What Happened? Slippery or inept RE Agent?

Question

More a rhetorical question.  But a story to remember ... for me at least.  We had been following a house in a very nice part of Mt Pleasant for 4-5 months as the price declined from $800,000 to $695,000.  Nice dock, funky house, needed $40-50,000 rehab ... suited us well: a buy, rehab, live in project.  Well, we had planned to go up to $650,000 so started with an offer of $640,000 but the agent told us it was way too low ... and did not want to present it.  We reminded her it was her duty to present written offers.  She did and the seller came back with a counter of $690,000, I suspect he was influenced by the agent.   We interpreted the counteroffer meant the owner was not anxious to sell at our price, so we told the agent to contact us IF the owner decided to lower the price ..., and that we had an all cash offer funds verifiable now.  I have owned 8-9 SFH rentals, have 2 strip malls and am partners in 3 apartments so I have some, though not extensive experience.  As expected, 2 weeks later they lowered the price to $675,000.  We gathered our cash together to again offer the $640,000 all cash when  we realized it had gone under contract immediately.  We called the agent and she said she didn't "think" we were serious so didn't call us.  I slowly realized she was a real estate agent moron.  What agent doesn't want 2 buyers bidding on their listing?  OMG.  We found out 6 weeks later it sold for $605,000.  The moral of the story is the "offer-counteroffer" format with the selling agent sitting in the middle is flawed.  This agent lost her client $45,000 and herself around $1,300 ... or maybe more if we got into a bidding situation.  We learned that if you put that much time following a property you must stay on top of the seller's agent.  She/he may be totally incompetent.

Nathan Gesner · Answer

It's a shame you lost it but it's water under the bridge now.

There are two things you could do in the future to avoid this:

1. NOTE: I just realized you are an agent but I'm leaving this paragraph in for the benefit of others. Use an agent. I'm just guessing based on what you shared but it doesn't sound like you used a licensed agent to present your offer. A buyer's agent doesn't cost you anything, it adds a layer of protection, and they can act as your advocate. In this case, they would probably be able to find out if the Seller's Agent was incompetent or verify that your offer was presented properly. And a good agent would likely give you the next two suggestions.

2. Prove yourself. The original offer should have included proof of funds. The Seller's Agent didn't think you were a serious buyer so my guess is they didn't even know whether you actually had the funds. You could have also included  short cover letter describing your purchase power, your other investments, etc.

3. Add a contingency stating you want to present the offer in person. This works well when you suspect the agent is not presenting your offer properly. You don't have to do this face-to-face but can at lease work out the opportunity to speak by phone and ensure the Seller clearly understands your offer. After the offer is made, then the Seller can talk with their agent privately. If the agent refuses to allow this, call their Broker. In my state, agents are required to submit the offer as written and can't deny you the audience.

Russell Brazil · Answer

A) You have no idea what price the property went under contract at, just what it sold for.  The contract price may well have been above what you offered, but was subsequently lowered due to inspection or appraisal issues.

B) If you want to be taken seriously when making offers...use an agent, and a good agent.

William Tong · Answer

Thanks Christopher.  Our initial offer was written. But we were not ready to jump ... you are right.  And you are also right that if done correctly, the agent should only help the process.  You are an agent:  would you walk away from a possible all cash buyer just because you had an offer in hand?  Do you always say one serious buyer is enough?  Isn't competition good?  Or must the selling agent present the offer without contacting other previously interested buyers, of course without discussing price?  Is that, in your opinion, unethical?    In the end Christopher, it is clear we did not communicate our position clearly and will be more diligent in the future.

Christopher Phillips · Answer

@William Tong

There a couple issues here...

One. Your offer wasn't in writing with proof of funds. That means you're not a serious buyer. Verbal pitches over the phone are pretty much meaningless.  A Realtor does not have an obligation to present a "verbal" offer or a verbal counter-offer, since verbal offers are not binding.

Two. Not sure why you had to wait two weeks and gather cash. You either have the cash or you don't. You should also never let two weeks go by with zero contact if you really want the house. You didn't follow up. Your offer wasn't in writing. That means you weren't serious.

Four. Final closing price isn't relative. You already said yourself that the property needed rehab. By the time people get through inspections and other issues the price is going to come down. At the end of the day. Homes sell for what a buyer is willing to pay. It's not the agent's decision.

William Tong · Answer

Thanks Nathan, Charlie. It is water under the bridge but I just wanted to whine and figured there might be constructive criticism available @ BP.   Not sure how I got to be an "agent" perhaps some mistake between myself and BP software.

I like the idea of requesting an in-person presentation however some agents are very protective of their clients.  In what form would you have provided the proof of funds since I don't have an entire $650,000 in cash but rather in mutual funds, etc ... all available within a week or so.  I don't like to give out actual statements.  Charlie, I wouldn't press charges or sue anyone over something like this however I will look into it for my own edification.

Thanks again.  There is another "deal" around the corner and maybe I will be a little smarter.

Charlie MacPherson · Answer

@William Tong The only valid argument to be made for her being "slippery", (if by that you mean dishonest) is that she brought the buyer and double-ended the deal.

Since you're an agent, you should be able to find that out easily.

If she double-ended it I would consider taking action through whatever means you do that kind of thing in SC.  Here in MA, it would be a complaint to the Board of Registration in Real Estate.

If she didn't double end it, then she's not the sharpest knife in the drawer.

Either way, you might contact the seller to see what they have to say about it.

What Happened? Slippery or inept RE Agent?

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