Can "B" Buyer list on MLS for "C" while A & B is being Negotiated?

Question

I am trying to determine the best way to locate "C" buyers for short sales I am purchasing in Florida. I have the capital and sellers (SS) but I am curious to know if I work with a realtor will this increase my end buyer traffic. My question is, if I am the investor (B) and submit an offer to seller (A), while the property is 'pending' and the bank is reviewing the offer, can I list with a realtor to locate end buyer (C)? If so, would I have to work with the same realtor who would act as my buying agent in A - B but then my listing agent in B -C?

Nick J. · Answer

Michael, its best to list with the same realtor that is listing for the seller. The trick is to get them before they're plastered all over the MLS. What I do is have my team of agents get a property(short sale) under a listing agreement and NOT list it on the MLS. I then come in represented by the same realtor as the buyer and submit an offer. I'm able to re-list the property for a profit simply because I require it as a condition of my offer, here is exactly what my contract says(copied and pasted from my contract) [b]â€¢SELLER hereby grants the Buyer and or their representatives all of the necessary rights to immediately list for sale, market, negotiate and enter into a contract to lease or sell immediately to a third party for a profit. All documentation in connection with the foregoing will be made available at the request of all Lenders, Sellers, and Buyers involved in the transaction.[/b] of course, a disclaimer, I am not an attorney nor do I play one on the internet so use that phrase at your own risk. Once the seller agrees(they usually will) I have the same realtor re-list it for me on the B-C side. That listing is the listing that gets planted on the MLS. make sense?

Nick J. · Answer

Bill, I certainly don't mind you playing devils advocate. One could argue many different variations of many different things involving real estate. Regarding your main concern of fiduciary duties, its quite simple. The Realtors that are on my team know me, my business and my team. They know it is in the the sellers best interest to work with me simply because the realtor knows I have the success and ability to close on the transaction and like smitnlit said, if I can't make it happen, I back away and allow A-C to transaction. My interest is actually in the making sure the seller is taken care of. I require my team to continue to work for the seller at my expense to make sure the A-C happens if I can't profit from it. Need more clarification? The realtor knows I'm good for it regardless of what the lender agrees on (which is what matters regardless, not what the sellers want in regards of the offer price, it's not their choice, it's the lenders to begin with) The realtor can look the seller in the eye and tell them I am their best bet because I won't hassle and haggle like a retail buyer trying to get my FHA or conventional lending lined up and I won't nitpick about a broker cabinet drawer. Instead of having to deal with a retail buyer, it is a done deal when my name is on the contract. Get it?

Bill Gulley · Answer

Actually, No, this is marketing for the sake of justifying the Realtor taking what he sees as a done deal, not the highest and best price. And, unless the lender signed the listing, the Realtor does not work for the Lender. And it is never, never, never up to a Realtor to determine what the best deal is for a seller, I'm sorry, that is steering, another issue! The Realtor advises the client but does NOT determine the sale price to take or the best deal, there is a difference. Let's look at the reality of realty here, the agent wants to get paid, they want a sure thing, that's obviously your deal, But that does not cover the fact that a Realtor, unless they are instructed otherwise with specific requirements, is to bring all offers to the attention of the client. There is clearly other motivations at play here since the Realtor does a bunch of deals with you as opposed to one deal with that listing client! I did not take this to this level and did not mean for this to lay blame at the foot of any of your Realtors! A Realtor has many of the same responsibilities to their client (who signed the listing agreement) as does a CPA, attorney or a doctor for that matter. My comments were never directed at how you or any investor conducts this startegy or business. Clearly the investor has no obligation mentioned here. The Realtors who may read this do understand the point, and very clearly I'm sure. As they have had to be tested on this issue and sit through hours of ethics classes to keep their license. At least I did as a broker. . Realtors have to walk a very thin line much of the time. If there were two Realtors doing a tag team on these deals, there would be no issue, which was my original point. This is clearly a situation where the servant has two masters. I personally know agents and brokers who have been sued over these matters and lost! That's why I brought it up. NCIS is on, gotta go, have a good one! Bill

Nick J. · Answer

what, no votes? C'mon........I thought that was certainly worth some votes :)

Bill Gulley · Answer

I think that's what Nick is saying Michael. Nick has it down pat and that works for him where he operates. To answer you question of what I did, it was very simple, since I don't do deals I can't drive to in an hour, I have a buyer in place, or at least in mind, before ever getting involved for that flip. Nick, I bet people get tired of me playing devils' advocate all the time, but I hope it adds to the posts but in my area. Realtors are really operating under very strict conditions, the brokers are really trying to avoid all kinds of liability. So, Ponder this: If I were a listing agent for the seller my duty is to the seller. How can I advise by client in the A-B transaction with even a pending listing at a higher price with B-C? I can't, I may not know who C is, but I would have to tell my client that there is a buyer out there willing to pay a higher price! If I knew who C was, I'm really in trouble. Now, as the listing agent/broker, I would need to move into a dual agency relationship, but I can't act in a dual agency with either party while having another agency relationship with them on the same property! All this is to say that, if I had a listing agent and they did that with you as a buyer, my agent failed to act in my best interest and I could ask them to make up that deficiency. OTOH, with your disclosure, that you were selling for a profit, my question would be to my listing agent, why can't you perform in your listing agreement to bring me the highest viable offer instead of my buyer? My agent is in deep again! Just some thoughts......Bill

Bill Gulley · Answer

Hi, No! Unless you have an equitable interest established in and to the property. For example, a Realtor may list a property with someone who is purchasing a property under an installment contract as they have an equitable interest and the ability to provide good title. While having a contract to purchase a property may establish an eqitable interest to a property you have no equitable interest in the property, not until your deal closes. Now, can you find a Broker that would do that, maybe you can. But what happens if your deal does not close and the Realtor finds a buyer? Where would that put you in a listing agreement? Many Realtors, if not all, can always look for a buyer even if the perfect house is not yet on the market. They can't show it or advertise it, but they could say "I have a client who is expecting to list this darling little house with 3 bedrooms and two baths in the school district you desire!" So why go there? Bill.

Caleb Whitney · Answer

Yeah, this is why when I "recruit" any new Realtors, I make sure they know that thy can only be involved in one transaction. I am setting up multiple other Realtors that I will send the B-C listings to. I'll switch back and forth so it's even.

Maryann L. · Answer

We do it the way Nick does. Right in my purchase and sale it says I can market the property for sale. If for some reason we can't get the price we want or can't get it to close, we may have to back out and go A-C directly, but that rarely happens. My acceptance of C's offer states it's contingent upon sucessful negotiation and approval of a short sale.

James Ward · Answer

Yeah, that's it in a nutshell. Michael, Since you are in Florida, you will need to structure the deal exactly as Nick has pointed out. I highly recommend getting one(1) deal and completing it entirely. That way the Realtor sees you know what you are doing and vise versa. Plus, once you have completed that deal, you can use them not only for your deals, but get them to bring you deals.

Clifton Burse · Answer

Great info Nick, I need to talk to you more when I start SS in Maryland..