Sketchy Real Estate Agent?

Question

I'm looking at a deal currently with someone I've known for years (the seller). They signed with an agent and are fully exclusive currently. The seller and I have been talking about mutual interest in a deal, but the house hasn't had any showings yet. The agent heard that we had been talking about a potential deal, and seeing the house before it starts showing at the end of the month and she told the seller to stop talking about prices and that we couldn't see the house until it was showing at the end of the month. Is this sketchy? If so, any advice on how to handle a situation like this? We were hoping to get a deal done before it hits the market to avoid a bidding war.

Joe Norman · Answer

I don't think its this agent's job to come to the transaction with an "investor mindset" - s/he is representing the seller after all and should always be looking out for the seller's best interest.

To the OP's question about "is the agent being sketchy" I don't think we have enough information to answer that question. On the surface no, s/he is not being sketchy but rather just protecting her client and her license. Most MLS agreements say that a house that is listed exclusively with an MLS subscribing agent (i.e., almost every single licensed real estate agent in the country) can not be shown to potential buyers until it is listed as active in the MLS and is available to all MLS subscribers to show/see. If she knows that the house is being shown and doesn't do anything about it then she could risk violating her subscriber agreement, getting hit with a big fine, and/or loosing access all together.

That said, she could have sketchy motives and just be trying to "get a higher commission" - but its very likely that her motives are aligned with the sellers in terms of getting the best deal possible. Just because those motives aren't aligned with your motive as an investor (trying to an exclusive contract for under market value) doesn't make them sketchy. It just means you might have to work harder to communicate with the listing agent to find a win-win.

Joe S. · Answer

It’s not a sketchy agent. It’s simply a conflict of interest between your goals and the agent’s goals. You want to buy it at a good buddy discount and the agent wants to sell it at the top of the market.

Nathan Gesner · Answer

Not sketchy at all. The agent has a responsibility to sell the home for top dollar. And in some states, once the property is marketed to one person, it has to be marketed to the entire market. That means any conversations the seller has with you regarding sales price could be a violation of the law.

Joshua McMillion · Answer

@Trevor Praetsch

At the end of the day, the seller is communicating with you, and as long as he or she does not violate the Fair Housing Law, in my opinion, it's okay. My guess is the agent wants the home to hit the MLS, enter into a bidding war, and sell at the highest price to receive the best commission on the deal. That's why it's important to find the right agent with an investor mindset, not a seller mindset.

I hope that helps, and here is another BP forum with a similar question.

https://www.biggerpockets.com/...

Sincerely,

Josh

Joshua McMillion · Answer

@Joe Norman

I agree with you. I should have been more clear, meaning as the buyer it is important to have an investor minded agent. You said it best, “win-win”. If you have a investor minded agent representing you, in my opinion, as the buyer that is the best way to establish effective communication with the seller/ agent.

Sincerely

Josh

Jonathan Greene · Answer

To be honest, it's you who is trying to get a sneaky deal, not the agent. The agent is protecting the seller's best interests, which in almost all markets, for almost all properties right now, is on the market, fully advertised to the most buyers. You want a "friend" discount early which is not in the seller's best interests unless there are difficulties with the sale or other anomalies that you are willing to take on, and even in that case, they could probably still do better on the market unless you are willing to pay up early so it doesn't hit the market.

Too many people try to push the blame onto agents. You are just trying to get a good deal for yourself, which is fine, but don't make it like the agent is being sketchy for representing the seller's best interests.

Bruce Lynn · Answer

The agent has a fiduciary duty to the seller to sell for the highest price with the least risk.   So they are advising their client in the right way....to avoid off market deals before publicly exposing the product to the full market and therefore maximizing the price.

Joe S. · Answer

On second thought it could be your friend is blaming it on the agent ,because they do not want to give you a good bubbly discount. LOL

Trevor Praetsch · Answer

Great info, thanks everyone for helping with other perspectives.

Josh C. · Answer

I’m on the other side of the fence. Seems crazy an agent told a seller they couldn’t show the house to a friend. I’m assuming this is a real friend and not some person you actually don’t know well. Why does the agent have to be there at all? Just go over to your friend house and check it out. The agent’s job is in the best interest of the seller and if you and the seller come to some agreement they broker should help coordinate that. The job is do what the seller wants and advise, not to decide what’s best for the seller.

Now if this really isn’t your friend and you need help to see the house from the broker then yes you’ll likely have to wait due to the MLS requirements.

Sketchy Real Estate Agent?

Most Popular Reply