Realitor in the way?

Question

No offense to any agent... I went to an estate sale and found a few nice things. I then asked about the house itself. The organizer of the sale didn't know much other than an heir’s name. I found the trustee and went to visit her. She said the house would be for sale yet it was not listed yet. The trustee also gave me the agent's name and broker name. I asked if she was going to sell through MLS and she wasn't sure but apparently an agent was on it. After some small talk she found me a better alterative when I offered to buy the house cash as is. Thus, no need for inspections, appraisals, realtor commissions and waiting periods. She liked the fact that I would buy cash and we close in 5-7 days. So what about this realtor? If we sign a buy sell contract and go to title, is this realtor gonna mess me up?

J Scott · Answer

First, if the brokerage agreement has already been signed, there's a good chance the seller (the estate) is going to owe a commission, so be prepared for the seller to have to pay the commission and factor that into the equation.

There's also the issue of what you offered on the property.  The agent's job is to try to get the seller the most money possible, and if your offer is well below market, the agent's job is to let the seller know that and to let the seller know they can get more for the house.  Ultimately, it's the seller's decision on whether to accept your offer, but if the agent thinks it's a bad deal, they can certainly get in the way and try to stop it from happening (which in many cases is right thing to do).

Last thing, because this is a probate sale, there is likely a trustee who has to approve the sale.  They will order an appraisal, and if the appraisal comes back at significantly above the sale price, there's a good chance they'll kill the deal as well.  Again, their job is to protect the seller (the estate) and won't let someone take advantage.

Account Closed · Answer

Arcinio:  IMO, you need to clarify the situation with the trustee/seller.  And don't contact the agent at this time.  Did the seller enter into a listing agreement, or were they just thinking about it and have a preferred agent?  If the trustee signed a listing agreement, then they (not you) need to communicate with the agent about accepting your offer, or paying a commission or canceling or whatever.  I suggest that you don't insert yourself into the relationship between seller and agent until you are sure of the details.

Sharon Vornholt · Answer

Arcinio - You need to learn how to work with agents. They will bring you pocket listings at times. That's kind of like burning down the bridge that you use to get home because you don't want to pay the toll.

Sure they might be owed a commission, but just factor that in when you make your offe.r If the seller makes the commission an issue, I have just lowered my offer before and paid the commission out of my funds. Everyone nets the same amount but in the seller's mind, they got out of paying the commission.

Arcinio Arauz · Answer

Thanks for your replies on this. I found that there are both great agents and lousy ones. Some of them only know things like "counteroffer" and nothing else.

David Johnson · Answer

This is  interesting. Since real estate law varies from state to state what is accurate in one may not be in another. As an agent, the broker I work with will not let us use anything other than an exclusive right to sell contract. So in this situation if the contract was signed then the sell would owe the full commission. Other brokers in the state will use other contracts and depending on the terms a commission may not be owed.
We only use the exclusive right to sell contract to protect our investment. As an agent I have to pay for all the advertising and other expenses.

Natalia B. · Answer

I say the agent is too late. If the house is not listed, then go for it without the agent. The agent will have other listings, don't worry about him/her.

Anthony P · Answer

Rick Harmon,

How do you bulletproof your deals, so that the seller is obligated to perform?

NA Foster · Answer

Hey Rick- You said,"As for the deal, I generally bulletproof my deals to obligate seller.to perform."  Please explain and show how. Many thanks

Rick H. · Answer

I think the facts need to be restated for clarification:

@Arcinio learned about the opportunity via an estate sale (furnishings, collectible, etc.). He spoke to the trustee, which presumes that he's dealing with a trust, NOT a probate.  If so, only a small handful of trust sales are made pursuant to court order in CA.

As for the deal, I generally bulletproof my deals to obligate seller to perform.

As for agent and their brokerage commission, what value have they added to this transaction?  I say zero.  If the have a contractual agreement and the property has already been listed but this has not been disclosed to buyer, then I say commission is seller's problem to deal with.  If the buyer is also an agent/broker, he may have an ethical dilemma but if he's acting as buyer/principal there's little chance of a claim of tortious interference.

I've been a broker and have been licensed for over twenty years but I'm not very sympathetic to agents who don't contribute anything to a deal.

J Scott · Answer

If you want the buyer to pay the commissions instead of the seller, that should be stated in the contract.  If you just raise the offer price to include the commissions, that doesn't need to be stated.

Realitor in the way?

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