What obligation does a listing agent have to alert you that your accepted offer is in fact only a backup offer in case a contract that's being actively negotiated falls through? I just went through a situation my offer was accepted by the seller with no conditions mentioned (i.e., not as a backup), and the agent told me that my lawyer needed sign off on the building financials in preparation of... [more]
What obligation does a listing agent have to alert you that your accepted offer is in fact only a backup offer in case a contract that's being actively negotiated falls through?
I just went through a situation my offer was accepted by the seller with no conditions mentioned (i.e., not as a backup), and the agent told me that my lawyer needed sign off on the building financials in preparation of the imminent receipt of the contract. I paid my lawyer to do that, and the listing agent promptly sent all the paperwork over, but a few days later when I told the agent that lawyer had OKed everything and we were ready to receive the contract, the agent suddenly told me they had a contract already nearly executed with another buyer.
When I told the agent that I wish she had let me know I my offer was backup only (since they were already actively negotiating the contract with the other buyer when the seller accepted my offer, and clearly continued the negotiations after my acceptance, all without telling me), she insisted I wasn't the backup, that I had been the live offer, but the seller had just randomly changed his mind or some such. But the agent never said a word to me that there was still another active potential buyer when the seller accepted my offer.
This whole incident left a bad taste in my mouth -- plus, I'm out about $1,000 that I'll owe my lawyer for her work. If I had known I was only a backup offer, I wouldn't have had my lawyer do such thorough due diligence at this time.
What do you think? Should the agent (or I) have handled this differently?
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Response by West81st
almost 17 years ago
Posts: 5564
Member since: Jan 2008
I would urge you to send a letter of complaint to the agent, CC'ing the Office Manager, the CEO of the firm and REBNY. Your compaint will be investigated, and if the agent violated her obligation to deal honestly with all customers, she will be disciplined. The firm might even cover a portion of your legal expenses.
Then again, all three copies might wind up in the trash; but it's worth a try.
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Response by manhattanfox
almost 17 years ago
Posts: 1275
Member since: Sep 2007
I had this happen. it is part of the cost of doing business -- albeit disappointing.
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Response by patient09
almost 17 years ago
Posts: 1571
Member since: Nov 2008
In the current environment, You simply require the listing broker submit a $1,000 check to you(the buyer) as a receipt of application fee. It's not big deal deal, and shows that the seller and listing agent are willing to act in good faith. That way you know if they are serious if not. All of the big brokerage houses are doing this now that they are trying to conduct honest business.
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Response by columbiacounty
almost 17 years ago
Posts: 12708
Member since: Jan 2009
huh? you're kidding?
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Response by patient09
almost 17 years ago
Posts: 1571
Member since: Nov 2008
no, I also charge for showings. Think about it. I am sitting at home minding my own business, broker calls and says hey, you really need to see my new listing. Sure, what's in it for me? There is a chance I could waste 30-45 minutes or more. I need to be compensated for that.
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Response by uppereast
almost 17 years ago
Posts: 342
Member since: Nov 2008
You must be kidding. So how much do they pay you?? This is great business. Maybe I should pretend to be a buyer and collect some fees here and there.
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Response by columbiacounty
almost 17 years ago
Posts: 12708
Member since: Jan 2009
ok..you got me.
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Response by bramstar
almost 17 years ago
Posts: 1909
Member since: May 2008
West81st's advice is spot on. This absolutely sounds improper and the broker should be reported. By the way, were you working with a buy-side broker as well, or just the seller's agent?
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Response by brendisch
almost 17 years ago
Posts: 11
Member since: Apr 2009
I'm not really concerned with taking legal action or expecting to get my legal fees reimbursed -- I realize that I didn't have an executed contract with the seller, simply an accepted offer with no mention of any conditions (such as another active accepted offer).
I'm just wondering if you feel that there was anything the agent or I could (or should) have done differently in this situation.
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Response by brendisch
almost 17 years ago
Posts: 11
Member since: Apr 2009
I was working only with the seller's agent.
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Response by wanderer
almost 17 years ago
Posts: 286
Member since: Jan 2009
This happened to me thanks to Michael Coker of Halstead who lied and said no other contract was out.
We were further along as buyers. We had the contract with our attorney and were ready to send it back with the 10%, we also had a lease and tenant ready to sign on our condo. Then Michael Coker from Halstead spoke to our attorney on the day of lease signing and said another contract had been exchanged.
I complained to his boss and all I got i return was a sales pitch for another building. I will never use Halstead. Nor will my freinds. Or thier freinds. Or thiers.
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Response by wanderer
almost 17 years ago
Posts: 286
Member since: Jan 2009
* ie/ei
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Response by brendisch
almost 17 years ago
Posts: 11
Member since: Apr 2009
In my case, the listing agent had very casually mentioned a contract was out when I viewed the apartment (at her invitation). But she quickly followed that by saying that it was very uncertain if the contract would be executed and they were accepting other offers in a wide-open field -- not as backup, but as primary offers (she was very clear that the other offers were not being considered only as backups to the already-accepted offer, but in lieu of it). She then very enthusiastically encouraged me to make an offer -- "ANY offer," as she said -- and that the seller was VERY motivated.
There was never again a mention of the other contract -- and when my offer was negotiated and then accepted by the seller, there was not a peep about any other deal that had to be resolved. I assumed -- incorrectly -- that my acceptance, and the listing agent's insistence that my lawyer should move ahead full throttle -- meant the previous buyer's deal was no longer in play. That was wrong, as that previous deal was the one that ended up being executed (and which I found out about only after it was basically done).
I would urge you to send a letter of complaint to the agent, CC'ing the Office Manager, the CEO of the firm and REBNY. Your compaint will be investigated, and if the agent violated her obligation to deal honestly with all customers, she will be disciplined. The firm might even cover a portion of your legal expenses.
Then again, all three copies might wind up in the trash; but it's worth a try.
I had this happen. it is part of the cost of doing business -- albeit disappointing.
In the current environment, You simply require the listing broker submit a $1,000 check to you(the buyer) as a receipt of application fee. It's not big deal deal, and shows that the seller and listing agent are willing to act in good faith. That way you know if they are serious if not. All of the big brokerage houses are doing this now that they are trying to conduct honest business.
huh? you're kidding?
no, I also charge for showings. Think about it. I am sitting at home minding my own business, broker calls and says hey, you really need to see my new listing. Sure, what's in it for me? There is a chance I could waste 30-45 minutes or more. I need to be compensated for that.
You must be kidding. So how much do they pay you?? This is great business. Maybe I should pretend to be a buyer and collect some fees here and there.
ok..you got me.
West81st's advice is spot on. This absolutely sounds improper and the broker should be reported. By the way, were you working with a buy-side broker as well, or just the seller's agent?
I'm not really concerned with taking legal action or expecting to get my legal fees reimbursed -- I realize that I didn't have an executed contract with the seller, simply an accepted offer with no mention of any conditions (such as another active accepted offer).
I'm just wondering if you feel that there was anything the agent or I could (or should) have done differently in this situation.
I was working only with the seller's agent.
This happened to me thanks to Michael Coker of Halstead who lied and said no other contract was out.
We were further along as buyers. We had the contract with our attorney and were ready to send it back with the 10%, we also had a lease and tenant ready to sign on our condo. Then Michael Coker from Halstead spoke to our attorney on the day of lease signing and said another contract had been exchanged.
I complained to his boss and all I got i return was a sales pitch for another building. I will never use Halstead. Nor will my freinds. Or thier freinds. Or thiers.
* ie/ei
In my case, the listing agent had very casually mentioned a contract was out when I viewed the apartment (at her invitation). But she quickly followed that by saying that it was very uncertain if the contract would be executed and they were accepting other offers in a wide-open field -- not as backup, but as primary offers (she was very clear that the other offers were not being considered only as backups to the already-accepted offer, but in lieu of it). She then very enthusiastically encouraged me to make an offer -- "ANY offer," as she said -- and that the seller was VERY motivated.
There was never again a mention of the other contract -- and when my offer was negotiated and then accepted by the seller, there was not a peep about any other deal that had to be resolved. I assumed -- incorrectly -- that my acceptance, and the listing agent's insistence that my lawyer should move ahead full throttle -- meant the previous buyer's deal was no longer in play. That was wrong, as that previous deal was the one that ended up being executed (and which I found out about only after it was basically done).