Author Topic: fishy business with sudden bidding war  (Read 4066 times)

Case

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fishy business with sudden bidding war
« on: August 10, 2018, 03:18:51 PM »
So, my wife and I are on the market for a house and started working with an agent.  He has been pretty good so far; very responsive, seems super hard working, and we don't yet believe he is doing anything wrong.

Coincidentally, we found a house like whose seller's agent belongs to the same office/brokerage.  The house has been on the market for ~1 month, so we figure there aren't other offers on the table.  Well, within a couple days of us placing an offer on the house, suddenly there is another offer on the table and we are in a bidding war.

Well, these things happen right?  That's what we figured, but then our agent told us that the other agent represents both the seller as well as the 3rd party (other potential buyer).  So basically, once we placed an offer, the other agent convinced one of his clients to place an offer in order to trigger a bidding war.  There is a conflict of interest obviously.  Prior to this happening, the guy's agent was insisting that our offer was below the market value of the house (it wasn't, and statistics and comps from both agents support this) and that we should raise our offer... as we started to negotiate back and forth, this happened.

My question is, did the seller's agent do anything questionable?  Fully legal?
It seems like a possibility that the 3rd party will be told what our prior offers were, and will know how high they have to go.
It looks like we are mostly stuck with a shitty situation, but since this brokerage is used by my company's relocation department, I could be vindictive and report to my company that this guy took some questionable actions.
« Last Edit: August 10, 2018, 04:09:44 PM by Case »

Freedom2016

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Re: fishy business with sudden bidding war
« Reply #1 on: August 10, 2018, 04:37:24 PM »
So, my wife and I are on the market for a house and started working with an agent.  He has been pretty good so far; very responsive, seems super hard working, and we don't yet believe he is doing anything wrong.

Coincidentally, we found a house like whose seller's agent belongs to the same office/brokerage.  The house has been on the market for ~1 month, so we figure there aren't other offers on the table.  Well, within a couple days of us placing an offer on the house, suddenly there is another offer on the table and we are in a bidding war.

Well, these things happen right?  That's what we figured, but then our agent told us that the other agent represents both the seller as well as the 3rd party (other potential buyer). So basically, once we placed an offer, the other agent convinced one of his clients to place an offer in order to trigger a bidding war. There is a conflict of interest obviously.  Prior to this happening, the guy's agent was insisting that our offer was below the market value of the house (it wasn't, and statistics and comps from both agents support this) and that we should raise our offer... as we started to negotiate back and forth, this happened.

My question is, did the seller's agent do anything questionable?  Fully legal?
It seems like a possibility that the 3rd party will be told what our prior offers were, and will know how high they have to go.
It looks like we are mostly stuck with a shitty situation, but since this brokerage is used by my company's relocation department, I could be vindictive and report to my company that this guy took some questionable actions.

You have evidence of the bolded? If not, seems like a leap, IMO.

I'm not an RE agent but I am pretty sure that it's a yuuuuuge professional breach to disclose details of an offer to another buyer.

Hopefully someone more knowledgeable will weigh in.

robartsd

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Re: fishy business with sudden bidding war
« Reply #2 on: August 10, 2018, 04:45:34 PM »
You can always call the bluff and stick with your offer. If the other offer is genuine you might lose this house; if not, you don't get milked for more money.

sol

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Re: fishy business with sudden bidding war
« Reply #3 on: August 10, 2018, 05:32:52 PM »
I've seen it happen before, so I'm assuming it's legal.

It's also clearly unethical, but real estate agents aren't exactly known for being paragons of virtue.  They make money by lying to you, after all.  Remember that every party to a home sale makes money, except the buyer, because it's the buyer's money that is paying everyone else.

I'd walk, in your situation.  You have no way to be treated fairly in this negotiation, and all of the incentives are against you. 

Case

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Re: fishy business with sudden bidding war
« Reply #4 on: August 10, 2018, 05:33:45 PM »
So, my wife and I are on the market for a house and started working with an agent.  He has been pretty good so far; very responsive, seems super hard working, and we don't yet believe he is doing anything wrong.

Coincidentally, we found a house like whose seller's agent belongs to the same office/brokerage.  The house has been on the market for ~1 month, so we figure there aren't other offers on the table.  Well, within a couple days of us placing an offer on the house, suddenly there is another offer on the table and we are in a bidding war.

Well, these things happen right?  That's what we figured, but then our agent told us that the other agent represents both the seller as well as the 3rd party (other potential buyer). So basically, once we placed an offer, the other agent convinced one of his clients to place an offer in order to trigger a bidding war. There is a conflict of interest obviously.  Prior to this happening, the guy's agent was insisting that our offer was below the market value of the house (it wasn't, and statistics and comps from both agents support this) and that we should raise our offer... as we started to negotiate back and forth, this happened.

My question is, did the seller's agent do anything questionable?  Fully legal?
It seems like a possibility that the 3rd party will be told what our prior offers were, and will know how high they have to go.
It looks like we are mostly stuck with a shitty situation, but since this brokerage is used by my company's relocation department, I could be vindictive and report to my company that this guy took some questionable actions.

You have evidence of the bolded? If not, seems like a leap, IMO.

I'm not an RE agent but I am pretty sure that it's a yuuuuuge professional breach to disclose details of an offer to another buyer.

Hopefully someone more knowledgeable will weigh in.

Our agent said that the other agent told him the 3rd party was luke warm, and then passed on the news to them that there was anothr offer.  Proving anything obviously is hard.

Tester

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Re: fishy business with sudden bidding war
« Reply #5 on: August 10, 2018, 06:35:32 PM »
If you want to force them to remove the bid I don't know if you can.
If you really need that house you might need to bid.
If you don't just walk away and find another agent too.
Thise are the only options in my eyes.

Case

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Re: fishy business with sudden bidding war
« Reply #6 on: August 10, 2018, 06:41:34 PM »
I've seen it happen before, so I'm assuming it's legal.

It's also clearly unethical, but real estate agents aren't exactly known for being paragons of virtue.  They make money by lying to you, after all.  Remember that every party to a home sale makes money, except the buyer, because it's the buyer's money that is paying everyone else.

I'd walk, in your situation.  You have no way to be treated fairly in this negotiation, and all of the incentives are against you.

We considered walking, but we really like the place.  Therefore, we decided to stick to our original plan on max offer and to only arrive at it via escalation clause.

Agreee that we wont be treated fairly!  Wont be surprised if the other parties max offer happens to be just underneath our max offer.

ShoulderThingThatGoesUp

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Re: fishy business with sudden bidding war
« Reply #7 on: August 12, 2018, 04:55:46 AM »
After having a house on the market for four months, we got two bids at the same price on the same day. Your situation still smells bad, though.

frugaliknowit

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Re: fishy business with sudden bidding war
« Reply #8 on: August 12, 2018, 05:29:30 AM »
Former realtor (another state, from about 1987-1993) here.  If laws are the same (believe they still are), and the same in your state, no, I don't see anything wrong, unless the listing agent told "his/her buyer (the buyer you are competing with)" what your offer was (that'd be illegal and not in the seller's interest).  Even this illegality can be "danced around" by the other buyer saying something like "what if we offer X?  High enough?", etc.  "What would YOU offer, Mr./Mrs. Realtor?"

From your description, though, had it been me as the buyer:  When I signed the offer, I would have been aggressive with my seller agent in getting the offer presented and getting a quick answer (yay, nay, or counter).  If they take more than a day or so, I'd pull it or at least threaten to do so.  It sounds like the listing agent sat on it for a few days without responding to your offer.  This is not in the seller's interest.  The agent can "dance around the law" by claiming "the seller is out of town, "the seller is busy, blah, blah..."

Also keep in mind that until attorney's and inspection contingencies are no longer in place, ANYTHING CAN HAPPEN (the seller can keep showing the house and entertain other offers).

So no, I don't think you have a legitimate gripe (unless the listing agent told "their buyer" what your offer is), except that a slow response by the listing agent and your agent's not being aggressive in getting an answer within a few days is kind of sleazy.
« Last Edit: August 12, 2018, 05:42:05 AM by frugaliknowit »

Case

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Re: fishy business with sudden bidding war
« Reply #9 on: August 12, 2018, 10:51:32 AM »
For those interested in the outcome....

We lost the bidding war.  We gave it some though and decide what our line-to-pass was, and made that our upper limit via an escalation clause.  Other realtor claims the competing offer was very similar, but they went with theirs.  Of course, this is usuallyo what realtors say.  We have no idea where their max was, and if they used an escalation clause as well, we never will.  The sellerís agent now gets the full double sale.

Weíre bummed to have lost a place we really liked, but Iím also super proud of wife for sticking to her guns and not going for a super high bid just to make this over.  Having a stache, we could have easily just bought the damn house, but it would have likely meant losing thousands of dollars when we sell in a few years.  Then again, $5-10k is not the end of the world to us... i guess everything is a grey area.

Anyways, thank you all for the comments.  Back to the drawing board for us.

Case

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Re: fishy business with sudden bidding war
« Reply #10 on: August 12, 2018, 11:00:27 AM »
Former realtor (another state, from about 1987-1993) here.  If laws are the same (believe they still are), and the same in your state, no, I don't see anything wrong, unless the listing agent told "his/her buyer (the buyer you are competing with)" what your offer was (that'd be illegal and not in the seller's interest).  Even this illegality can be "danced around" by the other buyer saying something like "what if we offer X?  High enough?", etc.  "What would YOU offer, Mr./Mrs. Realtor?"

From your description, though, had it been me as the buyer:  When I signed the offer, I would have been aggressive with my seller agent in getting the offer presented and getting a quick answer (yay, nay, or counter).  If they take more than a day or so, I'd pull it or at least threaten to do so.  It sounds like the listing agent sat on it for a few days without responding to your offer.  This is not in the seller's interest.  The agent can "dance around the law" by claiming "the seller is out of town, "the seller is busy, blah, blah..."

Also keep in mind that until attorney's and inspection contingencies are no longer in place, ANYTHING CAN HAPPEN (the seller can keep showing the house and entertain other offers).

So no, I don't think you have a legitimate gripe (unless the listing agent told "their buyer" what your offer is), except that a slow response by the listing agent and your agent's not being aggressive in getting an answer within a few days is kind of sleazy.

Thanks for your response.  I did use a similar tactic as you described.  In fact, i completely went around the sellerís agent and had my offer submitted by the office manager.  This was all to protect them from taking advantage of us.

Thanks for explaining also that legally they did nothing wrong.  This is what i suspected.

Iíll never know for certain whether the sellerís agent made it a win-win-win for the seller and other buyer (screwing me and his coworker realtor), or if he made it win-win for himself and the seller, but not the other buyer who paid more than he might have had i not been in the picture.  Iíll never know for certain if the other agent did anything illegal behind the scenes... itís risky but not uncommon.

 All i can say for certain is that there was a conflict of interest present, which at the very least put me at a disadvantage, and put the seller and sellerís agent at an advantage.  Im not saying thatís illegal, and the ethics depend on unknowns.
« Last Edit: August 12, 2018, 01:45:18 PM by Case »

Finallyunderstand

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Re: fishy business with sudden bidding war
« Reply #11 on: August 12, 2018, 01:56:29 PM »
Former realtor (another state, from about 1987-1993) here.  If laws are the same (believe they still are), and the same in your state, no, I don't see anything wrong, unless the listing agent told "his/her buyer (the buyer you are competing with)" what your offer was (that'd be illegal and not in the seller's interest).  Even this illegality can be "danced around" by the other buyer saying something like "what if we offer X?  High enough?", etc.  "What would YOU offer, Mr./Mrs. Realtor?"

From your description, though, had it been me as the buyer:  When I signed the offer, I would have been aggressive with my seller agent in getting the offer presented and getting a quick answer (yay, nay, or counter).  If they take more than a day or so, I'd pull it or at least threaten to do so.  It sounds like the listing agent sat on it for a few days without responding to your offer.  This is not in the seller's interest.  The agent can "dance around the law" by claiming "the seller is out of town, "the seller is busy, blah, blah..."

Also keep in mind that until attorney's and inspection contingencies are no longer in place, ANYTHING CAN HAPPEN (the seller can keep showing the house and entertain other offers).

So no, I don't think you have a legitimate gripe (unless the listing agent told "their buyer" what your offer is), except that a slow response by the listing agent and your agent's not being aggressive in getting an answer within a few days is kind of sleazy.

Thanks for your response.  I did use a similar tactic as you described.  In fact, i completely went around the sellerís agent and had my offer submitted by the office manager.  This was all to protect them from taking advantage of us.

Thanks for explaining also that legally they did nothing wrong.  This is what i suspected.

Iíll never know for certain whether the sellerís agent made it a win-win-win for the seller and other buyer (screwing me and his coworker realtor), or if he made it win-win for himself and the seller, but not the other buyer who paid more than he might have had i not been in the picture.  Iíll never know for certain if the other agent did anything illegal behind the scenes... itís risky but not uncommon.

 All i can say for certain is that there was a conflict of interest present, which at the very least put me at a disadvantage, and put the seller and sellerís agent at an advantage.  Im not saying thatís illegal, and the ethics depend on unknowns.

I'm a realtor so I'm sure this will be taken with a grain of salt but...  There is not a conflict of interest.  The listing agent did exactly what his sellers hired him to do and exactly what his buyers hired him to do.  He definitely had the advantage but did exactly what is required.  His sellers wanted him to sell their house for as much as they can get and his buyers want him to find him a house they like.  When you came along and submitted an offer you simply helped his buyers "get off the pot" and make a decision.  Ultimately his sellers are happy for the sale price and his buyers are happy for the home they got.  You lost a bidding war and it sucks that you were at a disadvantage but that's all it was.

I have had many similar situations and my sellers typically directly tell me to tell my buyers what they need to offer to get the house over the other agent's buyers. It's then up to my buyers to say yay or nay.  Sometimes they pass and other times they choose to do it. 

I've seen it happen before, so I'm assuming it's legal.

It's also clearly unethical, but real estate agents aren't exactly known for being paragons of virtue.  They make money by lying to you, after all.  Remember that every party to a home sale makes money, except the buyer, because it's the buyer's money that is paying everyone else.

I'd walk, in your situation.  You have no way to be treated fairly in this negotiation, and all of the incentives are against you. 

That's casting an extremely wide net referring to realtors as making money by lying.  The buyer was treated as fairly as possible.  His agent didn't have a direct connection to the seller so they were at a disadvantage but not treated unethically.

Case

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Re: fishy business with sudden bidding war
« Reply #12 on: August 12, 2018, 03:28:39 PM »
Former realtor (another state, from about 1987-1993) here.  If laws are the same (believe they still are), and the same in your state, no, I don't see anything wrong, unless the listing agent told "his/her buyer (the buyer you are competing with)" what your offer was (that'd be illegal and not in the seller's interest).  Even this illegality can be "danced around" by the other buyer saying something like "what if we offer X?  High enough?", etc.  "What would YOU offer, Mr./Mrs. Realtor?"

From your description, though, had it been me as the buyer:  When I signed the offer, I would have been aggressive with my seller agent in getting the offer presented and getting a quick answer (yay, nay, or counter).  If they take more than a day or so, I'd pull it or at least threaten to do so.  It sounds like the listing agent sat on it for a few days without responding to your offer.  This is not in the seller's interest.  The agent can "dance around the law" by claiming "the seller is out of town, "the seller is busy, blah, blah..."

Also keep in mind that until attorney's and inspection contingencies are no longer in place, ANYTHING CAN HAPPEN (the seller can keep showing the house and entertain other offers).

So no, I don't think you have a legitimate gripe (unless the listing agent told "their buyer" what your offer is), except that a slow response by the listing agent and your agent's not being aggressive in getting an answer within a few days is kind of sleazy.

Thanks for your response.  I did use a similar tactic as you described.  In fact, i completely went around the sellerís agent and had my offer submitted by the office manager.  This was all to protect them from taking advantage of us.

Thanks for explaining also that legally they did nothing wrong.  This is what i suspected.

Iíll never know for certain whether the sellerís agent made it a win-win-win for the seller and other buyer (screwing me and his coworker realtor), or if he made it win-win for himself and the seller, but not the other buyer who paid more than he might have had i not been in the picture.  Iíll never know for certain if the other agent did anything illegal behind the scenes... itís risky but not uncommon.

 All i can say for certain is that there was a conflict of interest present, which at the very least put me at a disadvantage, and put the seller and sellerís agent at an advantage.  Im not saying thatís illegal, and the ethics depend on unknowns.

I'm a realtor so I'm sure this will be taken with a grain of salt but...  There is not a conflict of interest.  The listing agent did exactly what his sellers hired him to do and exactly what his buyers hired him to do.  He definitely had the advantage but did exactly what is required.  His sellers wanted him to sell their house for as much as they can get and his buyers want him to find him a house they like.  When you came along and submitted an offer you simply helped his buyers "get off the pot" and make a decision.  Ultimately his sellers are happy for the sale price and his buyers are happy for the home they got.  You lost a bidding war and it sucks that you were at a disadvantage but that's all it was.

I have had many similar situations and my sellers typically directly tell me to tell my buyers what they need to offer to get the house over the other agent's buyers. It's then up to my buyers to say yay or nay.  Sometimes they pass and other times they choose to do it. 

I've seen it happen before, so I'm assuming it's legal.

It's also clearly unethical, but real estate agents aren't exactly known for being paragons of virtue.  They make money by lying to you, after all.  Remember that every party to a home sale makes money, except the buyer, because it's the buyer's money that is paying everyone else.

I'd walk, in your situation.  You have no way to be treated fairly in this negotiation, and all of the incentives are against you. 

That's casting an extremely wide net referring to realtors as making money by lying.  The buyer was treated as fairly as possible.  His agent didn't have a direct connection to the seller so they were at a disadvantage but not treated unethically.

In reading your response, i would say i partially disagree.  The main disagreement is that the realtor is incentivized to make the double deal, this is why its a conflict of interest. This is why all parties in my state were required to sign forms consenting to the double agent deals.

I would also point out that youíre a realtor, and missed a pretty obvious conflict of interest. 

 But other than that, what you said sounds reasonable.
« Last Edit: August 13, 2018, 06:13:51 AM by Case »

sol

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Re: fishy business with sudden bidding war
« Reply #13 on: August 12, 2018, 03:36:51 PM »
The agent got paid more to reduce the price of the house, because he got double commission.   His incentive was to conceal or delay the other offer, or distort it's value, and encourage the seller to take the (potentially lower) in-house offer.  The whole situation is ethically compromised.

I've never dealt with a real estate agent I didn't think was crooked.  The whole industry preys on market inefficiency and information asymmetry.  Having the same agent on both sides of a deal should be illegal.
« Last Edit: August 12, 2018, 03:40:05 PM by sol »

Case

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Re: fishy business with sudden bidding war
« Reply #14 on: August 12, 2018, 03:37:58 PM »
Former realtor (another state, from about 1987-1993) here.  If laws are the same (believe they still are), and the same in your state, no, I don't see anything wrong, unless the listing agent told "his/her buyer (the buyer you are competing with)" what your offer was (that'd be illegal and not in the seller's interest).  Even this illegality can be "danced around" by the other buyer saying something like "what if we offer X?  High enough?", etc.  "What would YOU offer, Mr./Mrs. Realtor?"

From your description, though, had it been me as the buyer:  When I signed the offer, I would have been aggressive with my seller agent in getting the offer presented and getting a quick answer (yay, nay, or counter).  If they take more than a day or so, I'd pull it or at least threaten to do so.  It sounds like the listing agent sat on it for a few days without responding to your offer.  This is not in the seller's interest.  The agent can "dance around the law" by claiming "the seller is out of town, "the seller is busy, blah, blah..."

Also keep in mind that until attorney's and inspection contingencies are no longer in place, ANYTHING CAN HAPPEN (the seller can keep showing the house and entertain other offers).

So no, I don't think you have a legitimate gripe (unless the listing agent told "their buyer" what your offer is), except that a slow response by the listing agent and your agent's not being aggressive in getting an answer within a few days is kind of sleazy.

Thanks for your response.  I did use a similar tactic as you described.  In fact, i completely went around the sellerís agent and had my offer submitted by the office manager.  This was all to protect them from taking advantage of us.

Thanks for explaining also that legally they did nothing wrong.  This is what i suspected.

Iíll never know for certain whether the sellerís agent made it a win-win-win for the seller and other buyer (screwing me and his coworker realtor), or if he made it win-win for himself and the seller, but not the other buyer who paid more than he might have had i not been in the picture.  Iíll never know for certain if the other agent did anything illegal behind the scenes... itís risky but not uncommon.

 All i can say for certain is that there was a conflict of interest present, which at the very least put me at a disadvantage, and put the seller and sellerís agent at an advantage.  Im not saying thatís illegal, and the ethics depend on unknowns.

I'm a realtor so I'm sure this will be taken with a grain of salt but...  There is not a conflict of interest.  The listing agent did exactly what his sellers hired him to do and exactly what his buyers hired him to do.  He definitely had the advantage but did exactly what is required.  His sellers wanted him to sell their house for as much as they can get and his buyers want him to find him a house they like.  When you came along and submitted an offer you simply helped his buyers "get off the pot" and make a decision.  Ultimately his sellers are happy for the sale price and his buyers are happy for the home they got.  You lost a bidding war and it sucks that you were at a disadvantage but that's all it was.

I have had many similar situations and my sellers typically directly tell me to tell my buyers what they need to offer to get the house over the other agent's buyers. It's then up to my buyers to say yay or nay.  Sometimes they pass and other times they choose to do it. 

I've seen it happen before, so I'm assuming it's legal.

It's also clearly unethical, but real estate agents aren't exactly known for being paragons of virtue.  They make money by lying to you, after all.  Remember that every party to a home sale makes money, except the buyer, because it's the buyer's money that is paying everyone else.

I'd walk, in your situation.  You have no way to be treated fairly in this negotiation, and all of the incentives are against you. 

That's casting an extremely wide net referring to realtors as making money by lying.  The buyer was treated as fairly as possible.  His agent didn't have a direct connection to the seller so they were at a disadvantage but not treated unethically.

In regards to realtors making money by lying....
Its all a grey area.  I certainly dont think all realtors have questionable ethics, but i would challenge you to find many people that have had only positive ethical interactions with realtors.  My experience with real eatate agents has been ~50/50 (half have been scum bags, the other were good people).  And yes, realtors have a reputation for being this way.  Not all of them, but enough that it gets noticed.

I dont know if its that people of loose ethics are attracted to the profession (my guess is that partially yes), but when large stakes of money are on the table, its easy for ethics and human nature to be tested.  Throw in the incentives for agents to make many sales quickly, and it becomes obvious why the current system is messy.


Finallyunderstand

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Re: fishy business with sudden bidding war
« Reply #15 on: August 13, 2018, 11:32:12 AM »
Former realtor (another state, from about 1987-1993) here.  If laws are the same (believe they still are), and the same in your state, no, I don't see anything wrong, unless the listing agent told "his/her buyer (the buyer you are competing with)" what your offer was (that'd be illegal and not in the seller's interest).  Even this illegality can be "danced around" by the other buyer saying something like "what if we offer X?  High enough?", etc.  "What would YOU offer, Mr./Mrs. Realtor?"

From your description, though, had it been me as the buyer:  When I signed the offer, I would have been aggressive with my seller agent in getting the offer presented and getting a quick answer (yay, nay, or counter).  If they take more than a day or so, I'd pull it or at least threaten to do so.  It sounds like the listing agent sat on it for a few days without responding to your offer.  This is not in the seller's interest.  The agent can "dance around the law" by claiming "the seller is out of town, "the seller is busy, blah, blah..."

Also keep in mind that until attorney's and inspection contingencies are no longer in place, ANYTHING CAN HAPPEN (the seller can keep showing the house and entertain other offers).

So no, I don't think you have a legitimate gripe (unless the listing agent told "their buyer" what your offer is), except that a slow response by the listing agent and your agent's not being aggressive in getting an answer within a few days is kind of sleazy.

Thanks for your response.  I did use a similar tactic as you described.  In fact, i completely went around the sellerís agent and had my offer submitted by the office manager.  This was all to protect them from taking advantage of us.

Thanks for explaining also that legally they did nothing wrong.  This is what i suspected.

Iíll never know for certain whether the sellerís agent made it a win-win-win for the seller and other buyer (screwing me and his coworker realtor), or if he made it win-win for himself and the seller, but not the other buyer who paid more than he might have had i not been in the picture.  Iíll never know for certain if the other agent did anything illegal behind the scenes... itís risky but not uncommon.

 All i can say for certain is that there was a conflict of interest present, which at the very least put me at a disadvantage, and put the seller and sellerís agent at an advantage.  Im not saying thatís illegal, and the ethics depend on unknowns.

I'm a realtor so I'm sure this will be taken with a grain of salt but...  There is not a conflict of interest.  The listing agent did exactly what his sellers hired him to do and exactly what his buyers hired him to do.  He definitely had the advantage but did exactly what is required.  His sellers wanted him to sell their house for as much as they can get and his buyers want him to find him a house they like.  When you came along and submitted an offer you simply helped his buyers "get off the pot" and make a decision.  Ultimately his sellers are happy for the sale price and his buyers are happy for the home they got.  You lost a bidding war and it sucks that you were at a disadvantage but that's all it was.

I have had many similar situations and my sellers typically directly tell me to tell my buyers what they need to offer to get the house over the other agent's buyers. It's then up to my buyers to say yay or nay.  Sometimes they pass and other times they choose to do it. 

I've seen it happen before, so I'm assuming it's legal.

It's also clearly unethical, but real estate agents aren't exactly known for being paragons of virtue.  They make money by lying to you, after all.  Remember that every party to a home sale makes money, except the buyer, because it's the buyer's money that is paying everyone else.

I'd walk, in your situation.  You have no way to be treated fairly in this negotiation, and all of the incentives are against you. 

That's casting an extremely wide net referring to realtors as making money by lying.  The buyer was treated as fairly as possible.  His agent didn't have a direct connection to the seller so they were at a disadvantage but not treated unethically.

In reading your response, i would say i partially disagree.  The main disagreement is that the realtor is incentivized to make the double deal, this is why its a conflict of interest. This is why all parties in my state were required to sign forms consenting to the double agent deals.

I would also point out that youíre a realtor, and missed a pretty obvious conflict of interest. 

 But other than that, what you said sounds reasonable.

In the way it was described it seems like everyone got a chance at the purchase.  I didn't miss a conflict of interest.  All parties were aware of the situation.  The realtor having incentive to get both sides of the deal can work in the best interest of both the seller and the buyer.  Maybe the realtor cut his commission to get the sides close enough to give a better net price to the seller with a lower offer (if he did he would have legally been required to tell your agent) . The listing agent worked for his seller and buyer to the best of his ability in the given situation.  He didn't owe you or your agent anything in the situation outside of legally being required to present your offer.  Again, I'm agreeing that it royally sucks to be on the losing side of a purchase and also a bidding war but I didn't miss a conflict of interest.

I myself as a buyer have missed out on a purchase in a multiple offer situation just about 6 months ago on an investment property.  The listing agent brought the buyer.  Did she have an advantage?  100% she did.  Was I upset?  Absolutely, but only because I missed a great deal.  I never once thought she did anything unethical and I still have a great professional relationship with that agent.  She had the open line of communication to the seller and I did not.   I had a cash offer with no inspections and 7 day close while the other buyer was financing with inspections and a 30 day close and I didn't win.  Go figure. 

Prairie Stash

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Re: fishy business with sudden bidding war
« Reply #16 on: August 13, 2018, 12:08:45 PM »
Did you find a new realtor? Vote with your wallet and tell your realtor, who may be innocent, that you won't accept these shenanigans in the future. Make it clear to them, you walked because their partner did something that you found distasteful.

Everything may be legal; it does not mean you have to like it and endorse it. As others pointed out, your realtor could have acted faster. Or put in a nondislosure clause, a requirement the offer be submitted without notifying other buyers. In other words, your realtor screwed up and let this happen or they didn't screw up and were willing participants. Either way, move on from incompetent people.

Since both realtors worked for the same office, I see the conflict of interest. They put the interests of the firm over the interests of all the clients. Do you personally enjoy working with people who may collude gainst you, even if the law allows?

Case

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Re: fishy business with sudden bidding war
« Reply #17 on: August 13, 2018, 12:22:03 PM »
Former realtor (another state, from about 1987-1993) here.  If laws are the same (believe they still are), and the same in your state, no, I don't see anything wrong, unless the listing agent told "his/her buyer (the buyer you are competing with)" what your offer was (that'd be illegal and not in the seller's interest).  Even this illegality can be "danced around" by the other buyer saying something like "what if we offer X?  High enough?", etc.  "What would YOU offer, Mr./Mrs. Realtor?"

From your description, though, had it been me as the buyer:  When I signed the offer, I would have been aggressive with my seller agent in getting the offer presented and getting a quick answer (yay, nay, or counter).  If they take more than a day or so, I'd pull it or at least threaten to do so.  It sounds like the listing agent sat on it for a few days without responding to your offer.  This is not in the seller's interest.  The agent can "dance around the law" by claiming "the seller is out of town, "the seller is busy, blah, blah..."

Also keep in mind that until attorney's and inspection contingencies are no longer in place, ANYTHING CAN HAPPEN (the seller can keep showing the house and entertain other offers).

So no, I don't think you have a legitimate gripe (unless the listing agent told "their buyer" what your offer is), except that a slow response by the listing agent and your agent's not being aggressive in getting an answer within a few days is kind of sleazy.

Thanks for your response.  I did use a similar tactic as you described.  In fact, i completely went around the sellerís agent and had my offer submitted by the office manager.  This was all to protect them from taking advantage of us.

Thanks for explaining also that legally they did nothing wrong.  This is what i suspected.

Iíll never know for certain whether the sellerís agent made it a win-win-win for the seller and other buyer (screwing me and his coworker realtor), or if he made it win-win for himself and the seller, but not the other buyer who paid more than he might have had i not been in the picture.  Iíll never know for certain if the other agent did anything illegal behind the scenes... itís risky but not uncommon.

 All i can say for certain is that there was a conflict of interest present, which at the very least put me at a disadvantage, and put the seller and sellerís agent at an advantage.  Im not saying thatís illegal, and the ethics depend on unknowns.

I'm a realtor so I'm sure this will be taken with a grain of salt but...  There is not a conflict of interest.  The listing agent did exactly what his sellers hired him to do and exactly what his buyers hired him to do.  He definitely had the advantage but did exactly what is required.  His sellers wanted him to sell their house for as much as they can get and his buyers want him to find him a house they like.  When you came along and submitted an offer you simply helped his buyers "get off the pot" and make a decision.  Ultimately his sellers are happy for the sale price and his buyers are happy for the home they got.  You lost a bidding war and it sucks that you were at a disadvantage but that's all it was.

I have had many similar situations and my sellers typically directly tell me to tell my buyers what they need to offer to get the house over the other agent's buyers. It's then up to my buyers to say yay or nay.  Sometimes they pass and other times they choose to do it. 

I've seen it happen before, so I'm assuming it's legal.

It's also clearly unethical, but real estate agents aren't exactly known for being paragons of virtue.  They make money by lying to you, after all.  Remember that every party to a home sale makes money, except the buyer, because it's the buyer's money that is paying everyone else.

I'd walk, in your situation.  You have no way to be treated fairly in this negotiation, and all of the incentives are against you. 

That's casting an extremely wide net referring to realtors as making money by lying.  The buyer was treated as fairly as possible.  His agent didn't have a direct connection to the seller so they were at a disadvantage but not treated unethically.

In reading your response, i would say i partially disagree.  The main disagreement is that the realtor is incentivized to make the double deal, this is why its a conflict of interest. This is why all parties in my state were required to sign forms consenting to the double agent deals.

I would also point out that youíre a realtor, and missed a pretty obvious conflict of interest. 

 But other than that, what you said sounds reasonable.

In the way it was described it seems like everyone got a chance at the purchase.  I didn't miss a conflict of interest.  All parties were aware of the situation.  The realtor having incentive to get both sides of the deal can work in the best interest of both the seller and the buyer.  Maybe the realtor cut his commission to get the sides close enough to give a better net price to the seller with a lower offer (if he did he would have legally been required to tell your agent) . The listing agent worked for his seller and buyer to the best of his ability in the given situation.  He didn't owe you or your agent anything in the situation outside of legally being required to present your offer.  Again, I'm agreeing that it royally sucks to be on the losing side of a purchase and also a bidding war but I didn't miss a conflict of interest.

I myself as a buyer have missed out on a purchase in a multiple offer situation just about 6 months ago on an investment property.  The listing agent brought the buyer.  Did she have an advantage?  100% she did.  Was I upset?  Absolutely, but only because I missed a great deal.  I never once thought she did anything unethical and I still have a great professional relationship with that agent.  She had the open line of communication to the seller and I did not.   I had a cash offer with no inspections and 7 day close while the other buyer was financing with inspections and a 30 day close and I didn't win.  Go figure.

I don't mean to be rude , but I don't think you understand what conflict of interest is.  You have an accurate understanding of the situation, except that your definition of conflict of interest is off.

The other agent representing multiple parties is a conflict of interest because he stands to make more money if things turn out a certain way.  This means that he is financially incentivized to favor a certain outcome.  It doesn't mean he will act this way, but it is simply acknowledging the truth of the situation.

sol

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Re: fishy business with sudden bidding war
« Reply #18 on: August 13, 2018, 12:29:06 PM »
I didn't miss a conflict of interest. 

You're apparently still missing it.

What if the agent screwed the seller in order to get double commission on a lower sale price, instead of lower commission on a higher sale price?  We don't know for sure if that happened or not, but we do know that the opportunity for an ethical breach was present, the outcome was consistent with an ethical breach having occurred, and that we have no way to verify it so the breach can potentially go undetected. 

That's the very definition of a conflict of interest!  It doesn't require a crime to have been committed in a provable way, a conflict of interest only requires that there is a the opportunity for it.  That's why conflicts if interest are proactively avoided, to avoid the appearance of impropriety and thus preserve the integrity of the actors, not just to avoid unethical behavior from continuing.

Real estate deals are built on trust.  In this case, that trust was clearly violated.  The fact that another realtor showed up to defend that behavior is the perfect example of why I think the entire industry is ethically compromised.  This sort of thing is NOT okay.

Finallyunderstand

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Re: fishy business with sudden bidding war
« Reply #19 on: August 14, 2018, 08:56:35 AM »
All I missed is the POTENTIAL for a conflict of interest for two parties (of which neither are the OP) based on assumptions coming from the individual who didn't get their desired outcome. 

The american way... People often assume something is wrong, unethical, unfair, etc if they don't get the outcome they want.  If the outcome doesn't happen exactly as they plan that the other side are liars, cheats, frauds. 

As I've said over and over, if everyone was aware of the situation and allowed it to go forward and continue to be a part of it, that is their decision.  If things were hidden and not disclosed in direct contradiction to legally required disclosures, yes, definitely a conflict of interest could have occurred and occurred between the buyer and seller, not between the buyer, seller, and 2nd buyer.

OP submitted an escalator clause with the contract.  This pushed lukewarm buyers to step up and make what was MOST LIKELY (not guaranteed--- another assumption) the better net offer.  This could have been (another assumption) the best interest of the seller AND the best interest of the buyer because they both got what they want.  Maybe the lukewarm buyer paid more than they originally wanted to or what the home was worth but it was because of the escalator clause from OP and it was their own decision to do so.  I'm assuming they were not forced to continue to submit offers.

All of your conflict of interest arguments are based solely on assumptions.  I'm also stating assumptions.  Both are  OPINIONS of what COULD have happened.  In my ASSUMPTIONS there is not a conflict of interest.  In other ASSUMPTIONS there are conflicts of interest.  Both can be correct assumptions.

Yes, the realtor certainly made more money by representing both sides.  In that same situation the seller could have walked away with more money and the buyer could have purchased the house for a lower amount.  We don't know. Both of those parties were represented by the same person who MAY or MAY NOT have cut commission to help BOTH of his clients with no regard to a 3rd party.  He didn't have a contractual obligation of any kind to the 3rd party (OP).

If the realtor did shady stuff then that sucks.  There are definitely shady realtors.  And shady restaurant owners.  Hell, even a shady lawn fertilizer company in my area who was caught ringing clients doorbells and if nobody was home they sprinkled fertilizer on the sidewalks and driveways to make it look like they did the yard

Take both realtors out of the mix.  You have a seller selling a house.  A lukewarm buyer is dancing around.  2nd buyer comes along and makes an offer.  A seller will certainly call the lukewarm buyer and tell them they received an offer.  Lukewarm buyer submits an offer too.  Offers escalate.  Seller can choose to tell either buyer whatever they want to.
 EX:  "Lukewarm buyer, you have to offer X to beat 2nd buyer."  If the sellers get what they want they don't have to tell the 2nd buyer anything unless they want to.  That same situation can happen with realtors being the messengers and the 2nd buyer will say that it was unfair because Lukewarm buyer received information they didn't have access too.  That is true, unfair.

Sellers can accept any offer regardless of terms, price, buyers, etc and can even do so and instruct their agents to do so without regard to all parties trying to purchase the home. 

The situation may have been done in both the buyer and sellers BEST INTEREST and done legally and until everyone else realizes that potential as well then they are also missing something.


js82

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Re: fishy business with sudden bidding war
« Reply #20 on: August 14, 2018, 10:22:48 AM »
I've seen it happen before, so I'm assuming it's legal.

It's also clearly unethical, but real estate agents aren't exactly known for being paragons of virtue.  They make money by lying to you, after all.  Remember that every party to a home sale makes money, except the buyer, because it's the buyer's money that is paying everyone else.

I'd walk, in your situation.  You have no way to be treated fairly in this negotiation, and all of the incentives are against you.

Can't comment on the specific situation - but I've been there, and I second the opinion to walk.

I was in this situation last summer(Seller and other offer were both represented by the same agent).  I put in an offer on a place.  So did someone else.  So we were each to submit another offer.  The came back(supposedly) at the same dollar amount. Round 2, same deal - they claimed the offers were identical.  At this point I decided things smelled fishy(my agent agreed with my assessment) and I wasn't going to play that game.

I eventually decided that I would rent for a while until the housing market in my area stops being stupid.  Where I live the market is horrifically stacked in favor of sellers, which means that they can get away with all kinds of behavior that wouldn't fly in a buyers' market.  It's the kind of situation that's worth waiting out, at least if you're me.

charis

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Re: fishy business with sudden bidding war
« Reply #21 on: August 14, 2018, 12:50:39 PM »
All I missed is the POTENTIAL for a conflict of interest for two parties (of which neither are the OP) based on assumptions coming from the individual who didn't get their desired outcome. 

...

definitely a conflict of interest could have occurred and occurred between the buyer and seller, not between the buyer, seller, and 2nd buyer.
...

A conflict of interest is the presence of two conflicting interests.  The agent of the buy and the seller has a conflict of interest.  The two parties can be on notice of the agent's conflict and still consent to proceed, but the conflict still exists.  They are just willing to waive it and proceed with that agent in spite of the conflict.  So it's not a "potential" conflict.  That's why it has to be disclosed. 

Whether this conflict ends up hurting one of those parties is a separate issue (that's what you are talking about).  It may not be a conflict as to the OP, but it still exists nonetheless.

Case

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Re: fishy business with sudden bidding war
« Reply #22 on: August 14, 2018, 07:26:51 PM »
All I missed is the POTENTIAL for a conflict of interest for two parties (of which neither are the OP) based on assumptions coming from the individual who didn't get their desired outcome. 

The american way... People often assume something is wrong, unethical, unfair, etc if they don't get the outcome they want.  If the outcome doesn't happen exactly as they plan that the other side are liars, cheats, frauds. 

As I've said over and over, if everyone was aware of the situation and allowed it to go forward and continue to be a part of it, that is their decision.  If things were hidden and not disclosed in direct contradiction to legally required disclosures, yes, definitely a conflict of interest could have occurred and occurred between the buyer and seller, not between the buyer, seller, and 2nd buyer.

OP submitted an escalator clause with the contract.  This pushed lukewarm buyers to step up and make what was MOST LIKELY (not guaranteed--- another assumption) the better net offer.  This could have been (another assumption) the best interest of the seller AND the best interest of the buyer because they both got what they want.  Maybe the lukewarm buyer paid more than they originally wanted to or what the home was worth but it was because of the escalator clause from OP and it was their own decision to do so.  I'm assuming they were not forced to continue to submit offers.

All of your conflict of interest arguments are based solely on assumptions.  I'm also stating assumptions.  Both are  OPINIONS of what COULD have happened.  In my ASSUMPTIONS there is not a conflict of interest.  In other ASSUMPTIONS there are conflicts of interest.  Both can be correct assumptions.

Yes, the realtor certainly made more money by representing both sides.  In that same situation the seller could have walked away with more money and the buyer could have purchased the house for a lower amount.  We don't know. Both of those parties were represented by the same person who MAY or MAY NOT have cut commission to help BOTH of his clients with no regard to a 3rd party.  He didn't have a contractual obligation of any kind to the 3rd party (OP).

If the realtor did shady stuff then that sucks.  There are definitely shady realtors.  And shady restaurant owners.  Hell, even a shady lawn fertilizer company in my area who was caught ringing clients doorbells and if nobody was home they sprinkled fertilizer on the sidewalks and driveways to make it look like they did the yard

Take both realtors out of the mix.  You have a seller selling a house.  A lukewarm buyer is dancing around.  2nd buyer comes along and makes an offer.  A seller will certainly call the lukewarm buyer and tell them they received an offer.  Lukewarm buyer submits an offer too.  Offers escalate.  Seller can choose to tell either buyer whatever they want to.
 EX:  "Lukewarm buyer, you have to offer X to beat 2nd buyer."  If the sellers get what they want they don't have to tell the 2nd buyer anything unless they want to.  That same situation can happen with realtors being the messengers and the 2nd buyer will say that it was unfair because Lukewarm buyer received information they didn't have access too.  That is true, unfair.

Sellers can accept any offer regardless of terms, price, buyers, etc and can even do so and instruct their agents to do so without regard to all parties trying to purchase the home. 

The situation may have been done in both the buyer and sellers BEST INTEREST and done legally and until everyone else realizes that potential as well then they are also missing something.

You seriously don't understand what a conflict of interest is.

Your lengthy speech is just digging you in deeper in an untenable argument.
« Last Edit: August 15, 2018, 04:05:47 AM by Case »

sol

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Re: fishy business with sudden bidding war
« Reply #23 on: August 14, 2018, 09:25:05 PM »
You're lengthy speech is just digging you in deeper in an untenable argument.

Yes, but I'm kind of enjoying watching it all go down.

Please, realtor friend, tell us more about how realtors operate in a market completely devoid of ethical norms.

ender

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Re: fishy business with sudden bidding war
« Reply #24 on: August 14, 2018, 09:35:37 PM »
What type of fiduciary duties do selling agents even have?

Is that even part of being a realtor?

Finallyunderstand

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Re: fishy business with sudden bidding war
« Reply #25 on: August 15, 2018, 09:11:21 AM »
Limited Agency Agreements or Dual Agency Agreements do not solely use the words "does", "always" in regards to creating conflicts of interest.  They will often say "may", "can", "may be", and that is my argument.  I have always said the potential is there but it does not always create a conflict of interest.  My flaw of discussion has been focusing solely on your viewpoint of sale price when discussing conflicts of interest.  I fully understand there can be conflicts of interest and most often so when focusing only on price. 

One of the Fiduciary duties is Loyalty.  Loyalty is representing a seller or buyer's best interest.  Where you are all not seeing my point is you are focused solely on price as being the sellers best interest.  If you realize that the sellers and buyers can have other focuses as their best interest and if an agent also represents a buyer who's best interests are the same as the seller, then you are working in their best interest by working with both.

None of the fiduciary duties say you need to maximize sale price of a seller or get the lowest price for a buyer (that often is what most people want though) because sometimes there are other things at play for their best interests. 

Examples: Tax consequences at certain sales prices, 1031 exchanges that need to happen in a certain time frame, satisfying conditions of divorce decrees, selling to an owner occupant at a lower sale price as compared to an investor at a higher sale price because the seller doesn't want their home ripped down, etc.

If you don't see that there can be other factors at play and focus solely on price then it is easy to conclude conflicts of interest exist. There are also instances where they are not created even when the same agent is on both sides.

The situation is often compared to attorneys representing both sides.  I don't see the direct correlation.  Attorney's typically are arguing for guilty or not guilty, pay a fine or don't pay a fine.  Literally opposite arguments.  In real estate sales each sale is not an opposite argument.  Sometimes a sellers best interest is also a buyers best interest.

Slee_stack

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Re: fishy business with sudden bidding war
« Reply #26 on: August 15, 2018, 11:43:22 AM »
Chuckling here while waiting for the poster above to live up to their screen name.

pigpen

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Re: fishy business with sudden bidding war
« Reply #27 on: August 15, 2018, 12:14:02 PM »
Chuckling here while waiting for the poster above to live up to their screen name.

I think the poster above does, indeed, understand what a conflict of interest is. He/she just doesn't want to admit that the situation in question constitutes one.

After my first real-estate transaction (buying my first house), I realized that the common idea that the realtor is truly my representative/advocate/buddy/out-for-my-best-interest-guy is an idea that's going to cost me. I think it's best to see a real-estate agent as an advocate for the sale, and nothing more. If they're more principled than that, so much the better, but it's best to assume otherwise.

The whole transaction is riddled with conflicts of interest and opportunities for outright deception, from the agents who don't get paid if no one buys or sells anything, to the completely "objective" home inspector who'll stop getting clients if he/she finds either too much or too little wrong with a house.

ender

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Re: fishy business with sudden bidding war
« Reply #28 on: August 15, 2018, 08:14:09 PM »
One of the Fiduciary duties is Loyalty.  Loyalty is representing a seller or buyer's best interest.  Where you are all not seeing my point is you are focused solely on price as being the sellers best interest.  If you realize that the sellers and buyers can have other focuses as their best interest and if an agent also represents a buyer who's best interests are the same as the seller, then you are working in their best interest by working with both.

None of the fiduciary duties say you need to maximize sale price of a seller or get the lowest price for a buyer (that often is what most people want though) because sometimes there are other things at play for their best interests. 

Examples: Tax consequences at certain sales prices, 1031 exchanges that need to happen in a certain time frame, satisfying conditions of divorce decrees, selling to an owner occupant at a lower sale price as compared to an investor at a higher sale price because the seller doesn't want their home ripped down, etc.

If you don't see that there can be other factors at play and focus solely on price then it is easy to conclude conflicts of interest exist. There are also instances where they are not created even when the same agent is on both sides.

I suspect the number of SFH transactions across the entire country where anything other than selling price or timeline (which preapproved offers mitigate significantly) is nearly zero.

And as always, keep in mind that for a realtor to make another $5k on a sale of a house, the house needs to sell for almost $170k more, assuming they get 3%. For a seller, they just need to sell it for ~$6k more.

The realtors goal is much more to ensure they are able to sell the house. Their marginal benefit behind getting a seller another $5k-$10k is no where near as significant as it is for the seller.


MommyCake

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Re: fishy business with sudden bidding war
« Reply #29 on: August 16, 2018, 11:02:39 AM »
I think some of you are being unfair to Finallyunderstand. 

The situation described by the OP is a common occurrence, and is not illegal or unethical.  It is the sellers agents responsibility to find the best offer for the property, and he did do that.  A sellers agent can also represent a buyer because there is not necessarily a conflict of interest - The agent can represent both parties ethically.  The scenarios that some of you are throwing out (what if the sellers agent had the seller accept the lower of the offers etc etc) are not based on facts...  The facts are that there were multiple offers and the seller chose the best (probably highest) one.  A realtor is required to present all offers to the seller.  The realtor, at the sellers request, can continue to show the property and accept offers up until attorney review process is over. 

When we bought our house almost 3 years ago, this same thing happened, except our bid was the winning bid.  We put in our offer and the seller accepted and we went into attorney review.  The realtor told us someone had outbid us.  We offered 10k more and our deal continued.  It sucked, but thats the nature of the real estate market. 

Prairie Stash

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Re: fishy business with sudden bidding war
« Reply #30 on: August 16, 2018, 11:45:47 AM »
I think some of you are being unfair to Finallyunderstand. 

The situation described by the OP is a common occurrence, and is not illegal or unethical.  It is the sellers agents responsibility to find the best offer for the property, and he did do that.  A sellers agent can also represent a buyer because there is not necessarily a conflict of interest - The agent can represent both parties ethically.  The scenarios that some of you are throwing out (what if the sellers agent had the seller accept the lower of the offers etc etc) are not based on facts...  The facts are that there were multiple offers and the seller chose the best (probably highest) one.  A realtor is required to present all offers to the seller.  The realtor, at the sellers request, can continue to show the property and accept offers up until attorney review process is over. 

When we bought our house almost 3 years ago, this same thing happened, except our bid was the winning bid.  We put in our offer and the seller accepted and we went into attorney review.  The realtor told us someone had outbid us.  We offered 10k more and our deal continued.  It sucked, but thats the nature of the real estate market.
Illegal and unethical
Illegal is the lowest form of societal morality. People who engage in illegal activities are breaking the agreed upon conventions of society. Avoiding illegal activities does not make you a great person, it just keeps you out of jail

Unethical
Ethics are in the eye of the beholder. You cannot claim the realtor was unethical to my standards, just to your own. While you claim it wasn't unethical, I think it was, by definition we're both correct.

Defending people that are considered unethical by others is a slippery slope. It signals to the world that you would treat people in the same fashion. Be careful throwing out the term.

I'd be ashamed of OP if they didn't have a confidentiality clause or a Good faith clause in their contract. A good faith clause prohibits using a negotiation with a party to leverage a second proposal. A confidentiality clause means the sellers realtor was legally not allowed to disclose it to the 3rd party.

You think the realtor was being clever and inventing a new strategy for getting a sale? Theres not a sales tactic around that hasn't been done before. There are also preventative measures for each one, in this case Good Faith Negotiations. For every shady deal, people have figured out ways to prevent it.

(Good Faith Negotiations)
"An agreed-upon duty to negotiate in good faith means, at the least, a duty to negotiate (or re-negotiate) seriously with an intent to conclude an agreement, but not that an agreement must be reached."

"It is bad faith, in particular, for a party to enter into or continue negotiations when intending not to reach an agreement with the other party."

(Duty of confidentiality)
Where information is given as confidential by one party in the course of negotiations, the other party is under a duty not to disclose that information or to use it improperly for its own purposes, whether or not a contract is subsequently concluded. Where appropriate, the remedy for breach of that duty may include compensation based on the benefit received by the other party.

If the offer was ever discussed with the 3rd party, or used to close a sale, the seller broke confidentiality rules.

MommyCake

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Re: fishy business with sudden bidding war
« Reply #31 on: August 16, 2018, 12:06:26 PM »
It is generally the amount and exact terms of the offer that is confidential, as is the identity of the potential buyer.  Saying that there is an offer is not breaking confidentiality. 

The situation is not unethical according to Realtor Code of Ethics which you can find at nar.realtor. 

Inventing a new strategy?  I believe I said it was a common occurrence. 

Prairie Stash

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Re: fishy business with sudden bidding war
« Reply #32 on: August 16, 2018, 12:37:02 PM »
It is generally the amount and exact terms of the offer that is confidential, as is the identity of the potential buyer.  Saying that there is an offer is not breaking confidentiality. 

The situation is not unethical according to Realtor Code of Ethics which you can find at nar.realtor. 

Inventing a new strategy?  I believe I said it was a common occurrence.
You did say that, I totally agree. Then I responded with saying that for every comon occurence, bright minds have found a solution.

Interesting link:
 Realtorsģ shall not knowingly, during or following the
termination of professional relationships with their clients:
 1)  reveal confidential information of clients; or
2)  use confidential information of clients to the disadvantage of clients; or
 3)  use confidential information of clients for the Realtorģís advantage
or the advantage of third parties unless:
 a)  clients consent after full disclosure; or


Agent: a real estate licensee acting in an agency
relationship as defined by state law or regulation;
Client: the person(s) or entity(ies) with whom a
REALTORģ or a REALTORģís firm has an agency or
legally recognized non-agency relationship;

Customer: a party to a real estate transaction who
receives information, services, or benefits, but has
no contractual relationship with the REALTORģ or the
REALTORģís firm

Your link says that since the two realtors worked in the same agency, the duty of confidentiality extends to both agents of the firm. According to the ethics document you provided, the realtors in question broke their ethical responsibilty, since OP was a client of the sellers Agency.

The two agents worked for the same firm. the ethics guidelines extend to the other realtors of your firm and you have a duty to them as well, feel free to read your link.

Please remember, its not illegal to break the ethical guidelines. There is no recourse in the law, these are just guidelines to live up to if you want the respect of the public.

Rule#1 of Realtors
 ďWhatsoever ye would that others should do to you,
do ye even so to them.Ē

If the tables were turned, would the seller appreciate having their bid disclosed? You didn't like it, the OP didn't and I wouldn't either.

MommyCake

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Re: fishy business with sudden bidding war
« Reply #33 on: August 16, 2018, 12:47:51 PM »
How do you know the agents in the situation disclosed confidential information?  You are making assumptions. 

Again, stating that an offer was made is not breaking confidentiality. If the agent had stated "Mr. John Perez of Sacramento offered 500k for the property, you better make a move!" that would be a violation of the realtor code of ethics.   Such a violation could result in a fine and/or temporary or permanent loss your license.  You could also get sued for damages. 

RyanAtTanagra

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Re: fishy business with sudden bidding war
« Reply #34 on: August 16, 2018, 01:09:06 PM »
The situation is not unethical according to Realtor Code of Ethics which you can find at nar.realtor. 

So it's not unethical according to the people deciding if what they're doing is unethical?  That's like the police investigating the actions of the police to see if the police did anything illegal, and determining there was no foul play.

Just because what is happening is disclosed doesn't mean there isn't a conflict of interest, nor does it mean it's not questionable business practice.

MommyCake

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Re: fishy business with sudden bidding war
« Reply #35 on: August 16, 2018, 01:29:35 PM »
Well, I can see I am in a losing battle of Mustachians Vs. Mustachian Realtors.  I am a newly licensed part-time agent and perhaps have yet to reach the level of scummy unethicality (is that a word?) that you all speak of.  Or perhaps there are geographical differences involved.  Or maybe I am unethical and do not know it.

In my area currently, most properties receive multiple offers.  It has been a sellers market for some time and inventory is low.  And yes, clients are told "there are 7 other offers" or whatever.  All parties must be treated fairly.  It would not be fair to NOT present an offer to a seller just because there has already been an offer made, even if it is accepted.  That would not be fair to the seller, who is usually seeking the highest purchase price possible.  It would not be fair to the potential buyer to lead him or her to believe their offer is the only one.  So we tell them if there are other offers.  If they really want a property, but think they are the only one, they could make a low ball offer and lose the property.  It is fair to everyone to present the information, but not the amounts or the specifics.  I called an office about a property the other day and was told there were already SEVENTY offers put in.  It is common practice and not unethical according to our county board.

Most professions do have internal ethics committees, review boards etc to determine standards and review incidents.  Police do "police" themselves with internal investigations. 


Prairie Stash

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Re: fishy business with sudden bidding war
« Reply #36 on: August 16, 2018, 02:07:37 PM »
How do you know the agents in the situation disclosed confidential information?  You are making assumptions. 

Again, stating that an offer was made is not breaking confidentiality. If the agent had stated "Mr. John Perez of Sacramento offered 500k for the property, you better make a move!" that would be a violation of the realtor code of ethics.   Such a violation could result in a fine and/or temporary or permanent loss your license.  You could also get sued for damages.
"resorting to technicalities to justify questionable actions;" is discouraged in the realtors ethical guidleines.

The ethical guidllines at nar.realtor assume that once you've resorted to a technicality, you've gone too far. Many find the situation questionable, you resorted to a technicality...

Having low ethical standards isn't illegal at all. All it does is diminish the esteem we have of realtors. In itself, I find that sad.

If you are a realtor, my apologies. If you feel the need to be defensive, its not my intent. If you want people to like your profession, then you shouldn't rely on technicalities. Lets face facts here; the OP lost a lot of faith in realtors and posted here. The entire ethical guideline was written so the OP would trust realtors, so what happened?

Explain to me why I should view Realtors as Paragons of Ethical virtue? What part of the story makes realtors look good? How could the situation been handled better so that OP didn't start this thread?

Case

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Re: fishy business with sudden bidding war
« Reply #37 on: August 16, 2018, 07:25:38 PM »
Well, I can see I am in a losing battle of Mustachians Vs. Mustachian Realtors.  I am a newly licensed part-time agent and perhaps have yet to reach the level of scummy unethicality (is that a word?) that you all speak of.  Or perhaps there are geographical differences involved.  Or maybe I am unethical and do not know it.

In my area currently, most properties receive multiple offers.  It has been a sellers market for some time and inventory is low.  And yes, clients are told "there are 7 other offers" or whatever.  All parties must be treated fairly.  It would not be fair to NOT present an offer to a seller just because there has already been an offer made, even if it is accepted.  That would not be fair to the seller, who is usually seeking the highest purchase price possible.  It would not be fair to the potential buyer to lead him or her to believe their offer is the only one.  So we tell them if there are other offers.  If they really want a property, but think they are the only one, they could make a low ball offer and lose the property.  It is fair to everyone to present the information, but not the amounts or the specifics.  I called an office about a property the other day and was told there were already SEVENTY offers put in.  It is common practice and not unethical according to our county board.

Most professions do have internal ethics committees, review boards etc to determine standards and review incidents.  Police do "police" themselves with internal investigations.

Just wanted to to say i appreciate you chiming in with opinions, even if there is disagreement.  You at least seem pretty reasonable, unlike that other guy who has some misconnected logic circuits.

I havenít followed everything posted precisely, but one idea iíll throw out there... just because the board of realtors has a set of ethics standards doesnít mean we should follow it or that it is good enough... but honestly i havenít read that link you sent so my opinion means nill there!

Case

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Re: fishy business with sudden bidding war
« Reply #38 on: August 16, 2018, 07:35:33 PM »
Chuckling here while waiting for the poster above to live up to their screen name.

He's making what is a sort of straw man argument, whether he realizes it or not.  Creating a defendable argument which is different from the main argument, so that it appears he has successfully defended his point, when he has merely proven something irrelevant and not actually disagreed upon.  Though there are also plenty ofo other things people are disagreeing with him on.

This sort of slimyness is second nature and par for the course for some (but not all) realtors.

pigpen

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Re: fishy business with sudden bidding war
« Reply #39 on: August 17, 2018, 07:21:39 AM »
Chuckling here while waiting for the poster above to live up to their screen name.

He's making what is a sort of straw man argument, whether he realizes it or not.  Creating a defendable argument which is different from the main argument, so that it appears he has successfully defended his point, when he has merely proven something irrelevant and not actually disagreed upon.  Though there are also plenty ofo other things people are disagreeing with him on.


Yes. There are several different arguments someone could have here. Whether the transaction: 1. was legal, 2. was ethical, 3. was moral, 4. involved a conflict of interest. And probably others that I can't think of off the top of my head. They're related, obviously, but still different, and proving or disproving one doesn't prove or disprove any of the others.

MommyCake

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Re: fishy business with sudden bidding war
« Reply #40 on: August 17, 2018, 08:52:58 AM »

[/quote]
"resorting to technicalities to justify questionable actions;" is discouraged in the realtors ethical guidleines.

The ethical guidllines at nar.realtor assume that once you've resorted to a technicality, you've gone too far. Many find the situation questionable, you resorted to a technicality...


[/quote]

What technicality?  If you call your county as a disgruntled client to tell them your realtor, or the seller's realtor, advised their client that there is an offer (yours) on a property, they will tell you that is standard business practice.  It is the most fair action as I already tried to explain above.  If you currently trying to purchase property, you will find this to be the case.  If you were the seller in the OP's situation, I would imagine you would be dissatisfied if that realtor didn't present you with the second offer.  I do agree that if the sellers agent disclosed the amount of the offer that is wrong.  But there is no statement made by the OP that's what happened.  If you look at the basic facts:  House went on market.  Offer was placed.  Second offer placed.  Seller accepted second offer.  There is nothing wrong with that scenario and it happens every week, if not every day. 

MommyCake

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Re: fishy business with sudden bidding war
« Reply #41 on: August 17, 2018, 08:56:38 AM »


Just wanted to to say i appreciate you chiming in with opinions, even if there is disagreement.  You at least seem pretty reasonable, unlike that other guy who has some misconnected logic circuits.

I havenít followed everything posted precisely, but one idea iíll throw out there... just because the board of realtors has a set of ethics standards doesnít mean we should follow it or that it is good enough... but honestly i havenít read that link you sent so my opinion means nill there!

Thank you.  There may be bad realtors out there but nowhere near all, at least not that I have come across in my area.  All I can say is if you are uncomfortable with your agent, there are many many others out there. 

Ceredwyn

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Re: fishy business with sudden bidding war
« Reply #42 on: August 17, 2018, 09:09:16 AM »
I honestly don't understand what you find unethical here. There was a 2nd buyer who was considering making an offer. In all likelihood they liked the house but, noting that it had been sitting on the market for a month, figured the price might drop. When they heard that there was another offer that came in, they decided to give up on waiting for a deal and came in aggressively and outbid you. As an extra wrinkle, it may be possible that their offer was exactly the same as yours via an escalation clause but the seller agent split his portion of the buyer finder's fee to get their offer to be more net money to the seller while still making an extra 1.4% off the deal for himself.

I'm sorry that you lost the house but that just sounds like capitalism to me. Do you have any reason to believe that the agent disclosed your offer to the other buyer? Not just "an offer needs to be over list to be competitive" but literally "Case bid $x, you need to bid $y to win." If not, this just seems like business as usual for real estate transactions.
« Last Edit: August 17, 2018, 09:32:44 AM by Ceredwyn »

robartsd

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Re: fishy business with sudden bidding war
« Reply #43 on: August 17, 2018, 11:21:46 AM »
There is nothing unethical that I can see in the facts as they are laid out.

Seller listed property. Seller's agent learned of a prospective buyer that had not yet put in an offer on the property. OP put in an offer on the property. Seller's agent informed other interested parties that there was an offer on the property. Other interested party outbid OP.

From the original post, I thought the concern was that the "other offer" was not really an offer, but an attempt to get a higher bid. Since the other offer won, it must have been a legitimate offer.

There is some potential for unethical behavior given the facts that we have, but we don't have any evidence of it occurring:
  • Seller's agent knew of multiple interested parties, but only informed some of them (told buyer working directly with them, but not other agents that had communicated that they had potential buyers considering making an offer.
  • Seller's agent shared details of offers with other interested parties.

Case

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Re: fishy business with sudden bidding war
« Reply #44 on: August 17, 2018, 03:15:52 PM »
I honestly don't understand what you find unethical here. There was a 2nd buyer who was considering making an offer. In all likelihood they liked the house but, noting that it had been sitting on the market for a month, figured the price might drop. When they heard that there was another offer that came in, they decided to give up on waiting for a deal and came in aggressively and outbid you. As an extra wrinkle, it may be possible that their offer was exactly the same as yours via an escalation clause but the seller agent split his portion of the buyer finder's fee to get their offer to be more net money to the seller while still making an extra 1.4% off the deal for himself.

I'm sorry that you lost the house but that just sounds like capitalism to me. Do you have any reason to believe that the agent disclosed your offer to the other buyer? Not just "an offer needs to be over list to be competitive" but literally "Case bid $x, you need to bid $y to win." If not, this just seems like business as usual for real estate transactions.

This was one of the key points of the thread; conflict of interest vs ethics and the relationship of unknowns.  Rather than restate the arguments, you can find them above.

ĎCapitalismí is often touted as a stand alone answer, as if that implies the it is correct.  Capitalism has plusses and minuses, especially when one considers whether Ďbetterí means Ďmore moneyí vs Ďquality of lifeí.

PizzaSteve

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Re: fishy business with sudden bidding war
« Reply #45 on: August 17, 2018, 04:39:19 PM »
My 2 cents are that I have always considered any Agent, including the one I am working with to find properties, to be representatives of the seller.  Other than my offer details, I have always considered it a good strategy to limit what my agent knows about my state of mind. 

I find that both agents usually represent their own interest, that of making a transaction happen, in addition to the sellers.  They often try to get parties to raise an offer or to lower an asking price in order to try make a transaction happen.  I see them as market makers, a bit like a stock or commodity market, so expect them to present arguments accordingly.

Even if I am willing to change my price I represent to my agent that I am not willing, mostly to discourage excessive lobbying at me to move quickly, spend more or lower my sale price, to encourage themto lobby the other counterparty, who I hope is more bendable to the eager agents' arguements.  This has saved us some considerable money, though we had to be willing to lose deals as well.

Its nice when agents say they cant believe we got a specific price, when they lobbied hard to not present an offer that was `insulting', etc.

Case

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Re: fishy business with sudden bidding war
« Reply #46 on: August 17, 2018, 07:12:51 PM »
There is nothing unethical that I can see in the facts as they are laid out.

Seller listed property. Seller's agent learned of a prospective buyer that had not yet put in an offer on the property. OP put in an offer on the property. Seller's agent informed other interested parties that there was an offer on the property. Other interested party outbid OP.

From the original post, I thought the concern was that the "other offer" was not really an offer, but an attempt to get a higher bid. Since the other offer won, it must have been a legitimate offer.

There is some potential for unethical behavior given the facts that we have, but we don't have any evidence of it occurring:
  • Seller's agent knew of multiple interested parties, but only informed some of them (told buyer working directly with them, but not other agents that had communicated that they had potential buyers considering making an offer.
  • Seller's agent shared details of offers with other interested parties.

I mostly agree with what you have written.  Insufficient data to conclude legal or ethical breach.

sol

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Re: fishy business with sudden bidding war
« Reply #47 on: August 17, 2018, 07:36:56 PM »
I mostly agree with what you have written.  Insufficient data to conclude legal or ethical breach.

As previously stated, you don't need conclusive evidence of a breach for there to be a conflict of interest.  You just need the appearance of an ethical conflict, an outcome consistent with an ethical conflict, and the ability conceal what really happened.  This situation ticks all three of those boxes.

"Conflict of interest" does not mean a crime was committed.  The word for that is "illegal" and I don't think anyone is arguing that the OP's situation is illegal.

Case

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Re: fishy business with sudden bidding war
« Reply #48 on: August 17, 2018, 07:42:07 PM »
I mostly agree with what you have written.  Insufficient data to conclude legal or ethical breach.

As previously stated, you don't need conclusive evidence of a breach for there to be a conflict of interest.  You just need the appearance of an ethical conflict, an outcome consistent with an ethical conflict, and the ability conceal what really happened.  This situation ticks all three of those boxes.

"Conflict of interest" does not mean a crime was committed.  The word for that is "illegal" and I don't think anyone is arguing that the OP's situation is illegal.

I am in agreement.

Curmudgeon

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Re: fishy business with sudden bidding war
« Reply #49 on: August 17, 2018, 08:53:21 PM »
To the OP:  It would be interesting to track this listing, and see if it actually sells to the other bidder, or if that was a made-up bidder.

My 2 cents:  In my experience (and I have friends and relatives who are realtors), very realtor works for his own best interest.  Regardless of whether he's a seller's agent, buyer's agent, signed a contract saying he's working in your best interest, etc.  Doesn't matter, he's only looking out for his own interest, and you'd be foolish to to expect differently.