Buyers agency agreement. R they really looking out for me?

Question

I am trying to purchase a 4 plex with an agent I have a buyers agreement with.  I have placed two offers on this property, neither have even garnered a counter.  Asking price is 255K.  I offered 235K the first time.  That offer expired and then the property was taken off the market.  A few weeks later I told my agent to write the second offer at full price with contingents I get to see the units and the financials as part of the contingencies.  This full price offer got no response either!.

In talking to my agent I found out that this seller has a number of properties that he wants to 1031 into a large property but they have not identified the larger property.  My agent has a 14plex he is trying to sell and divulged to me he would like to get this seller to buy that as part of the 1031.

I  told my agent with this new information the price is not the issue, the timing is the issue so I am no longer in at the full price.  I can use the sellers desire to sell a package of properties in a relatively short time as my leverage to get him to come down on price.  My agent said he did not feel the seller was hard up to sell so he would not come down as he has a few buyers ready to go if I do not buy this.  I asked so why then has he not sold them? If he had to he could but a 90 day close contingency to buy him some time to ID the larger purchase and then do the exchange??

My suspicion is that my agent is playing both sides.  He has a buyer (Me) and a potential larger price property this seller can 1031 into.  I had looked at the property myself but it did not fit my analysis.  I think He needs to buy time to help sell the other agents properties and I suspect he is keeping me on the hook for this 4 plex while he and the agent sell the other units.

Basically, I suspect collusion despite having a buyers agent agreement.  This agent and me are fairly good friends and I really hate thinking this way but my suspicion is I am being strung along.  I have even suggested that I am at the next presentation of any offer I make just so I know my interests are not being leveraged in some way as I think I was here.

Comments?

Derek Faller · Answer

Like Steve Babiak said the buyer's agreements are designed to protect the real estate agent. Though they are usually pretty easy to get out of if you end up not liking the agent you are working with. The agreement isn't required and I usually don't make people I am working with sign one unless I start investing a substantial amount of time working for them showing them tons of houses. If the agent won't work with you unless you sign the agreement then find another one. There are no shortage of real estate agents out there.

Jean Bolger · Answer

It's possible your agent is trying to line something up for himself, but it's far more likely that the seller is actually fidgeting around about his 1031 exchange. Depending on the number of properties he has it could get very complicated- it's bad enough when you have just one. He may be just starting out the process and testing the waters, not REALLY ready to sell yet. The good side of that is that once he does find a replacement property he'll be eager to sell, and willing to cut a better deal.

Oddly enough, just because a property is listed doesn't mean the seller actually wants to sell it. I had one property I was looking at- the seller's agent finally pretty much admitted that the seller had it listed (at a quite inflated price) just to appease his wife; She wanted him to get out of the rental business!

I'd just keep looking, don't fixate on that one property.

Neil Hauger · Answer

Let me say I am suspicious of all sales people.  I am one.  I know it may not be intentional but when money is involved....

My agent is a great guy and a good friend so I suppose I need to consider this more my issue.  The fiduciary responsibilities are same here in wisconsin.  But, when people are involved...

Charles Morgan · Answer

@Jean Bolger it works the same way in Texas. Selling agent must present ALL offers unless seller provides him/her with written instructions to ignore specific offers, EG. under a specific price.

Buyers agreement in Texas is a legal document requiring the agent to be fiduciary (clients interest above all others) to the buyer, however proving that the agent  acted wrongly may be very difficult.

Jean Bolger · Answer

@Neil Hauger  I don't think there is an actual meeting where your offer is presented, so there's not some event you are being excluded from. The agent just sends a form  w/ the conditions of your offer to the seller's agent. I do know that (at least in Colorado) the sellers agent is obligated to present all formal (i.e. written) offers to the seller- meaning they can't just say "Oh why bother, they'll never accept that".

Steve Babiak · Answer

A buyer agency agreement protects one person - the agent. I have posted many times that you should not sign any exclusive buyer agency agreement.

Now, you might have one in place that just covers this one specific property. Then you move onto another property, and even another agent. But if presented with another buyer agency agreement, be sure to limit it to just some very specific property address; do not get into an exclusive agreement.

The agents in the forum won't like this post, but ... they are looking at it from their perspective.

Neil Hauger · Answer

Jean, thanks for the reply.  I think it is a  bit of both.  Just frustrating to sit back and let this happen as I am a person that drives my own business and I feel I am forced to turn this portion over to someone else.  Have you ever attended, or demanded to attend the meeting where your offer is presented?  This is not the norm but is the only way I can see keeping my interests up front.  My fix is to get my own license which I am.

I will move on to other properties if need be but to find a property that works has been tough.  And I am not interested in buying out of state to find a property.

Good investing!

Buyers agency agreement. R they really looking out for me?

Most Popular Reply