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OT- Dealing with an unethical realtor

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apgoosebumps

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Sep 26, 2003
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My wife and I just sold our house for $790K. When the offers first came in our realtor told us we had 3 offers, a non contingent 790K, a contingent 780K, and another offer for 750K. Given the 790K offer was 40K over asking and non contingent, the realtor recommended we take that offer and we gladly accepted.

Long story short, we just found out the offer for 780K had a escalation clause stating they would beat the best offer by 5K all the way up to 830K. In the spirit of getting the deal done quickly for her benefit, our realtor never told us about this clause and never showed us the offer until recently when we discovered this happened. In addition we found out there was a 4th offer for 725K that was never mentioned which is illegal since all offers must be submitted to the seller.

My wife and I are happy we made so much over asking but pissed at the same time since we both feel we probably lost out on further gains since we didn't know about the escalation clause. It also pisses us off that our realtor is making a big commission when she acted this way. Does anyone have any advice on what we can do in this situation other than file a compliant against our realtor?
 
apgoosebumps said:
My wife and I just sold our house for $790K. When the offers first came in our realtor told us we had 3 offers, a non contingent 790K, a contingent 780K, and another offer for 750K. Given the 790K offer was 40K over asking and non contingent, the realtor recommended we take that offer and we gladly accepted.

Long story short, we just found out the offer for 780K had a escalation clause stating they would beat the best offer by 5K all the way up to 830K. In the spirit of getting the deal done quickly for her benefit, our realtor never told us about this clause and never showed us the offer until recently when we discovered this happened. In addition we found out there was a 4th offer for 725K that was never mentioned which is illegal since all offers must be submitted to the seller.

My wife and I are happy we made so much over asking but pissed at the same time since we both feel we probably lost out on further gains since we didn't know about the escalation clause. It also pisses us off that our realtor is making a big commission when she acted this way. Does anyone have any advice on what we can do in this situation other than file a compliant against our realtor?
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Simple question. Why weren't all of the Contracts submitted to you? You had the right to look at each one to assist in making an informed decision. Rather than relying on the Realtor, you should have insisted that you had the opportunity to review them all before deciding. Clearly, the $780,000 offer should have been reviewed, as given the escalation clause, it started at $795,000.

Complaints, either with the Manager of the office, or the Realty Board, don't seem to get very far. You might have a claim for damages, but unfortunately, the damages are speculative - a minimum of $5,000, but beyond that, truly speculative.

Meet with your Realtors Office Manager. If your facts are accurate, they may compensate you by reducing the Commission.
 
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#humblebrag
Im guessing you live in either Hoboken or summit/maple wood area. .

I would ask your attorney their thoughts.
Also, I would call her boss and discuss your frustrations and then file a formal complaint with the nj real estate commission (linked below). I filed a complaint a year ago against a realtor and they actually followed up and investigated.

http://www.state.nj.us/dobi/aboutdobi.htm#GenInfoRE
 
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How did you find out about the details of the contingent bid? I think your realtor did right by you because that contingent bid is so full of BS. This is not ebay. Did you go best and final with all those bids?
 
apgoosebumps said:
My wife and I just sold our house for $790K. When the offers first came in our realtor told us we had 3 offers, a non contingent 790K, a contingent 780K, and another offer for 750K. Given the 790K offer was 40K over asking and non contingent, the realtor recommended we take that offer and we gladly accepted.

Long story short, we just found out the offer for 780K had a escalation clause stating they would beat the best offer by 5K all the way up to 830K. In the spirit of getting the deal done quickly for her benefit, our realtor never told us about this clause and never showed us the offer until recently when we discovered this happened. In addition we found out there was a 4th offer for 725K that was never mentioned which is illegal since all offers must be submitted to the seller.

My wife and I are happy we made so much over asking but pissed at the same time since we both feel we probably lost out on further gains since we didn't know about the escalation clause. It also pisses us off that our realtor is making a big commission when she acted this way. Does anyone have any advice on what we can do in this situation other than file a compliant against our realtor?
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Quite disturbing, but not unusual unfortunately. I would, in this order.

1. Figure out what it is you want as restitution. Make it fair.

2. Go to the Realtor and tell him/her you are quite disturbed at what happened, that you are not going to just let this go away, and give them a chance to make it right.

3. If you don't get satisfaction, go to the Broker of Record, tell them what happened and see if he can make it right.

4. If you get no satisfaction, go to the NJ Real Estate Commission and file a complaint.

This is the kind of crap that gives other ethical Realtors a bad name.
 
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jtung230 said:
How did you find out about the details of the contingent bid? I think your realtor did right by you because that contingent bid is so full of BS. This is not ebay. Did you go best and final with all those bids?
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Escalation clauses are legitimate. However, the Realtor cannot make a decision on his or her own as to which Contract to accept. The Realtor can recommend or suggest which deal is the best, but it's the homeowner who has to decide.
 
Escalation clauses are not legitimate. Realtors can't share bids with other bidders.
 
apgoosebumps said:
My wife and I just sold our house for $790K. When the offers first came in our realtor told us we had 3 offers, a non contingent 790K, a contingent 780K, and another offer for 750K. Given the 790K offer was 40K over asking and non contingent, the realtor recommended we take that offer and we gladly accepted.

Long story short, we just found out the offer for 780K had a escalation clause stating they would beat the best offer by 5K all the way up to 830K. In the spirit of getting the deal done quickly for her benefit, our realtor never told us about this clause and never showed us the offer until recently when we discovered this happened. In addition we found out there was a 4th offer for 725K that was never mentioned which is illegal since all offers must be submitted to the seller.

My wife and I are happy we made so much over asking but pissed at the same time since we both feel we probably lost out on further gains since we didn't know about the escalation clause. It also pisses us off that our realtor is making a big commission when she acted this way. Does anyone have any advice on what we can do in this situation other than file a compliant against our realtor?
Click to expand...

So, if I'm reading correctly, you got $40,000 over your asking price on a non-contingent basis but are pissed off because you didn't have the chance to squeeze another $5000 by giving up the no -contingency? Your realtor isn't unethical. He saved you from making a dumb move. You should thank him.

And personally, given the first 3 offers, I wouldn't consider an offer $25,000 below your asking price a serious offer.

But you should have sold it yourself. You could have saved $30,000.
 
Contingent contracts are crap. You get locked in and the "buyer" gets to see if they can sell their property. If they don't get what they want then they come back to you to renegotiatie or walk. All of the contraccts should have been explained to you but staying away from contingencies is a good practice.
 
I assume the contingent contract was financing contingent. What if the house didnt appraise because it was so high above ask? Then the buyer gets out of the contract and you are back at square 1. Sounds like the realtor did the right thing.
 
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RUJohnny99 said:
So, if I'm reading correctly, you got $40,000 over your asking price on a non-contingent basis but are pissed off because you didn't have the chance to squeeze another $5000 by giving up the no -contingency? Your realtor isn't unethical. He saved you from making a dumb move. You should thank him.

And personally, given the first 3 offers, I wouldn't consider an offer $25,000 below your asking price a serious offer.

But you should have sold it yourself. You could have saved $30,000.
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Good luck doing an $800k FSBO in this market.
 
The only complaint you should have is that the Realtor totally mis-priced your house.
 
My god I've seen everything on this board now. Boo hop you sold your house for only 780,000. Can't wait until summer practice begins.
 
RUJohnny99 said:
So, if I'm reading correctly, you got $40,000 over your asking price on a non-contingent basis but are pissed off because you didn't have the chance to squeeze another $5000 by giving up the no -contingency? Your realtor isn't unethical. He saved you from making a dumb move. You should thank him.

And personally, given the first 3 offers, I wouldn't consider an offer $25,000 below your asking price a serious offer.

But you should have sold it yourself. You could have saved $30,000.
Click to expand...


If the realtor didnt convey the actual offer, what the realtor did is unethical, plain and simple. Doesn't really matter what everyone thinks the OP should have done. What matters is that he hired a realtor to broker the deal, and the broker misrepresented one of the offers.

Even if we want to assess what the realtor did, there is not enough information to know what the best choice was. If the mortgage is $1000 a month, and the contingency was a financing contingency where the buyer was pre-approved for the loan, then yeah, the realtor screwed him by not conveying the higher offer. Moreover, you are ignoring that there could have been a bidding war all the way up in that scenario, and the buyer could have netted an additional $40k or more.

I've said it before and I will say it again...the notion that a realtor represents you in any way is one of the biggest scams going. They represent themselves, and will do anything to close the deal quickly. They do not care how much the home sells for or what the terms are. They will always push you to do whatever will result in the most likely close most quickly.
 
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OP, what college did the realtor go to? This is essential in determining how we should proceed.
 
The process of buying/selling a home is such a cesspool I hope I never have to deal with it again. I'd rather go for a root canal.
 
Sounds like the realtor made the right business decision but not the wrong ethical one. OP has a legit gripe but I wouldn`t chase the punishment much further than letting the realtors boss know about it. My 2 cents.
 
Thanks for the replies everyone. We live in Denver where the real estate market has really taken off due to a large shortage of houses so people here are making large offers on houses.
Agreed, we should have asked to see the offers. When we heard 40K over asking with no contingencies in addition to the appraisal being waved, it seemed like the best offer by a long shot. On top of that, our realtor seemed trustworthy so we didn’t even think to question the other offers. Lesson learned!
In my mind, we would have never accepted the contingent offer over the non-contingent offer, but we probably would have gone back to the buyer and asked them to up their price given there was a higher contingent offer on the table.

Once the sale of the house goes through I plan to call the realtors of all the people who made offers to see if I can gather more info on what our potential would have been.
 
Don't think it's an ethics issue. Realtor did everything right by you. Sure, he or she should have fully disclose all the bids but are you hurt by the fact that he didn't tell you about the 725k bid? Did your realtor ask all parties to go best and final? Trust me, I've dealt with some Shaddy realtors before.
 
RUchip said:
My god I've seen everything on this board now. Boo hop you sold your house for only 780,000. Can't wait until summer practice begins.
Click to expand...

So, in your world, what's the cut-off price where people are no longer allowed to care that their realtor was unethical? Obviously, it's lower than 780K. But how low is it, really?
 
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You got "over" asking price and you are not satisfied! I think my Realtor is napping not working. Would be happy as a pig in sh*t if my guy did this for me! You definitely fit in with the mentality of a lot of posters on this Board. WOW!
 
RUJohnny99 said:
So, if I'm reading correctly, you got $40,000 over your asking price on a non-contingent basis but are pissed off because you didn't have the chance to squeeze another $5000 by giving up the no -contingency? Your realtor isn't unethical. He saved you from making a dumb move. You should thank him.

.
Click to expand...

#realmiddleclassproblems
 
superfan01 said:
#humblebrag
Im guessing you live in either Hoboken or summit/maple wood area. .

I would ask your attorney their thoughts.
Also, I would call her boss and discuss your frustrations and then file a formal complaint with the nj real estate commission (linked below). I filed a complaint a year ago against a realtor and they actually followed up and investigated.

http://www.state.nj.us/dobi/aboutdobi.htm#GenInfoRE
Click to expand...

I wonder if the guy that bought it was the same guy that posted a few months ago that he could buy any house in Morris County?
 
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Getting over ask just means that the realtor mispriced it. That would be my only problem with the realtor.
 
My advice is to take it as a lesson learned, be happy you got 40K over, and move on. People can offer whatever they want, but would the mortgage company have approved the loan? no doubt the realtor should have told you about the other offers. But in the end, its not worth fretting over what could have been.
 
apgoosebumps said:
Once the sale of the house goes through I plan to call the realtors of all the people who made offers to see if I can gather more info on what our potential would have been.
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Honestly, what's that going to do besides get you pissed off? And who's to say the other realtors aren't shady themselves & will blow smoke up your ass about the deep pockets their buyers had and how you left thousands of dollars of commission for them on the table by taking the other "lowball" offer?
 
I don't see how you can be pissed at all when you NOW decide to look into all the paperwork and get the details on the offers. You chose to put all of your trust in the realtor so why question it now? Decision was made already, don't look back.
 
RutgersUnion said:
I could argue that it was priced perfectly. Generated a lot of foot traffic and multiple offers.
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This is what it was intended to IMO - around here, there are a lot of new listings appearing on the market that have a listing price lower than the estimated market value (they're calling it as a "restrained price" and it's lower by 10% or so) but generate a lot of interest + bidding wars and in the end, the seller gets more than what they desired in the first place.
 
That's only if you want to sell it fast. But it puts a cap on your property because people are not willing to bid more than 10-15% above asking. In this case, the 780k bid would've bid 830k instead of the escalating clause. I went through the same process two years ago.
 
jtung230 said:
That's only if you want to sell it fast. But it puts a cap on your property because people are not willing to bid more than 10-15% above asking. In this case, the 780k bid would've bid 830k instead of the escalating clause. I went through the same process two years ago.
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That's a preinternet mentality where buyers didn't really have access to closing prices and it wasn't as easy to see everything currently available. Its much more common now to get high offers right off the bat.
Also consider that the best offers will come in the first week or two. These days when a listing sits for a long time buyers start to question if something is wrong or its overpriced.
 
jtung230 said:
That's only if you want to sell it fast. But it puts a cap on your property because people are not willing to bid more than 10-15% above asking. In this case, the 780k bid would've bid 830k instead of the escalating clause. I went through the same process two years ago.
Click to expand...
Someone I know who sold their condo recently got about 8 bids in a week with the highest around 25% above their desired value after listing it at 10% below market value.YMMV on the city/neighborhood but an increasing number of realtors in the Boston area have started using this tactic.
 
KT71 said:
You got "over" asking price and you are not satisfied! I think my Realtor is napping not working. Would be happy as a pig in sh*t if my guy did this for me! You definitely fit in with the mentality of a lot of posters on this Board. WOW!
Click to expand...
--------

Still, the agent should let the seller know of the offer with the escalation provision.....the agent could then strongly suggest to take the slightly lower, solid offer......if the seller wants to ignore the advice and something goes wrong, so be it.......but still you should tell the seller, not making the decision yourself
 
Maybe if it's a lower price point you could get higher premium but I would be worry about appraisal when it's that high. I sold my place in Hoboken in 5 days at full asking after getting 6 bids. I interviewed 6 brokers for the listing and there was one that wanted to push for this strategy. His list price was 15% below where I sold at. I could have ended up at the same price but why risk that. If people are willing to pay FMV why price it under the market and chance it? You only have downside.

I'm not saying you should list it higher than market but pricing it 10% below market just doesn't make sense to me. There are better ways to drive traffic.
 
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