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Is this Realtor unethical?
I'm an Associate Broker in Syracuse, NY and this happened to me last week: I submitted and offer for a condominium on behalf of an LLC. The agent called me back and countered. My buyers accepted and we signed the deal. He asked me for the LLC paperwork listing the LLC members. I sent it to him and he sent me the signed contract. Two days later I get an e-mail from the sellers attorney disapproving of the deal (the seller and attorney are related). I call the agent for an explanation and get no response. Neither did my clients attorney when he called the sellers attorney. The natural thought here is they got a higher offer. Problem is the unit is still active. I write up a new, all cash offer and submit it. I get no response from the agent. After 24 hours I call him. He doesn't answer but texts me he's on a listing appointment, couldn't take my call and informs me the attorney was supposed to send everyone a letter. Ten minutes later I get an email from the sellers attorney stating he disapproves the cash offer. My client informs me he had an unpleasant interaction with this agent recently (my client owns a local fence company). I believe this agent violated the code of ethics when he didn't present my offer "objectively" as required in the Realtor code of ethics. This home is still active on the MLS. Should I file a grievance against this agent with my local board?
Hi @Thomas Tarry, welcome to the BP forums, and I'm sorry its under these terms :(
Without any further explanation from the agent and/or seller's attorney it seems like a grievance is the most reasonable step. They MAY be engaging in unethical behavior, or they may be incompetent as many in our profession are, but either way more needs to be known here and the local board may be the most adept as sussing that out.
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I'd talk to the agent's boss. The offer was accepted.
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Once the signed offer or counter offer was received by the Seller, you were under contract. They can't reject the offer after that point. I think you should contact the state governing board and file a complaint.
I suggest you stop trying to purchase this condo because they do not sound ethical.
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@Nathan Gesner NY has a built “attorney review” period where they can cancel a signed contract, I believe for no reason whatsoever.
@Thomas Tarry You have no grounds for anything here, with what you’ve presented, just speculation. An owner/owner’s attorney rejected your offer, end of story.
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Originally posted by @Wayne Brooks:@Nathan Gesner NY has a built “attorney review” period where they can cancel a signed contract, I believe for no reason whatsoever.
I had to go research that and discovered you are absolutely correct. All my years and I've never heard of such a thing. It's hard to believe anyone wants to invest there. Hey, at least the taxes are high!
NY should still have an attorney review period, so its really moot. I wonder how many States do or don't have an AR...
Meanwhile, I agree that you don't have any hard proof of anything to go to the local Board. Was this "bad experience" somehow documented? emails? texts?
My client did not return several phone calls. I’m open minded when people say I have no case here but this is a terrible way to conduct business. Fortunately for me this is a long time, volume buyer that I represent. I believe the listing agent is not being objective. And I have no idea how he got an attorney to go along with him.
When the attorneys are heavily involved there are often communication problems and very little efficiency or urgency. I do not see what evidence you have that your offer was not presented by the agent. Its a crazy market right now, you were probably just outbid.
I am in the middle of a grievance process right now. There is so much more involved than just reporting them to a board - the burden will fall on you to prove something was done wrong before they will even move towards any hearing. I don't see how you have anything to move forward with. Best to just move on, and remember that attorneys name for next time you run into him.
Hi Minna. I never said he did not present my offer. They accepted our offer and both parties signed the contract. Once he saw my clients name on the LLC paperwork the transaction stopped. The condo unit is still for sale. The agent clearly didn't want to sell the unit to my client. I feel he did a disservice to his client.
I think its a real stretch to assume the agent somehow blocked the seller from accepting the best and highest offer because he personally did not like the buyer. In highly competitive sellers markets like this one listing agents get accused of sinister dealings ALL THE TIME, when the truth is there was just a better offer out there. If there was a lawyer approval period, that gave the seller X days to still consider other offers and back out of yours for any reason at all.
BTW This is why I don't even allow those contingencies on my contracts at all.
@Minna Reid this home is still for sale! There was no other offer. I assumed when I got the attorney disapproval there was another, higher offer. Not the case. The condo is still on the market, 45 days and counting.
45 days later? Sometimes I forget to change a status for a day or two - not 45 though lol. Even if what you suspect is actually true I still don't see where you have enough for a grievance.
@Minna Reid you may and probably are right but I think it’s a terrible way to do business. He let a personal interaction he had with my client interfere with his fiduciary responsibility to his client.
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@Thomas Tarry are u sure it was the realtors personal interaction with the client? And even if it was he could still be acting in his clients best interest or under their direction. There are plenty of people I wouldn’t trust to make good on an offer. Maybe your volume buyer is one of them?
@Jonathan R McLaughlin my buyer is a cash buyer. The transaction stopped dead when he saw my clients name added to the contract. We had a deal when we accepted their counter offer and one of my buyers( this is a two person LLC) signed the contract along with the seller. He asked that all members of the LLC sign the contract so I had the other LLC member sign as well. Once that name went on the contract everything stopped. I wouldn't buy a bottle of water from this agent.
Im not sure I see the issue here. Was the offer presented? Yes, because it made it to the attorney for review. The seller can choose who to sell to, and who not to sell to as they choose as long as that decision is not based on inclusion of a protected class. An individual who gets into disputes with the listing agent is not a protected class. They dont have a unilateral right to buy the property just because they want to. Your client got into a dispute with someone, and unfortunately it came back at a later point and bit him in the but. It happens, but there is clearly no ethics violation in the information you have provided.
@Russell Brazil Russell, I politely disagree with you. My client got into a dispute with the agent for the seller, not the seller. The seller doesn't know my client. The ethical breach is not acting "objectively" when presenting the offer. Our NAR code of ethics calls for us to act in the best interests of the client, not take revenge on a buyer. The agent brought a personal bias into the seller/client relationship. He is not looking out for his clients interest. He's settling a personal vendetta.
@Thomas Tarry It sucks for the seller, if the agent is not selling because they didnt get a good fence, or whatever the issue, the seller wants to sell and you have a buyer, should be simple.
@Thomas Tarry during Attorney review period the seller, or buyers attorney can "not approve", thus cancel the contract with no reason given. I've had to do it myself on the seller side, for reasons I won't go into on here, but that is how it is. If either attorney disapproves during the review period the deal is dead regardless.....
@Thomas Tarry - we are not supposed to disparage other real estate professionals because it makes all of us look worse. Realtor and unethical should not be used together.
Three useful thoughts about what you can do:
1. Have a second buyer llc purchase the property in cash or credit and sell the llc to the desired llc members. You may consider referring the whole deal to another (newbie?) agent in your office.
2. Provide your buyer with the info to send a handwritten letter to the sellers mailing address (maybe not the property- wherever the taxes go to) and re-offer the cash offer. Make sure they are an exclusive buyer agency contract with you for any individual member of this llc buying this property.
3. Use direct mail or social media marketing to find an equivalent good deal on a different condo in the association or nearby property that will also meet your clients needs.
There are three sides to every story. One side. The other side. And the truth. I’ve agreed with a contractor to do x scope of work by y date for $$ price and gotten screwed. Fence not straight. Poorly constructed gate. Unagreed to change orders adding $$ and pressure to pay them. (I had a drywall guy leave all the corners undone and walk off the job. Cost me $$$ to finish). If I ever saw that contractor around again, I would tell my client that this contractor is poor quality and/or unethical and that I do not recommend doing business with him because of previous violations of trust / reputation. Then the client can do what they want and I will support them with the transaction.
Originally posted by @Wayne Brooks:@Nathan Gesner NY has a built “attorney review” period where they can cancel a signed contract, I believe for no reason whatsoever.
@Thomas Tarry You have no grounds for anything here, with what you’ve presented, just speculation. An owner/owner’s attorney rejected your offer, end of story.
Same thing in Illinois - a signed offer is functionally NOTHING until attorney review is over, which oftentimes doesn't happen for weeks. An "offer" is more of just a good-faith agreement to proceed among the parties. No reason for cancellation is usually given, its simply and email from the attorney: "I hereby terminate the Contract on behalf of Purchaser pursuant to the Attorney Review provision and the Professional Inspection provision set forth at Paragraphs 10 and 12 of the Contract."
Very irritating for both the buyer and seller agents, but nothing you can do if the other side isn't willing to talk.
Originally posted by @Thomas Tarry:@Russell Brazil Russell, I politely disagree with you. My client got into a dispute with the agent for the seller, not the seller. The seller doesn't know my client. The ethical breach is not acting "objectively" when presenting the offer. Our NAR code of ethics calls for us to act in the best interests of the client, not take revenge on a buyer. The agent brought a personal bias into the seller/client relationship. He is not looking out for his clients interest. He's settling a personal vendetta.
But lets flip it around. If your client acted poorly in the past, and the agent has knowledge of it - IE maybe your buyer previously submitted multiple offers on properties and then after acceptance cancelled for no reason other than he wanted to buy a different property, I'd say that as a seller's agent that would be HUGE insight to give the seller. A good seller's agent knows the flakes in the marketplace (both buyers and agents who represent them or represent unqualified buyers) and will properly advise their clients as to that history. In the end the seller can choose to ignore it or move forward with the risk anyway. But as the list agent, they aren't obligated to "sell" your offer to their client, rather they have an obligation to act as a fiduciary to THEIR client alone by providing them all of the available info/experience.
@Matthew Olszak I’m not sure how this particular transaction was irritating to the listing agent. I believe he knows why this transaction didn’t come to fruition. Me and my buyer clients are the only ones that don’t know. I’m lucky that I know this client well. Imagine if I didn’t and having to explain that I don’t know why the sellers attorney disapproved the deal. Whatever it was it also affected the seller. Her condo is still for sale.
Just have someone else buy the property and they immediately resell it to the LLC. Could even set up a different LLC and keep the one name off until after the purchase.
@Matthew Olszak Matt none of that applies here. I have represented this client for 3 years and he’s never backed out of a deal. He is a cash buyer that never asks for contingencies, ever. He didnt return a phone call(s)this agent made to his business. And now the DOM’s are racking up on this agents listing. Makes no sense.