Seller agent is the Borrower

[paperasir]

Doing a home that is not listed in the MLS database.. According to a phone conversation with the listing agent, the seller did not want to go through process of showing and marketing. Fine. Then I look at the contract and realize that the seller agent is the borrower. The contract price is significantly below market value. I sent an email to the agent/borrower asking if the Seller was atypically motivated and asked him how he got to his valuation on the property. No response. Report the facts that the borrower is the seller agent and that the contact price is below market value, right? I cannot assume a less than arm's length transaction. Nor am I going to speculate in the report about the Borrowers motives, right?

 

[TerryRohrer]

Remember, NAR members follow a strict Code of Ethics. You don't have to assume anything. I would call it a non-arms length transaction. What really should happen is the agent should lose their license, but NAR (assuming they are members) and State Realtor boards doen't not enforce anything so they get a free pass to bilk their own clientele.

 

[glenn walker]

It's arms length unless the buyer is related. Im a broker sold 25 or more of our own homes all arms length but must disclose I as the seller is a licensed broker. The lender determines if buyer is related.

 

[Dublin ohio]

Out of curiosity how far below market do you estimate the deal is

 

[TerryRohrer]

It's arms length unless the buyer is related. Im a broker sold 25 or more of our own homes all arms length but must disclose I as the seller is a licensed broker. The lender determines if buyer is related.

In an arm-length transaction, both parties are looking out for their own best interests. How does an agent accomplish that while meeting their fiduciary duty to their client?

 

[paperasir]

20-25%

 

[glenn walker]

In an arm-length transaction, both parties are looking out for their own best interests. How does an agent accomplish that while meeting their fiduciary duty to their clientyou

You have no fiduciary to a buyer unless he's employed you to represent him. Then as a broker you would be dual agency.

But to just sell a property as a licensed broker I'm just like any For Sale By Owner and just because I'm licensed doesn't mean I'm giving the buyer any preferential deal or saving.

The only thing I'm saving is maybe a commission but Every For Sale by Owner saves the commission.

 

[paperasir]

An non-arm's length transaction can be for other reasons other than the two parties being related.

 

[J Grant]

Doing a home that is not listed in the MLS database.. According to a phone conversation with the listing agent, the seller did not want to go through process of showing and marketing. Fine. Then I look at the contract and realize that the seller agent is the borrower. The contract price is significantly below market value. I sent an email to the agent/borrower asking if the Seller was atypically motivated and asked him how he got to his valuation on the property. No response. Report the facts that the borrower is the seller agent and that the contact price is below market value, right? I cannot assume a less than arm's length transaction. Nor am I going to speculate in the report about the Borrowers motives, right?

The seller is selling it to themselves? (if the borrower is the seller _?)

Makes no sense, try to talk to the borrower directly - sometimes people have the same last name - but clearly if people sell to themselves or a family member it is not typical motivation and not an arms length transaction and the low sale price reflects that -

Appraise it for market value, and comment the terms/relationship is why the SP price is below the market value opinion.( I;ve done a few like that)

 

[paperasir]

The seller agent is the borrower, not the seller.