Listing/Selling Agent Ethics Breach

[g8rvet]

This is a long story but I will be brief....

We are relocating to a new state (Cincy, Ohio) - this is a corporate relo so everything is pre-set as far as commissions, paperwork, etc. The buyers agent we are working with is an acquaintance (mistake #1 on our part).

I have been unimpressed with her professionalism on our first trip to house hunt - but was willing to bite my tongue to keep the peace.

We found a house that was perfectly matched to our interests on a Sunday (and it was one that we had asked to see three days prior and she just 'forgot' about it.... until we reminded her...)

We go to the office on Monday to write up the contract - she tells us that there is another offer coming in so we write our offer for list price plus $500.... with an addendum stating that we would go $2000 over any other offer up to a max of $5000 above list. The home is a corporate owned property that went on the market two weeks prior.

The housing market in Cincinnati is not 'hot' right now and the other two comparable sales in the last year in that neighborhood all went for 2% to 7% below list price. We felt confident in our offer, as it also included 50% cash downpayment.

Pertinent to the situation -- our agent and the listing agent got into a BIG argument as our offer was being drafted regarding the commission paid by the listing agency. (Something about a typo on the listing agreement). Our agent seemed pretty pleased that she was 'holding the listing agency to their typo' and would get a larger commission as a result.

Our offer was faxed in Monday AM with an expiration date of Wed AM.... we received notice through our agent that the listing agent was going to wait for another offer that was to be submitted before sending them both to the seller at the same time, and I was like 'what the'? We send you an offer you turn it in! We were also notified that this other offer was being 'revised' when they were notified that we were also offering to buy the home... so again... what the?... why would someone REVISE their offer on a home knowing that another offer was being made at the same time -- unless you had inside information maybe?!?!??!

Long story short -- we were notified that our offer was not even *SENT* to the seller for review until TWO days after the sellers agent received it.... and that we were notified this morning that the other offer was accepted instead of ours.

We called the listing agent this morning and she told us that they accepted the other offer because it was 'higher'...

It is statistically IMPOSSIBLE in that market in that city... that a primary offer of 103% of the list price with 50% cash down was not the *highest* offer.

I am positive that the squabble between our agent and the listing agent had something to do with this, and that the selling agent either was providing information regarding the amount and terms of our offer to the other buyers or that she intentionally delayed or neglected transmitting our offer to the seller.

I know this sounds typical of the 'disgruntled buyer' story one probably hears daily. But I am convinced of ethical wrongdoing in this case.

How can I go about documenting this or discovering the facts? I do not believe that the other offer was 'higher' and I think the selling agent is lying to 'protect her commission' that was the focus of the argument with our agent.

I am not looking for monetary compensation and we have already found another potential home to buy -- but I am willing to take action against her license with the board if indeed something like this is true.

Does anyone have a suggestion where / with whom to start?

We have already fired our current agent and were assigned another through our relo corp.

I was physically sick at hearing the news we did not get this house this morning... in the back of my mind I had my suspicions -- but was hoping they would be false.

Thank-you for your time in answering,

g8rvet

[Duncan Pollock]

The problem -- as you hinted at the beginning -- was to use a friend.
However there's no excuse for her if she was -- again as you say -- acting as your Buyer Agent.
I'd show her no mercy. Complain to her local Board and have them read the riot act to her.
She's a disgrace to the industry and should be made to realize it!

Duncan

[judyo]

The selling agent seems birdbrained to have forgotten to show a property that g8rvet was definitely interested in. If you had seen it sooner would that have sealed the deal? There's no way to really know at this point.

Unless there was a specific time frame on the contract such as receiving an answer within 24 hrs. or such, the listing agent could have still held out presenting your offer, especially if they had an inkling another offer was coming in. I don't usually add time limits to contracts because if the seller wants to take more time they will anyway & it's back to you whether you want to continue with negotiations or not. If you really want a property & you're telling the seller this offer is null & void if you don't respond within 24 hrs. & the seller doesn't like that stipulation for whatever reason, it still didn't help you get the house.

The listing agent is working for the seller & the seller has every right to see any & all offers. If there was rumor that another offer was coming in that seller should have the right to wait for it. The seller risks losing a good buyer by doing so, but that is their prerogative.

It certainly doesn't seem "fair" but I don't think anything can be done except to stop working with your friend. That fight over commission could certainly have hurt the deal & your "friend" probably should not have mentioned it to you. However, any agent would have sought to straighten up differing commissions and what is offered through the MLS should be what is paid. It's easy to say wait until closing & then fight about it but I truly don't think any agent/broker would do that.

It was a very unfortunate situation. I would have told you that price isn't the only reason a contract is accepted, but you also had a huge down payment so that's another mystery. But if you were willing to pay full price up to $5,000 over, maybe someone else was willing to beat that. You probably won't find out.

[skipfactor]

we received notice through our agent that the listing agent was going to wait for another offer that was to be submitted before sending them both to the seller at the same time...Long story short -- we were notified that our offer was not even *SENT* to the seller for review until TWO days after the sellers agent received it.

I'm surprised the listing agent divulged that, usually they just sit on it. It's good that your buyer agent told you what's really going on; usually it's just "no deal". However, an aggressive buyers' rep would have perhaps threatened a broker call if the listing agent is waiting just prior to the expiration time/date to present the offer. The seller should decide how long to sit on an offer, not the listing agent.

I think 24-hour expirations are the way to go unless you know the seller is out-of-town or something. If a seller gets insulted by a 24-hour expiration, screw them; you can always write another offer when that one expires. Even better is to get your agent to try to negotiate a price verbally first, then start faxing contracts: "Hey, my buyer is in contact with me from a fishing boat in Brazil. Can we do a verbal, then he'll sign tonight when he's in port?". The offer is usually presented immediately, and the agents are much more likely to work out their squabbles when the buyer and seller have already come to a verbal agreement on price.

I'd bet the listing agent brought the other buyer/contract. She gets both sides and adjusts the commission typo without issue. She even drops it a little more to make your offer the actual lower offer.

[g8rvet]

Thanks for the replys everyone. I appreciate the insight.

We are now working with a new relo agent (unrelated and unknown to us previously) who seems 150% more in tune with us and reasonably competent.

She is in touch with the listing agent to follow up on the inspections, appraisal, etc. -- and if the contract falls through for whatever reason... we will be on it. But I am not holding my breath on this one.

The listing agent actually returned our phone call and when we told her that we were no longer working with our current buyers agent... she offered her services!

I backed away from that one very quickly... something about it just didn't seem right.

I currently have a call into the relo corp that owns the house -- I am not sure they will return my call as I am not a broker -- but there is always hope I guess. I would like to ask *if* our offer was even presented and if they might tell me why it was declined in favor of the other offer. I know I am reaching...


Thanks again for the replies.

g8rvet