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Ethical? Realtor / Purchase question.

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Pittsburg_22_m

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Feb 3, 2004
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Kansas
My friend called me up earlier today to tell me his offer was accepted on a house he wanted to buy. It is for a home in southern California. Bank foreclosure, on the market for 4 months, list price of $265,000. He offered $209,000. He didn't think it would be accepted and was willing to go up in price but was pleasantly surprised when the Realtor called to let him know it was. Told his wife, family, etc. He got an inheritance recently and was putting $60,000 down which is about half of the inheritance (after taxes, yada yada).

Anyways he calls back 6 hours later after the agent called him to tell him that his offer was not accepted and she was mistaken. She said there were two people with the name James (is that like an extremely rare first name in Cali?) and it was the other James. Then she told him that he could outbid that offer and he asks how much. She replies....full asking price.

I am not a Realtor nor do I have any close friends that are. Is this something unusual (maybe trying to squeeze more cash out of him?) or do you think it really was an honest mistake?

I have no clue either way what to tell them other than call a lawyer or the department of real estate so I appreciate the advice!
 

Couch Potato

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Doesn't sound right to me. Likely the agent is trying to cash in on a good deal.
 

TJSum

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Agree with CP. It sounds like a higher offer came in right after they accepted your friends offer. How could the agent get the two "James" mixed up, did the other James offer the same $209,000? I am sure during the first call the agent confirmed what the accepted price was, so this confusion excuse does not float.
 

Couch Potato

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Likely the higher offer was from the real estate broker.
 

leelansford

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Illinois
Regarding the supposed counter-offer: I'd like to see something in writing from the seller.
 

Pittsburg_22_m

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Kansas
What is generally acceptable in terms of requesting documentation or proof? Is there anything about the situation that should be referred to the State licensing agency or an attorney? Obviously I'm not asking for legal advice or providing him with such but merely opinions by respectable honest people that I have received good advice and answers from in the past.


Prior sales price of the property were $364,000 in 2006 and $294,000 in early 2007. Of course that last price may be what the bank bid at auction. I don't really know how it works out there but that is how it is out here in the heartland.
 

moh malekpour

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California
I agree with Lee. A real estate purchase contract has to be in writing and be signed by the seller to be enforceable. A verbal counter offer by the agent doesn't make sense.
 

Hamlet

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Ohio
Brad,

Is your friend using his own Realtor? I assume not, he is probably using the Realtor who is representing the bank. This is what people do not fully understand when dealing with dual agency. The agent at that point really can be nothing more than a paper shuffler and cannot fully represent either side in a dual agency.

Anyhoo…have your friend make a complaint to the real estate board. The documents in question should be signed by both parties and are probably sent either email or fax and are date and time stamped. The Realtor has to keep a file and keep all these offers in order.

In the future, your friend should get his own Realtor to represent his interests only.
 

Pittsburg_22_m

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Feb 3, 2004
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Certified Residential Appraiser
State
Kansas
It is the Realtor representing the bank. The property is in Victorville, CA. I assumed already they would be looking out for the bank but I would've thought they would've never communicated that an offer was accepted but instead reported it rejected and open to offers. I really doubt that the issue was a matter of first name identity and bid amount confusion. I've come to the conclusion that it was likely accepted, someone walked in wanting it and willing to offer more so they backed out in order to raise the price and their commission.

Personally my opinion on the whole matter is he shouldn't buy that house no matter what. He and his wife fell in love because it was roomy with enough bedrooms for the kids and had a great price. I thought it seemed silly as it is an hour drive every day with already long hours in the armed forces and will be 2 hours once he transfers soon. 4 hours on the road per day, he says no biggie, he is used to it, but i say live as close to work as you can (hence why I am an appraiser with a home office .... :D ). Another issue altogether but I don't think its the worst thing in the world to happen.

I always have trust issues when it comes to Realtors. I've had several attempt to deceive me on houses they were selling. When I was buying my first house I had a Realtor squeeze a few thousand more out of me because my dad (who is an appraiser and should know better) admitted that he didn't think the seller would accept the amount but we could move up if they didn't. Same Realtor 2 years later tried to squeeze me again. I placed an offer on a house listed for $69,000 for $65,000. Pretty typical and should have been accepted. Rejected, full price only. I offered full price if they paid closing costs. Rejected, full price only. They finally sold the house a YEAR later for $60,000. Sure you could rationalize that the Realtor was only following orders of the buyer but the buyer inherited it from a sister (I know them) and there should always be some wiggle room in an asking price. Plus Realtor's get paid on commission and I have trouble trusting salespeople in general. :)

I'm half joking and mean nothing personal, because just like anything there are great and then there are Skippy's. Some you hate to deal with, some are great to deal with and some are helpful, honest, and excellent sources of information.

Ah, probably a little lengthy but report writing has given me a headache this afternoon so the break was nice. ;) Thanks for the replies, guys (and gals)!

If there is anything else you want to add, please do!
 

Hamlet

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Ohio
Brad,

I’m a Realtor too, but I won’t hold your prejudices against you!:flowers:

I don’t know about CA laws, but in Ohio, an agent must present clients with an agency agreement that explains the agency relationship. If the agent represents both sides of the transaction, this is dual agency. Dual agency means that the agent has the same responsibilities to BOTH clients. That is why I suggest that anyone buying real estate that is not licensed themselves to obtain their own agent. This will ensure that the agent is working only on their behalf and at the fullest level of responsibility without cloud of client confidentiality for the other half. In Ohio, the seller pays the commission, so it doesn’t cost the buyer anything to have their own agent. Agents (and cowboys) are like anything else, there is the good, the bad and the ugly.

BTW, anytime a real estate deal falls through, people think it is the end of the world and they will never find another house the like as much. It usually turns out that they find a better house and a better deal in the long run.
 
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