An open ended study: Realtors & Off Market Property Ethics

[Account Closed]

My buddy, Joe, who is an investor was shown this off market property in DC and he inturn showed it to me. We subsequently entered into an JV agreement to pursue it. Apparently, He had a relationship with this broker and the broker referred him to an agent. The agent, John, was the one who initially showed him this off market property.

After I viewed the property with Joe I spoke with John on the phone. I specifically asked John who he represented. HIs answer was the he represented neither the seller or buyer and was doing each a favor. Then I asked how and if he was getting paid. John stated the he was forming a new relationship and was hoping that Joe would buy and list with him in the future.

Well since this happened, John wants to be the buyers agent becuase the Seller got uneasy working with John and hired a listing agent. John also said he and Joe agreed he would have the outsale listings. Joe says this never was agreed to. The seller does not want to pay for the realtor fees and wants us (me/joe) to up our offer in order to cover the costs. Additionally, we have yet to sign a brokers agreement with John.

Here's whats got me really stuck on how to proceed, John wont send our offer unless we show proof funds or a preapproval letter. This is not a requirement in DC that I know of. Am I somehow stupid and thinking that you cant have a noncontingent contract in DC??? The approvals are easy enough but I always leave "contingent upon finacning" in my agreements for good reason.

If anything, my partner might be obligated to work through the agent but, I am not. Because my frustrations are running so high I am thinking of going directly to the seller. I RARELY do this but this seems to be one of those cases. I mean who wont send the offer?? I'm all for being ethical and trying to do the right thing even if it costs me a little bit of money to save face but, I've had my fill.

We're so far giving up a lower purchase price, a portion of realtor fees, now I have to use a closing company and were 3 weeks into this but, no closer to a ratified contract! The seller wants 60 days to close because its coming out if his fathers estate and this pushes me into the summer before I have building permits. This means at best I'm going vertical after site improvemens by July/Aug and get a C.O. by December. WTF.

For the record let me say all players are personally good people its just business and money working its magic.

Who thinks I should stick with the realtor? Save face, preserve my buddies reputation with this broker and my name as well. Maybe, I need to cool off as I'm being unreasonable and hot headed.

Who thinks, just get it done. If you aint first your last. To bad the realtor never got their brokers agreement in order beforehand. That I should go directly to the seller?

Who thinks walk now. If its difficult now its only going to get messier with this property?

This should be interesting.