Unethical Real Estate Agent?
Q: My wife and I recently found the home of our dreams. It's a new construction and the owners are also the builders (it was to be their retirement home, but they are now building a better place for themselves elsewhere). After looking at the house for the 2nd time, and after asking some questions of the seller's agent, we were very close to deciding on whether or not we should proceed, when the seller's agent calls us and tells us that he had just received an outside offer and was wondering if we'd like to make a competing offer with him representing us as buyers. Feeling extremely rushed, yet realizing that this was most likely our only chance at getting the home, we decided to say yes. He tells me that the only way we have a shot at getting the house is to make a full price non-contingent offer. I questioned him about this since he knew FULL WELL that our current house was not even listed, and we needed to sell it before making a down payment on a loan. He replied that this sort of thing is done all the time and is fairly standard. Now I fully take the blame for being ignorant at the time of what "contingent" really means, but I trusted his judgment and assumed he was doing the best thing for both us and the sellers he also represented. My wife also trusted that this was the right thing to do. You should also know that we are currently living in our 1st home, and therefore have never sold a home before. We both assumed (wrongly as it turns out) that "non-contingent" simply meant that the seller would know that the financing is contingent but that we were CONFIDENT that our house would sell before closing on the new house. To cut to the chase, the sellers turned down the other offer and accepted our offer instead. Hooray! ...or so we thought. Our house went on the market, and everything seemed great UNTIL a few days later the sellers (who are EXCELLENT people and we get along with them very well) called us directly to tell us that the agent had basically lied when he presented them with our non-contingent offer. Which of course, as it turns out is absolutely true - our house has not sold, and our financing depends on the proceeds. So I completely understand why the sellers were furious with the agent. We explained how he convinced us that a non-contingent offer was the only way to go, and the seller agreed that we were not to blame. The agent claims he did nothing illegal, which is probably true since it was my wife and I who signed the offer as "non-contingent" - regardless of whether we did so purely on his advice. But it doesn't change the fact that both buyer and seller were misled in different ways. The WORST part of it is that he (and his boss) later claimed in a conversation with the seller that it was WE (my wife and I) who conceived of and initiated the non-contingent offer. This attempt to make us look bad in the sellers eyes only serves to confirm the agency's desperation and lack of morals. In our opinion, of course... Because of these breaches of trust, we are now seriously considering using a different agent, and the seller is desperately trying to figure out how to get out of using this agent. Fortunately, they still very much want us to buy the home. Possibilities for them are continue using the agent (unappealing), find a different agent within the same real estate company, or (possibly) use our inspection contingency as a way out of the deal, then write up a new offer using a different agency altogether (not sure how that would work). Trust is, or SHOULD be, everything in this type of transaction. I'm still shocked at the mess this has become out of such a seemingly simple, yet entirely selfish breach of ethics by this agent - who was obviously trying to get a bigger slice of the pie by representing as many people as possible. I'd love to hear any similar stories, advice, or views from real estate veterans.
A: -I hope you don't buy this or any other house without FIRST retaining an attorney. Your statement above best illustrates your lack of understanding of real estate transactions. You need the professional protection you will get by retaining council. Otherwise you will continue to be easy pickings by a fast talking salesperson. -Whenever entering any contract to buy or sell a house or even leaving a deposit, always include the statement "Subject to my attorney's approval". This will allow you to back out should the attorney find something in the contract or agreement that could hurt you. -Oh boy.... your lack of real estate knowledge or lack of the english language (if English isn't your primary language) really got you into a mess. I hope the sellers don't sue you for non-perfomance since you can't comply to the terms you signed to. My guess is they won't for a couple of reasons. I agree with you that the sellers must be excellent people because if I were them and you signed a contract that read "non-contigent" when you really didn't have the means to comply with it's terms would make me "mad" with you. I also agree with others that maybe an attorney on your side might be good advice. If this transaction is still viable (contingent or non-contigent), I'd make sure you don't deal directly with that agent either by having your own agent or own "REAL ESTATE" attorney. Also please do yourself a BIG favor and read about real estate terms and general practices from a book in the meantime. It will help you to ask the RIGHT questions to achieve your goals. And yes, I've own / owned / carried paper on many homes and hold a real estate brokers license. Currently I'm not in practice but I was formerly. Sorry if I sound like I came on strong here but I am surprised how people put so much trust in someone who they don't really know and involve so much money they can't afford to lose. I wish you luck and success however it turns out.
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