give up this condo that easily. Sure, the listing agent had said "first come first served," so theoretically, other offers shouldn't even have been in the picture, but I still was a little skeptical. It sounded almost too good to be true that the listing agent had established a "first come first served" policy, and that I had in fact secured the spot as the first offer. However, my agent reassured me that real estate agents are professionals and generally do not go against their own word. Anyway, the listing agent agreed to let us know of any concerns with the offer and said that she'd call us back after our offer had been approved by the seller and sent to the bank that very day. We waited around for a few hours, and the agent never called us back. My agent then called the listing agent. No answer. We left a message. No returned call. After a while, we called again and finally got a hold of her. She said she was "still reviewing the offer." At this point, it was already late in the afternoon, so my agent told me it didn't look like the listing agent was going to send our offer to the bank tonight like we had been told. I was a little worried and upset, but what could I do? Anyway, we waited all night to hear back from the agent. We heard nothing.
(Thursday) The next day, since we still had not heard back from the listing agent, my agent called her to make sure everything was still okay with our offer. The listing agent said yes and that our offer was solid except for the settlement date. She asked if we would be willing to move up the settlement date, and of course I said yes. The agent then informed us that there were now 8 offers on the table, but that she would still be sending only our offer to the seller and bank, like she had said before. I felt relieved to hear this. My agent asked the listing agent to call us back once the seller had ratified our contract. The listing agent agreed. My agent and I waited and waited all day, and the agent never called us back. My agent called her twice that day, and she did not answer. Something definitely did not seem right.
(Friday) The next morning my agent decided to try calling again and finally got a hold of the listing agent. The listing agent reassured my agent that nothing had changed, and that she was still going to show MY offer to the seller to get signed. Still no mentions of any concerns or issues with our offer at this time. The listing agent now says that she has to drive out from D.C to Philly to meet the seller to get the contract signed and that she would call us later in the day once the contract had been ratified by the seller. (sound familiar?) I don't understand what had been taking her so long to meet with the seller this whole time, and why she had not returned any of our calls, but anyway, I listened and waited. We also asked the listing agent if the condo key was available at the unit now, so that we could finally see it, and the listing agent replied "It should be there."
It was night time now. We went to the condo, and low and behold, the key was not there. We STILL were unable to see the condo unit. Seeing as how we had still not heard back from the listing agent like we were supposed to, my agent then called the listing agent to inquire about the key along with the status of our offer. No answer. We waited around all night. Nothing.
(Saturday) So this whole ordeal with the offer started on Wednesday, and it is now Saturday. Keep in mind that this entire time, I have been led to believe that my offer was fine and that it was the only offer in the process of being ratified by the seller/approved by the bank. We had told the listing agent to notify us if there were any concerns with our offer, and we had received no calls or any indications of concerns. My agent calls the listing agent again, and the agent picks up this time. The listing agent informs my agent now that she has sent ANOTHER offer to the seller and bank. Great. Was the listing agent ever going to call to tell us this news, had we not called? Given her behavior up until this point- doubtful. Anyway, this OTHER offer supposedly included an "earnest money deposit" of the full $210k offer amount. Well clearly, this offer, if real, could not have been beat and clearly, this offer would have easily been chosen as the one to be sent to the seller and the bank, if compared against mine. No questions there. Who has $210k in cash to spare as a risky upfront "earnest money deposit?" Mind you, to put down, without having even seen the condo? Not many. And so I got screwed.
In any case, I first want to say that I am a little skeptical that there ever was even this so-called other offer on the table. If such a great offer really were on the table, then why wouldn't the listing agent have informed me of it when she first knew about it, instead of dodging our calls, continuing to lead us on, and not notifying us proactively? She could have at least notified me of the offer to give me an opportunity to either MATCH it or to be dropped from consideration, BEFORE she went ahead and submitted that other offer to the seller/bank for approval. Second, even if this offer were in fact better, was it right of the listing agent to have told us that she was going to send ahead the first offer received on a "first come first served" basis? Why would she say that if she clearly was not planning on following through? I think it shady/unethical as a professional real estate agent to say one thing and do another.
So I think two things could have happened here to explain the above:
1) the listing agent realized how good of a deal this condo was and was struggling to quickly find one of her own friends/family to get in on the deal but also couldn't let the seller know that she was dragging, so she acted like she was just accepting and reviewing all offers while she was really waiting to hear back from one of her own people before notifying the seller.
I can see this as being the case, because the listing agent could have just misled the seller into thinking that she hadn't received any good offers yet and was still waiting for a "good" one. In the meanwhile, she would tell my agent and I that our offer looked fine, and use us only as a backup offer in case no one on her end could come through in time. All the while, the seller would have no clue what was going on. Later, when the listing agent's family or friend's offer came through, she would use the excuse of a "better" offer coming in as for why MY offer was not sent through. In reality, that other offer was probably no better than my offer. This theory would make sense for why the key was never made available at the condo unit also. If the seller really was located far away in "Philly" like the listing agent said, then he would have been too far removed from the situation to know that the key was never even made available to the public at all. The agent herself could very well have removed the key from the lockbox so that no one could view the unit, expecting that no one would make an offer without seeing the unit first. This would explain why she would have said "first come, first served": she thought that her friend/family's offer would have been THE first offer. This would also be why she did not return our calls after receiving our offer initially. She had realized that her "first come first served" policy had placed her in a surprising bind.
OR
2) the listing agent was just an incompetent newbie who couldn't hold to her morals and didn't know better not to promise "first come, first served" when she knew that this would not be the case if a better offer later came long. This theory is questionable however, because wouldn't a short-sale real estate agent be an agent who has had a good amount of experience already?
Anyway, I am just really upset that the agent was not upfront with me, misled me, wasted my time, did not return calls, did not initiate calls, and did not seem to make any effort to have the unit available for showing to the public. All the while, there is a good chance that this agent has gotten away with locking down this amazing deal by submitting an offer that only matches my offer at best and by misleading the seller into accepting it as the "best" offer. Do you think I am being overly cynical in my theories or is there some merit in what I am saying? Is there anything I can do to make myself feel better? I appreciate any comments or advice !
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SUMMARY: I got really excited and emotionally involved about a house that looked like a great buy. I made an offer and initially it looked like the house would be mine. But then, something happened and the seller accepted another offere.
LESSONS LEARNED: 1) Don't get too emotional about a property you haven't bought. 2) Don't trust anything the listing broker says that you can't independently verify. 3) Realize that until a contract is signed you have no claim to the house whatsoever. 4) Realize that until the closing occurs, anything could happen. 5) Don't sweat a lost deal...there's always another house, deal or opportunity out there.
Message edited by: Kanosh on 2009-11-02 06:18:31 CST
SIS is right OP. The agent could have acted for either reason you hypothosize, or a thousand others. Yes, it would have been classier had the agent better kept you abreast of the situation. But there's no evidence that the listing agent violated any obligations here.
The main lesson is to not get emotionally involved in RE offers. Other opportunities will come along, believe me.
Since you are new , get used to hearing all kinds of BS such as
"we have another offer coming in, would you like to increase yours?" (when in reality no other offer does come in) "this is a multiple bidder situation, go back and give us your highest and best" (gets someone to bid against themselves) "seller is out of town" (seller is just waiting for better offers) etc etc etc
Most likely #1. That's happening like crazy out here in SoCal. Never trust a seller's agent; some are there just to be on the "inside" so they can get all the deals. Think Best Buy employees and cheap laptops.
Message edited by: tmolloy on 2009-11-01 17:03:28 CST
Sounds like they were setting up a deal for someone else, but they led you along to not arouse suspicion. And when you didn't give up, suddenly there was a cash offer on the table that there was no way you could beat.
I'd write the letter (to the supervisor broker) and I'd let them know you will write to whatever licensing board there is, just for kicks, as long as they have a monopoly, etc. Remember that listing agents, and maybe all agents, have a fiduciary obligation to the listing agent not to you, the buyer. Here is where the person may have screwed up, suppose you were willing to pay more, then they cost their client money, who knows though, maybe seller doesn't like money.
You should have been way skeptical when the listing agent said "first come, first served" and asked for more clarification instead of making assumptions. Listing agents must present ANY and ALL offers to the seller per the Realtor Code of Ethics. Seller can choose whichever offer they desire to work with. It doesn't matter in the least whose offer was received 1st or 12th. Yours might have been the first one presented, but that doesn't mean they won't look at and consider the other 11 offers. It would be insane for any seller to not look at all the offers. This is something your agent should know and should have explained to you.
Even in your own quotes about what she told you originally she said "the next offer I get will be the one I send to the seller and the bank for approval". It will be first come, first served."
While I wouldn't have worded it quite the way she did, she didn't lie. She didn't say she wouldn't send subsequent offers as well. "First served" could mean a lot of things, in this case I believe she meant "first looked at". One problem I see here is that your agent gave her way too much time to wait and let other offers come in. You should have given an expiration time/date and made sure your agent made it very clear to the listing agent that your offer would be no good after that point. 24 hours is more than enough time to get a contract presented and responded to by the seller.
The listing agent did nothing wrong, other than maybe not explaining to you fully what "first come, first served" really meant. She probably thought you knew or that your agent would at least explain the process. Don't call her broker, you'll look like an idiot.
You, however made several mistakes that you can, and hopefully will, learn from:
1) Not even seeing a place yet going crazy over it. 2) Not putting an expiration date in your contract to limit potential of other offers coming in 3) Getting too attached to a potential home before it's yours 4) Dwelling on and bitching about losing a deal instead of moving on
you can't always get what you want... you can't always get what you want... you can't always get what you want... but if you try sometimes you might find you get what you need
It has been a few days over a month in my first home and we tried on a short sale when we started looking. Not worth the delay/hassle. We ended up finding a house we loved at price that was good for us.
Couple thoughts: 1) Don't go crazy over a house and make bad decisions. At the end of the day, it's still a business transaction. 2) Definitely don't submit an offer before doing a walkthrough, or if you want to go that route put in an inspection contingency. 3) Piggybacking on 2, get an inspection, $400 well spent. 4) It's still a buyers' market - if the seller wants you to do something you don't want to do, they can either pound sand and continue with the transaction or wait until they find another buyer with solid financials.
Don't get emotionally invested in any property. Move on and find something else. Hopefully you won't need therapy after every bid you put in on a house.
christoj879 said:It has been a few days over a month in my first home and we tried on a short sale when we started looking. Not worth the delay/hassle. We ended up finding a house we loved at price that was good for us.
Couple thoughts: 1) Don't go crazy over a house and make bad decisions. At the end of the day, it's still a business transaction. 2) Definitely don't submit an offer before doing a walkthrough, or if you want to go that route put in an inspection contingency. 3) Piggybacking on 2, get an inspection, $400 well spent. 4) It's still a buyers' market - if the seller wants you to do something you don't want to do, they can either pound sand and continue with the transaction or wait until they find another buyer with solid financials.
Other thoughts: The agent did nothing wrong, but did end up wasting a lot of your time. This is typical in a short sale situation. You were probably led on by the fact that you thought she wouldn't present other offers, but that would have been unfair to the other people making offers. You can't be mad at someone for doing the fair thing and feeling you were unfairly taken advantage of.
Verbally accepted offers aren't worth the paper the written on. And in this case you didn't even get a verbally accepted offer so you didn't even make it that far. I've had a couple of situations where the offer was verbally accepted and at the last minute a better offer came in and I lost out.
As for the buyer's market, all real estate is local so market conditions differ depending on location. In terms of a short sale, it's clearly a seller's market. When there's 12 other offers, it's a seller's market. When there's no offers or yours is the only one, then you can say it's a buyer's market. There's still a mad scramble for foreclosures and short sales in the markets that I'm in. Other areas may have foreclosures and short sales that sit there for a long while.
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