Broker refuses to submit offer, what recourse do I have?
Started by sticky
almost 17 years ago
Posts: 256
Member since: Sep 2008
Discussion about
The catch is, this broker & the property I want is an REO in Los Angeles. (The broker is the listing agent, in other words she represents the bank. This isn't my broker.) I know people on this board say it's illegal or a breach of a broker's fiduciary duty to refuse to submit an offer ... but is that a New York law/industry practice, or nationwide? Specifically, what recourse do I have in... [more]
The catch is, this broker & the property I want is an REO in Los Angeles. (The broker is the listing agent, in other words she represents the bank. This isn't my broker.)
I know people on this board say it's illegal or a breach of a broker's fiduciary duty to refuse to submit an offer ... but is that a New York law/industry practice, or nationwide? Specifically, what recourse do I have in California?
Here's the listing:
http://www.redfin.com/CA/West-Hollywood/1131-Alta-Loma-Rd-90069/unit-131/home/7120297
PRIME West Hollywood 2BR/2BA in a 24-hour concierge building, large well-stocked gym, heated pool. It's one of the few, perhaps only neighborhoods in LA that's truly walkable ... just step out the door and you're on Sunset Strip, and 2 blocks down is Santa Monica Blvd.
Bank is asking $479K, but the place is a DUMP, looks like a bomb went off, needs $100K in renovations to make pleasant. My broker, who is communicating with the listing agent on my behalf, says that those issues are reflected in the asking price, but actually $350K cash was her suggestion & that's what I offered. Now my broker says the lowest the listing agent will submit is $410K. According to my broker here, brokers are NOT required to submit all offers, so I wonder if that varies by state.
Yeah I'm thinking of defecting ... I work in TV so LA might even make better sense for me, career-wise. Work has been slow in NYC and prices in LA are so much more reasonable.
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Response by kylewest
almost 17 years ago
Posts: 4455
Member since: Aug 2007
RE law is 99% state law which is then layered with local practices. A general answer is not what you want. You need an answer based specifically on CA law and practice. I suggest locating a lawyer (you would have to do that for the deal were it to go through anyway), and getting some sound guidance in that manner.
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Response by inthehouse
almost 17 years ago
Posts: 19
Member since: Jan 2009
Why not have your broker contact the bank directly?
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Response by alpine292
almost 17 years ago
Posts: 2771
Member since: Jun 2008
If the bank told the broker not to submit any offers beloe $X, then you have no recourse.
And unfortunately, there does seem to be a shady practice in REOs in which the listing agent will deliberately not submit any offers so that the bank will lower the price down to almost nothing and then they or their family members will buy the house for poennies on the dollar.
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Response by ante148
almost 17 years ago
Posts: 70
Member since: Apr 2008
call the bank that owns the apartment. ask them how much the 1st mortgage was and bid 35% of that price. REOs in CA are trading between 40-70% severity on the loans.
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Response by waverly
almost 17 years ago
Posts: 1638
Member since: Jul 2008
Have you thought about a bat to the back of the head?
In all seriousness, I agree kylewest. I think you need an attorney in CA who can give you some guidance on this process and their state laws.
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Response by sticky
almost 17 years ago
Posts: 256
Member since: Sep 2008
My own broker here in LA--I don't use one in NYC but feel they're more helpful here--who recommended $350K told me that she's obligated to submit through the broker. Something about the bank having a contract through the listing agent & that we can't go around her. (Both brokers are female.)
I just don't know how real estate practices/law here work. Is my own broker correct in that we can't go to the bank directly, and that the listing agent can refuse to submit?
Another major difference I've noticed here is that all brokers here tell me that it's unnecessary and even rare to hire a lawyer for closing. In New York, even the most hard-selling broker told me to get an attorney ASAP.
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Response by uptowngal
almost 17 years ago
Posts: 631
Member since: Sep 2006
RE business laws and practices are different in each state. On the E coast it's necessary to get an attorney, but on the W coast, I beleive most of the work that a RE attornety would do in NY is already done by other parties.
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Response by drdrd
almost 17 years ago
Posts: 1905
Member since: Apr 2007
An attorney is not routinely used in real estate transactions in California.
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Response by sticky
almost 17 years ago
Posts: 256
Member since: Sep 2008
This is an REO but in a super-prime location on Sunset Strip in West Hollywood. Other than on the beach or a mansion in the Hills, there isn't a more desirable area in LA unless you want to live close to wherever you work.
At least, that's why my broker is telling me that 30-40% off asking isn't going to fly.
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Response by julia
almost 17 years ago
Posts: 2841
Member since: Feb 2007
what recourse...rent
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Response by tech_guy
almost 17 years ago
Posts: 967
Member since: Aug 2008
"Is my own broker correct in that we can't go to the bank directly"
What is the state of California going to do? Arrest you for verbally relaying an offer to an officer of the bank? Worst that will happen is that the bank politely refuses and says that they (not you) are contractually required to deal only with the broker. The contract between the bank and their agent can't block you from speaking. There's some amendment somewhere protecting your right to free speech.
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Response by patient09
almost 17 years ago
Posts: 1571
Member since: Nov 2008
get a new broker.....if you insist on using the same nutbag..then...send a certified letter to the bank containing a notorized offering for the property. Find out who is in charge of this stuff at the bank, send a copy to every relevant name you can find. Or.. Threaten to sue your broker under federal wire fraud statutes that were passed in accordance with the recent TARP legislation. Tell the muppet they have 24 hours to respond before you have the charges filed.
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Response by w67thstreet
almost 17 years ago
Posts: 9003
Member since: Dec 2008
kick him in the groin :)
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Response by nyg
almost 17 years ago
Posts: 150
Member since: Aug 2007
I do like that location alot--great proximity to Equinox...not that you need it after walking up that hill!!!
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Response by dwell
almost 17 years ago
Posts: 2341
Member since: Jul 2008
Sticky,
If you really want the property, contact the bank directly. Be the squeaky wheel.
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Response by Goldie
almost 17 years ago
Posts: 182
Member since: Apr 2007
"Super prime" was the story brokers sold to get prices to skyrocket during the peak. So I guess the broker is saying that these properties outperform "prime" areas during a housing rally and also outperform on the way down. A free lunch. Even NYC brokers won't sell that nonsense. It'd be interesting to know what the broker thinks about the at least 3 other units that are/were Countrywide REO http://www.streamfx.com/CW/10-23-2007/REO-California183.html
Why not give Countrywide a call on one of these? Maybe a few more owners have dropped off their keys since the above list came out.
And not to hype the property, but Tracy Scoggins lives in unit 515. That should be worth an extra $50k!
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RE law is 99% state law which is then layered with local practices. A general answer is not what you want. You need an answer based specifically on CA law and practice. I suggest locating a lawyer (you would have to do that for the deal were it to go through anyway), and getting some sound guidance in that manner.
Why not have your broker contact the bank directly?
If the bank told the broker not to submit any offers beloe $X, then you have no recourse.
And unfortunately, there does seem to be a shady practice in REOs in which the listing agent will deliberately not submit any offers so that the bank will lower the price down to almost nothing and then they or their family members will buy the house for poennies on the dollar.
call the bank that owns the apartment. ask them how much the 1st mortgage was and bid 35% of that price. REOs in CA are trading between 40-70% severity on the loans.
Have you thought about a bat to the back of the head?
In all seriousness, I agree kylewest. I think you need an attorney in CA who can give you some guidance on this process and their state laws.
My own broker here in LA--I don't use one in NYC but feel they're more helpful here--who recommended $350K told me that she's obligated to submit through the broker. Something about the bank having a contract through the listing agent & that we can't go around her. (Both brokers are female.)
I just don't know how real estate practices/law here work. Is my own broker correct in that we can't go to the bank directly, and that the listing agent can refuse to submit?
Another major difference I've noticed here is that all brokers here tell me that it's unnecessary and even rare to hire a lawyer for closing. In New York, even the most hard-selling broker told me to get an attorney ASAP.
RE business laws and practices are different in each state. On the E coast it's necessary to get an attorney, but on the W coast, I beleive most of the work that a RE attornety would do in NY is already done by other parties.
An attorney is not routinely used in real estate transactions in California.
This is an REO but in a super-prime location on Sunset Strip in West Hollywood. Other than on the beach or a mansion in the Hills, there isn't a more desirable area in LA unless you want to live close to wherever you work.
At least, that's why my broker is telling me that 30-40% off asking isn't going to fly.
what recourse...rent
"Is my own broker correct in that we can't go to the bank directly"
What is the state of California going to do? Arrest you for verbally relaying an offer to an officer of the bank? Worst that will happen is that the bank politely refuses and says that they (not you) are contractually required to deal only with the broker. The contract between the bank and their agent can't block you from speaking. There's some amendment somewhere protecting your right to free speech.
get a new broker.....if you insist on using the same nutbag..then...send a certified letter to the bank containing a notorized offering for the property. Find out who is in charge of this stuff at the bank, send a copy to every relevant name you can find. Or.. Threaten to sue your broker under federal wire fraud statutes that were passed in accordance with the recent TARP legislation. Tell the muppet they have 24 hours to respond before you have the charges filed.
kick him in the groin :)
I do like that location alot--great proximity to Equinox...not that you need it after walking up that hill!!!
Sticky,
If you really want the property, contact the bank directly. Be the squeaky wheel.
"Super prime" was the story brokers sold to get prices to skyrocket during the peak. So I guess the broker is saying that these properties outperform "prime" areas during a housing rally and also outperform on the way down. A free lunch. Even NYC brokers won't sell that nonsense. It'd be interesting to know what the broker thinks about the at least 3 other units that are/were Countrywide REO http://www.streamfx.com/CW/10-23-2007/REO-California183.html
Why not give Countrywide a call on one of these? Maybe a few more owners have dropped off their keys since the above list came out.
And not to hype the property, but Tracy Scoggins lives in unit 515. That should be worth an extra $50k!