Feeling uncomfortable with realtor. What to do?

Question

Hi BP,

First time home buyer here so pardon me if this is stupid. A little backstory here, we interviewed a handful of realtors with the same amount of experience, education, etc. but chose this person due to the fact that they were extremely easy to talk to. Fast forward, we found a house we were interested in that's been on the market for 120+ days and the realtor got us a showing. The realtor informed us that the seller was desperate to get it off the market because it's been sitting with no offers and let it slipped that the realtor knew them (the builder/seller) personally.

After expressing some interest in the price point, the realtor called us the next day informing us that the seller received an offer at the listing price. We put in our offer. 2 days later, we got a call and informed us of another offer the seller received at 10K more the listing price. Forgive me if I am acting on my emotions, but Im finding it very difficult to believe the coincidence that right after we saw the property, they received multiple offers.

Maybe I should trust my realtor? They are the professional after-all. Or is this some inside job because of the conflict of interest?

Please give me your thoughts. Thank you.

Russell Brazil · Answer

Just for perspective....I just had a listing on the market for 60 days. Within 24 hours last week, I received 4 offers.  What a listing agent does, is as soon as that 1st offer finally comes in, we are contacting everyone who had expressed even the tiniest bit of interest, and can if you are a good agent, usually shake loose another offer, or in my case 3 additional offers.

Lydia S. · Answer

@Mark Mo

Note that Realtors must disclose personal or business relationships with any parties involved, so he didn’t let that info slip by accident.  In NM we also sign a disclosure form ensuring all parties are aware of existing relationships and include it with the contract.

Charlie MacPherson · Answer

@Mark Mo I know it seems like a coincidence, but it just happened to me - twice.

Just yesterday I submitted an offer on a home that has been on the market for 254 days.  It's a serious antique that needs a lot of work.

We got a notification of multiple offers and my buyer responded by leaving the amount at the original offer, but waiving the home inspection.  We lost to another higher offer that also waived the home inspection.

2nd example - my wife and I are moving to Maine in a few weeks.  We went to see the home we now have under contract and bumped into one of the sellers.  We chatted for a bit.  She said that the home had been on the market all summer and got almost no traffic.  (120 days on market).  We were up against another offer - and in this case, we won.

So yes, it does happen.

As to the point raised by @Lydia S., disclosure of relationships must vary state by state.  Here in Mass, we must disclose when the agent is representing "kin", which is defined as blood/marriage relationships or a business partner.  We also must disclose when we are a principal in a transaction. Personal friends don't need to be disclosed as a relationship here.

Whether those offers are real or not will become obvious soon enough if you're in a state that discloses the sale price after closing.  In the meantime, make an offer that makes sense to you and don't let the pressure of competition make you over pay.

James Carlson · Answer

@Mark Mo

In general, I believe in listening to your gut. That said, here are some of my thoughts:

1. @Russell Brazil is right that many times one offer begets another. You can try to work around this by squeezing the acceptance deadline on your offer, so that they have less time to wrangle up competing offers. But as often as not, agents in Denver will ignore the deadline anyway or a too-tight deadline can be seen as pushy. Either way, it could very well be that they had two other offers.

2. If you are really worried, you could try putting an escalation clause into your contract. It's additional language that says your offer is X amount but that if there are other offers, you'll pay Y amount above the highest up to a maximum of Z. (Ex: Offer $300k but will pay $1,000 above highest up to max of $320,000.) And then you include language saying it's contingent upon your agent's receipt of the other, bonafide arms-length offer. Now, yes, a really shady agent could get another agent friend to create a dummy contract, but damn that's a lot of work, and I just don't believe many (or maybe any) agents would risk their license and livihood to try to squeeze out a few thousand for their client.

Good luck

Steve Vaughan · Answer

My first 3 ever offers were shopped, but by the listing agent.  I was offering solo.  I think your agent ran their mouth. Are they both from the same office?

That was 18 years ago and I rarely offer on the MLS and certainly don't use an agent ever when buying.

However, when I sell something significant, I hire someone like @Russell Brazil.  Not when selling a vanilla rental, which I sell FSBO, but when selling a primary or nice house or apt bldg.

Ed Emmons · Answer

Although it is not the excepted practice you can demand that you personally make the offer to the seller with the agent there. That way you’ll know if there are other offers. I have had similar things on many houses that didn’t add up.

Alex G. · Answer

The average realtor should not be trusted.  A couple of months ago we made an offer on an MLS-listed REO property that had been on the market for months.  The next day the listing status changed to "pending".  I asked our buyer's agent if the offer had been accepted and he responded: "no, there was another offer".  Shortly thereafter, our offer got accepted even though we never received a multiple-offer notification.

Theresa Harris · Answer

Some times that is what happens.  If you know there is another offer, put in your best offer and hope it is enough.  Do not overpay.  When I sold one of my places, we got an offer and was told there was another on the way that same day, so my realtor let both parties know we had two offers coming in.  The people that had put in the first offer (and low balled), immediately raised their offer to asking price and removed all conditions.

Dave G. · Answer

@Mark Mo

"Maybe I should trust my realtor? They are the professional after-all. Or is this some inside job because of the conflict of interest?"I have a low opinion of realtors in general, but those are serious allegations. Time to have a F2F with the realtor and ask them these questions. See where the discussion goes and then decide.

Feeling uncomfortable with realtor. What to do?

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