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Hi all,
We are buying a condo from a seller who has already moved across the country. She bought high and is trying to get more out of the home than it's now worth. It was originally priced $269. We offered $259 with the seller repainting and fixing a few small items. Our agent told us she agreed to our price but without the painting, etc. Fine, right?

Now that the appraisal is back low ($234) our agent just told me the seller never agreed to our price, she actually countered $262 and he decided to put some of his commission toward the cost to make the deal work.

But that's not what he told us. If we had known the seller refused to lower the price, we would have had more insight into what she would do with a low appraisal.

Did our agent break any rules by telling us the seller agreed to our counter offer but she really didn't?

Thanks for your help!

I'm not understanding your area practices. In my area, a written offer is made, a written counter offer is made, usually an appraisal clause is included. Were any of the issues you discussed in writing? Any changes during this process are in writing and signed by each party.

Sorry - let me try to be more clear. We wrote a counter offer for $259 and the seller declined it. Our agent did not tell us it was declined. Instead, our agent lowered his commission to give the seller the difference between what she wanted and what we were offering to pay.

Our agent then told us the seller agreed to $259 and didn't mention he lowered his commission to make the deal work.

Yes, your agent had an obligation to tell you the exact status of the negotiations. He/she lied by omission and I would not trust the agent to be truthful on anything else. At this point, I advise you report the agent to his/her broker and ask for a different agent to represent you.

The replacement agent can help you proceed with negotiations on this property and/or help you resume your home search (presuming that the seller is unlikely to agree to sell at $234k).

It's so frustrating because if the seller wasn't willing to lower the price by 3k, she's not going to lower it 24k. And if we had known how firm she was on the price, we wouldn't have proceeded with the inspection and appraisal that we have to pay for. Seems my agent is a loser.

quote:

Originally posted by linkybo:
If we had known how firm she was on the price, we wouldn't have proceeded with the inspection and appraisal that we have to pay for. Seems my agent is a loser.

That's an excellent point. I recommend you tell the agent's broker this and ask to be reimbursed for your out-of-pocket costs. He/she may decline (especially if you don't let the agency first attempt to negotiate on the $234k), but it's worth a try.

Do you have a signed contract in place?

I think if it was not illegal, it was certainly unethical. I would first go to your agents broker with bills for appraisal and home inspection in hand. Explain to the broker what happened and request reimbursement from the agent or the broker. I don't know where you are or the real estate laws and rules, but I would never have my buyers order an inspection or appraisal until we have a signed (both sides) contract in place. A contract is a meeting of the minds. It says you both are in agreement to the price and particulars of the sale of real estate. It doesn't sound like you and the sellers had a meeting of the minds!!

Was this Your agent? Or was he working or the seller? I do hope one thing - your loser agent loses his job and his license for this.

What I find most interesting is that the agent was willing to give away 3/4's of her part of the commission to make this sale happen.

I think our agent should at least reimburse us for the appraisal. We wouldn't have moved forward if we knew the buyer was unwilling to negotiate. And even stranger, our agent just offered to take no commission and apply all of his commission to lower the price for us. Why would he do this? It still feels like he broke a rule by misleading us about the true sales price.

And yes, this is OUR agent, not the sellers agent. He had both the seller and us sign the contract stating the agreed purchase price was 259, with no mention of him kicking 3k to the seller.

He's trying to buy your silence by giving you all his commission toward the purchase price. He knows he messed up badly and wants to keep you from reporting him to his broker.

My advise is to decline and proceed to speak to the broker.

This agent is not YOUR agent if they represent the seller. She/he may be a transactional agent. Depends on the real estate laws of that state.

What does the fully executed contract say? Do you have a copy? Sounds like you don't understand as maybe the deal was not explained to you fully. Was there even a meeting of the minds?
It is not illegal for a Realtor and co broke Realtor to reduce their commission to make a deal work. . The commission agreement is between seller and agent, and thus co-broke agent. However that change needs to be initialed by parties on the contract.

The real problem is the appraisal. Sounds like a dead deal unless the seller is willing to come down to the appraised price. Certainly I hope you are not planning to pay the difference.


I would call a private meeting directly with the broker of record for the Real Estate firm immediately. Explain the situation as you understand it. The Broker's duty is to investigate and try to resolve. Hoping he can explain the apprasial process and market to the seller for RESOLUTION IN THE SELLER ACCEPTING THE LOWER SALES PRICE (APPRAISED PRICE).

Hopefully this resolution will bring you to closing..with a lower sales price!! Good luck
seems on your side.

This message has been edited. Last edited by: real estate lady,

"linkybo," First, welcome to the Real Estate Boards and, secondly, what is it that you are trying to find out and what is your goal? I've read the entire thread - several times in fact - and am still confused?

Just a few observations here: Did you ever see, read and sign a written agreement re the purported offer/counter-offer resulting in the $259K BEFORE you proceeded to hire an appraisal and inspection? You say you did so what makes you so convinced that there was a "kick-back" involved of 3K OR that knowing that would have made a difference when the appraisal came back so low? That one, I don't get. Has an inspection actually been done? How much have you ACTUALLY paid out of pocket to date?

Yes, going solely on what you have said, your agent should reimburse you for the cost of the appraisal BUT it seems to me that you are concentrating so hard on the trees that you are missing the forest.

The appraisal came back lower and that puts you in the cat-bird seat - use that information to achieve what you want to achieve - a mutually agreeable contract between a willing seller and and willing buyer. Not sure why you think that your agent's failure to disclose discounting his fee has put you in a worse position than you would have been had he/she not done so...

Color me confused - I think there is more to this story than has been told.

Hi Idaho Resident,
I guess my goal is to see if our agent actually broke a rule and should be held responsible for the appraisal and inspection we paid for, or if he's just a bad example of a real estate agent.

I have an agreement signed by both the seller and myself stating the selling price is $259 and an email from my agent saying "the seller has accepted our counter offer of 259k." After the agreement was signed, we proceeded with the inspection and let our bank know we were proceeding wtih the loan, so they ordered an appraisal. The inspection was around $200 and the appraisal was to be paid for at the closing so I don't have the exact amount.

When the appraisal came back low, our agent forwarded it to the seller with a request to lower the price so we could finance without putting down additional money. She refused to consider the appraisal and said she was not going to lower the price. We suggested possibly a compromise in the price and she said no.

Our agent tried to convince us to just pay more, the condo was probably worth more than the appraisal, but the difference was 24k, quite a bit. Then our agent emailed to me "When we countered back at $259K, the seller actually rejected that offer, so I offered to reduce commissions by 1% in order to move the football the final few inches over the goal line."

He didn't offer to me to reduce his commissions. He offered to the seller. He never told us she rejected the offer of $259k and he never told us he was reducing his commission and giving her the difference in price. Had our agent told us the seller was unwilling to negotiate down just 3k, we would have had much better insight into her perceived value of the condo.

Thinking the seller had agreed to our offer, we then continued with the inspection and appraisal after the contract was signed for a purchase priceof 259k. With NO mention anywhere of our agent giving the seller money.

If our agent had told us the seller was unwilling to take less than 262k, we would have been warned that a low appraisal would have been met with resistance. As it was, we assumed she was agreeing with us and would be reasonable if the appraisal came back low.

Does that clarify?

As REL suggested - make an appointment with the broker. If your real estate contracts are similar to the ones we have in SC - you can walk away and get your earnest money refunded because you are not able to obtain a loan as specified in the contract and I would insist on the agency paying for both the inspection and appraisal. The cost of the appraisal would be part of your loan package and unless you have a forgiving bank you will have to pay the costs associated with getting to the point you are in the process.

The agent sounds like he is desparate for a closing at any cost! Perhaps the condo is worth much more than the appraiser claims, what is important at this point is what the bank thinks it is worth.

Good luck and let us know.

This message has been edited. Last edited by: Charming,

In our area it is not really that unusual to see agents negociate commission to help put a deal together.

Your purchase agreement -between you and the seller- is for the 159,000. I do understand what you are saying about moving forward, but the commission is an issue between a) the seller and the listing broker b)the listing broker and the selling broker. I doubt that the agent has run into a buyer being upset by him/her reducing their commission to help the buyer get the house they wanted and the seller get the price they wanted.

I doubt seriously that your agent was "just trying to throw" a deal together. Most agents I know do this to help their buyers/sellers get the deal they want. Your agent had you as clients if it wasn't this house then another.

But, I am certainly going to share this point with agents I know...fact is I've believed for a long time some are far too generous for their own good.

Lake -- It seems to me that, on the issue of the realtor giving up part of his commission, Linkybo's concern is that the realtor's actions made the seller appear to be willing to negotiate. In actuality, this was not the case.

This affects Linkybo because, as you know, negotiations don't necessarily end with the signed offer but can continue following the inspection report, the appraisal report, etc.

Had Linkybo known the actual facts of the negotiation, he/she may have decided not to proceed with the offer by expending money on the inspection and appraisal.

The realtor unilaterally took Linkybo's options away from her by obfuscating the facts. In this way, the handling of the commission is not a material issue only for the realtors, brokers, and seller.

Jewel,

As I stated, I understand what Linkybo was saying and I understand her position. Which was exactly why I said I would share her position with some agents I know-- who have done this exact same thing.

I was simply explaining to her how her agent might have been looking at it and providing an explanation as to why it would not have appeared on the PA.

Not every action an agent takes is self serving, illegal, unethical, etc. Sometimes agents forget that this is business and become attached to clients to the point of considering them friends. So sometimes agents very quietly make grand gestures that can come back to bite them. Which was it in this case? I don't know...I wasn't there.

quote:

I do understand what you are saying about moving forward, but the commission is an issue between a) the seller and the listing broker b)the listing broker and the selling broker.

Hi, Lake - My last post was inspired by your statement (above), particularly use of the word "but". As I understand it, using "but" or "however" or other mitigating terms typically negates what comes before in favor of the verbage that follows. Good to hear your clarification and that you understand Linky's concerns, if not support her position.

Let us know what happens, Linkybo. We're always here to help!

Lakelark and Jewel, I've been enjoying your various posts and think you both have added to this discussion in a very positive way! Thanks...

Think many potential buyers here - both active and lurking - have gained some valuable information throughout this post. Myself, I'm still wondering IF the OP has finally figured out to quit worrying about the rules/ethics of their agent (there will be plenty of time LATER to address those concerns) and, instead, concentrate on the opportunity they have been given??? NOW is the time for some serious negotiations when the ball is in their ballpark!

Hi,
Thanks for your thoughts and support.

When we countered $259 and our agent told us the seller accepted our offer, she actually told our agent she would under no circumstances go under $262k. (he told us this when we gave her the appraisal that was low.) he made up the difference with his commission and didn't tell us she was done negotiating.

Now the deal is dead because she is unwilling to even consider the appraisal. She's determined the condo is worth $259, even with an appraisal and seven comps saying its worth $235. We plan on talking with the broker regarding the $580 for the appraisal and $275 for the inspection.

Thanks for everyone's input!

Good luck! Out of curiosity - where do you live. That is a pretty steep home inspection fee compared to my area.

Jewel- Thanks I see what you are saying, poor choice of phrasing on my part.

I actually do think that the agent should have discussed with Linky how the deal would come together and their thoughts on it.

Idaho- Thanks.

We live in Sammamish, WA, a suburb of Seattle.

Bottom line - the house didn't appraise out. The seller wasn't willing to sell at the appraised price and the buyer wasn't interested in paying over the appraised price - that's what it sounds like to me - Dead deal - move on!

A reduction in commission is not a kick back!
The commission is changed on the contract via signed addendum or initials by parties. Where there is a sellers signature there is a buyers' signature or initials. You would know. I still feel you didn't understand the contract or it was not fully explained to you.If this agent is your agent her job is to get you the lowest and best price and that involves pulling COMPS(SOLDS)
so you don't overpay!

Now here's a BIG problem in our business... the inspection comes first 200 to 400 for the buyer, then that process is over, then here comes the appraisal 400-500. Boom ..all that money out the window if the house doesn't appraise out. There has to be a better way. I remember when appraisals were 200- we need a new law to bring price down.That's another issue!

Here's what I would suggest.. go to the Broker if you want to try this scenario... your Realtor sold you a house excessively over price/ result.. spent inspection and appraisal fees for nothing.
Did she pull comps... who knows...but maybe not! Worth a try..ask for all.. maybe they'll re-imburse half.

Change Realtors.

This message has been edited. Last edited by: real estate lady,

Linky did you see the comps, how many homes did you look at prior to offering for this one? Did you offer more based on negotiating price after the appraisal? If not then you felt/feel the house is worth what you offered...why not ask for a second appraisal or a review of the appraisal? There is a very real possibility that the appraiser is wrong.

I have a feeling that the deal MAY HAVE BEEN based on what the seller wanted and what the property was listed for.

Comps are key. Start there.

If the appraiser appraised the property 30 something thousand under comps..may call for a review. You paid for the appraisal-where is your copy. Look at the comps- are they in the immediate neighborhood? What adjustments did they make to the comps compared to the subject.
You can review your appraisal with the broker - he will tell you what happened.

Any Realtor who does not review comps for their client is doing them an injustice in my book.
Smart Realtors do their homework and doesn't waste their or their clients' time, efforts,and money.

Get answers.

This message has been edited. Last edited by: real estate lady,

We live in a planned development and it has a section that has condo's in it. These are the condos we have been watching for years as we tried to convince my mom to move here. We are intimately familiar with the neighborhood pricing and have watched our own house drop from a high of 1.1 mil in 2006 to 750k now.

The condo owner purchased their condo in 2006 for 390k. It had just been remodeled with hardwood floors, updated cabinets, ceiling fans, new appliances. We worried that the seller had overpriced the unit, but if the appraisal came back close, we were willing to buy.

There were 4 comps from the same condo development. Since this unit was upgraded beyond builder specs, the appraiser added 15k for quality. Two of the comps had two bedrooms instead of three, the unit we were buying has three. A 1k allowance was made for the bedroom difference but the value was based on $/sq ft, so the adfitional sq ft was accounted for.

The other units were from a bigger condo neighborhood about 2 miles away and were comparable, recent sales.

Our agent said the appraiser was crazy, and didn't understand the neighborhood. He gave me comps from 15 miles away in much larger neighborhood and said those were much better comps. Of course, those bore a higher price. Although still not as high as $259k.

To make up that difference, he said that the condo had received 30k worth of updates in 2006 and that made it worth at least 20k more than all the comps.

I understand wood floor, ceiling fans and nice cabinets might shorten market time, but I don't feel 6 year old upgrades add 20k to the price.

When we received the low appraisal, our contract stated the seller had ten days to decide what to do. She decided to do nothing and the deal is dead.

Because our agent knew she wouldn't lower the price to less that $262k, but didn't share that with us, his clients, we spent over $700 that we shouldn't have on the inspection and appraisal. There will be another condo for sale, but we definitely won't be using the same agent.

linkybo, I'm sorry you have had this experience but don't really think that your agent, offering to discount his fee, was a factor in the demise of this transaction.

I know you believe the concession made by your agent resulted in your extra expenses for the appraisal/inspection. But, I don't. You wanted to buy this place and met with an unwilling seller - it happens. Now, move on and decide if you wish to continue to buy another condo in the same area - forearmed is forewarned...

Totally agree with talking to the broker and seeking some compensation BUT, think you will be better served by simply moving forward. Good luck!

ETA: In my experience, up-grades of 20-30K translates to 2-3K in actual value - don't fall for that - obviously, your appraiser didn't. Kudos to your agent for hiring a competent one!

This message has been edited. Last edited by: Idaho Resident,

quote:

Originally posted by linkybo:
Because our agent knew she wouldn't lower the price to less that $262k, but didn't share that with us, his clients, we spent over $700 that we shouldn't have on the inspection and appraisal. There will be another condo for sale, but we definitely won't be using the same agent.

I am in total agreement with you on all points. Best wishes as you continue your house hunt.

linkybo, Sounds like your buyer's agent was working more as a seller's agent! It sounds like the appraiser used the appropriate comps and properly discounted the upgrades. You will never know how much impact the actions of the agent had on your decision to go forward with the inspection. I would still take it up with the broker.

Problems exist here too with appraiser going outside of the area for comps..notice I said area not neighborhood. If there were higher comps inside the immediate area, the listing agent and the the buyers agent should have submitted to the appraisal company ..for "review".

Appraisals .. break deals everyday. Sorry, I too..would move on.

Thanks so much for everyone's input and advice. So you know how the story is progressing, here is the reply from our agent's broker:

"I spoke with (a real estate attorney)regarding (your agent's) legal responsibilities. The attorney stated that he has never heard your argument raised and that the agent has no obligation under Agency Law, any statutory laws, nor case law to tell a buyer he is taking less commission to put a transaction together. To your point that you would have proceeded differently had you known the seller was hard and fast on her price, the attorney said that when a contract is entered into in good faith by a buyer and a seller, it is expected that each party has negotiated to their best price and terms, and that there should be no expectation or planning by one party that the other party will make later concessions.

Regarding the ethics question, as a company we follow a very robust Code of Ethics and Standards of Practice of the National Association of Realtors. In addition, we have an agent-driven set of Standards of Practice that exceeds the industry standards. To that end I reviewed the Code of Ethics and both sets of standards with our Standards of Practice agent representative and we could find nothing that addresses your agent being obligated to disclose to you.

On the practical side of this issue, in my thirty-three years in real estate I have had the legal responsibility of over 27,000 transactions and have never had your complaint or request come across my desk. Just the opposite, I see clients grateful for their agent helping with their commission as this gesture usually helps a buyer meet the larger goal of procuring a desired property. Most agents do it in silence so as not to present themselves as a ‘hero’ or ‘savior’."

So - it seems the broker is supporting our agent, and we have no recourse. Live and learn. I wonder if I had thought to ask our agent if he was giving up his commission to help the deal, if he would have told me? Unfortunately, he just said "The seller accepted your offer of $259,000" and I believed that to be true.

linkybo, Thank you so much for posting back - so many times people post here and then disappear leaving the outcome unknown. I commend you with following through with contacting the broker although the end result was certainly not what you would have liked.

It is clear that the broker took your concerns seriously to the point of consulting with an attorney to clarify exactly what the obligations - both legally and ethically - were in this situation which really is, somewhat unique, in that few potential buyers would object to their agent taking a smaller commission in order to make a deal work. So I hope that you do feel validated at least from that stand-point.

Here is what I believe the crux of the matter to be - quoting from your interaction with the broker:

quote:

Originally posted by linkybo:
"To your point that you would have proceeded differently had you known the seller was hard and fast on her price, the attorney said that when a contract is entered into in good faith by a buyer and a seller, it is expected that each party has negotiated to their best price and terms, and that there should be no expectation or planning by one party that the other party will make later concessions."

And, therein lies the whole story in a nutshell. Had the property appraised out, the sale probably would have occurred and everyone would have been happy. Instead, it didn't - and by a very large margin. When an offer/counter-offer is made/accepted, that's it unless one or both are willing to negotiate further depending on later factors which turn up via inspections and appraisals.

Looking back, I can see why you think it would have made a difference HAD YOU KNOWN that your agent had discounted his fee to make it possible for the agreement to be made. BUT, hind-sight is 20-20. Realistically, if the property HAD appraised at the 259K, would you have objected to the closing when you learned that your agent had discounted his fee to make it happen? Of course not.

The bottom line is that whenever any contract is entered into, those terms and only those terms are applicable, and neither side has the right to assume that the other party will be willing to negotiate further regardless of what it took to get to that point such as your agent's agreement to discount his fee without your knowledge.

I know this is a very unusual situation and you had every right to question the situation. You did and received an answer even though it wasn't necessarily the one you wanted to hear. I hope that this experience hasn't discouraged you from pursuing your goal of buying a condo; just tell your next agent (and put it in writing) that you want to be informed of EVERYTHING SINGLE MATTER - regardless of whether or not it seems material to the outcome. Good luck and post back how your search goes - think we are all rooting for your success next time around!

quote:

Unfortunately, he just said "The seller accepted your offer of $259,000" and I believed that to be true.

And it was certainly NOT true. The agent has LIED. Now the broker has made it very clear where his loyalties lie. Proving damages sufficient for you to net anything would be a longshot and probably not worth your time and effort. On the other hand, sending a letter to the appropriate office at the state licensing department may very well bring you some satisfaction - they don't approach ethical matters with the same bias the broker appears to be doing.

Thank you for posting the broker's response, Linkybo. Even though his wasn't the reply you were hoping for, I wager that he will make a point to emphasize to the realtors in the brokerage the concept of "transparency" in conduct.

In the meantime, I hope you've found a new realtor and are wasting no time finding other properties to consider.

Just when you thought it was over... I know, I know. We should move on. And we have. We've hired a new agent and are looking at other condos. But, we were floored by the replies of our previous agent and his broker. I have to share so you experienced agents can tell me what you think.

A brief recap, when the appraisal came back 24k lower than our price, our agent emailed us: "We then countered back at $259K. The seller actually rejected that offer, so I offered to reduce commissions by 1% in order to move the football the final few inches over the goal line." At the time, he told us she had accepted our counter offer. This is not a dual agent, he is OUR, the buyers agent, saying he gave money to the seller, unbeknownst to us.

When we asked our agent why he didn't tell us, his reply: "grandstanding about the sacrifices I choose to make in my life in order to help my clients reach these objectives would be puerile and ridiculous."

I hope you're still with me, because here is the part I need your help with. The broker wrote to us: "The sellers agent said our agent's original offer to contribute a portion of his commission to get to the final price of $259,000 WAS NEVER COMMUNICATED TO THE SELLER. The seller and her local Power of Attorney will attest that there was no conversation regarding a commission reduction. The seller did in fact, independently, ‘accept’ $259,000. There was no ‘rejection’ of the offer. Therefore, your agent did not ‘willfully misrepresent the facts’ and did not ‘breach his duties’. Your agent just assumed (as did I, because it happens all the time) that the seller had used his commission to make a deal."

Really? A seller can use the buyers agent commission to make a deal? Am I the only one this sounds crazy to? Is the broker changing the facts to get his agent out of trouble? Can't wait to hear from someone who knows more about this!

Sometimes when negotiations are at a stalemate - usually after there has been several back and forths between buyer and seller and the 2 parties are extremely close, the buyer's and seller's agent will agree to take a cut on the commission. I've not been in that unfortunate position so far in my career but it happens. REL can answer this better than I can - but it would seem the seller would need to know because it is basically a change to the listing contract which is an agreement between the seller and their agent about agent compensation.

What is most troubling is how far off the mark the list price was from the appraisal. If I read your previous posts correctly the appraisal was on target for your area. Why didn't s/he check comps before you submitted an offer?

It is not uncommon for buyers and sellers to negotiate a portion of the commission to make the bottom line happen. Seller says I am firm at 100, buyer says I am firm at 99, and they look to the agents "what will you give up", agents look at it and go I am willing to give 1 to make 5. Normally if everything goes smoothly everyone looks at it as a win=win. Not all buyers, sellers, nor agents will negotiate the commission but some will.

It does happened that in the back and forth of negotiating (especially verbally) offers are made that never become a part of the final written contract.

Our agent said the unit had been upgraded in 2006 for $30k and that should be added directly to the appraised value since the appraiser hired by our bank only added 15k. The comps used in the appraisal were good, recent, local comps. It all came down to how much you add for 6 year old upgrades.

But - my gripe at this point is, our agent told us as the deal was failing that he had done so much to help, including paying a part of his commission to the seller to get her to lower the price. Which he didn't mention to us at the time, and it seems like if our agent had a deal with the seller, shouldn't we have signed something to that effect? Or at least have it mentioned to us?

And now his broker is telling us our agent didn't give any of his commission to the seller. His broker has admitted the agent's statement wasn't true. And our agent says he's just now finding out he didn't lower his commission? Someone is misleading us.

So, bo, what did the state licensing board have to say when you wrote them?

quote:

Originally posted by linkybo:
Our agent said the unit had been upgraded in 2006 for $30k and that should be added directly to the appraised value since the appraiser hired by our bank only added 15k. The comps used in the appraisal were good, recent, local comps. It all came down to how much you add for 6 year old upgrades.

But - my gripe at this point is, our agent told us as the deal was failing that he had done so much to help, including paying a part of his commission to the seller to get her to lower the price. Which he didn't mention to us at the time, and it seems like if our agent had a deal with the seller, shouldn't we have signed something to that effect? Or at least have it mentioned to us?

And now his broker is telling us our agent didn't give any of his commission to the seller. His broker has admitted the agent's statement wasn't true. And our agent says he's just now finding out he didn't lower his commission? Someone is misleading us.

Commission is determined between the seller and listing agent. If the negotiations are close and have been protracted the agents will do this and your agent might mention it to you to garner sympathy for their troubles. On the flip side though, the agent should notify the buyer if they receive a bonus on a property.

I think your agent needs to go back to school. To not know what was agreed to or not agreed to, whether or not there was a contract, what the comps were for the property. If not an ethics violation, just a violation in how to sell real estate. I do not understand how any agent can miss the mark so badly! To be off by $25,000 just blows my mind! I can understand that much on a $500k or more property but this one was valued less than $250,000!

In my opinion, 6 year old upgrades aren't worth that much. You gain a little in the appraisal process if the kitchen and bath have tile and the other comps have vinyl. Six year old carpet is just that, not worth anything no matter how great the quality. Solid surface counters are worth a little but not that much, as with cabinets. Unless they are spectacular - they do not add value, all kitchens are expected to have cabinets. Six year old appliances are just that - used appliances. if the appraiser gave $15,000 for the renovations then they were very lucky.

Many renovations do not add much value. The real value is in making the property sell more quickly, thus reducing the seller's carrying cost. If my house is updated, clean, etc it should sell more quickly than my neighbors house that does not have the fancy cabinets, new sink, not so clean, etc. The prices might only be $2,000 different but mine should sell before the other house thus saving me paying the mortgage, fees, lights, water, insurance, taxes, etc for a longer period.

This message has been edited. Last edited by: Charming,

Thanks Charming, and others. In my complaint to the licensing board, I want to make sure I have my facts straight.

Can my agent, the buyers agent, enter into an agreement with the seller and sellers agent that forgoes all of the buyers agents commission without the buyer knowing anything about it?

quote:

Originally posted by linkybo:
Thanks Charming, and others. In my complaint to the licensing board, I want to make sure I have my facts straight.

Can my agent, the buyers agent, enter into an agreement with the seller and sellers agent that forgoes all of the buyers agents commission without the buyer knowing anything about it?

Real estate laws vary by state. I don't know that it is illegal or even unethical, as I stated before - technically the commission is between the seller and their agent. A buyer's agent agrees to whatever commission structure the seller and their agent has agreed to in the listing contract. It is expected a buyer's agent will disclose any bonuses or perks outside the standard commission structure -(ex - $1500 bonus for an accepted offer by such and such date.)

An agent kicking in some of the commission to make a deal work is a last ditch effort to get a buyer into a property they really want. Normally it is not something to do on a whim. If I think my buyers really and truly want the property I would discuss it with them first. I have paid for windows and other things that the seller refused to fix. We do things to keep a buyer happy through closing.

What is more troubling to me is the appraisal.

quote:

Originally posted by linkybo:
Thanks Charming, and others. In my complaint to the licensing board, I want to make sure I have my facts straight.

Can my agent, the buyers agent, enter into an agreement with the seller and sellers agent that forgoes all of the buyers agents commission without the buyer knowing anything about it?

These are questions you should be asking a real estate attorney. Real Estate Laws vary widely according to state, county, city laws, and regional traditions.
In theory, I think the agent should have discussed with you any negotiations that took place.
In reality, I seriously doubt the agent breached any laws or committed an ethics violation.

linky, I'm a bit sad to see your latest post about drafting your complaint to the state licensing board but I agree that you have every right to do so. My question? What do you think you will be gaining? Not much, IMHO, so why are you continuing to be so fixated on this one issue?

I'm not going to repeat my position/opinion on your situation as it would just be repeating what I have already posted here in this thread on 6/29, 7/02, 7/05 and 7/11.

I wish you well. In closing, I hope you spend your energy finding a great new place that you are successful in buying. Don't spend your time seeking readdress for injuries not specified that can't be quantified in a court of law. Life is far too short...

Idaho - Chuck Steak asked what the licensing board had to say. I haven't submitted a claim because it doesn't seem like there is a clear claim to submit.

Our agent lied to us, but then said he misunderstood and thought he had given part of his commission to help the deal. I don't believe it was a misunderstanding, but that makes it his word against ours and not a claim the licensing board would be interested in pursuing.

My frustration is being out $800. Our agent misled us regarding negotiations and has given us a detailed account that makes it sound like he just assumed something incorrectly, not trying to mislead us.

Oh, and we've now learned, our agent's MOM is the listing agent. She sent us an email, saying several contradictory things, to which our agent replied that she was just confused. The listing agent (mom) replied back and said Oh yes, I was confused. What you said happened is what actually happened. Sigh.

Thanks for your well wishes. We meet with our new agent on Friday!

Was any of this disclosed to you at the time you showed serious interest in the property? Does the Mom work for the same broker?

Many states have Dual agency and Designated agency laws. Even if it is a he said she said, I would file a complaint with the local association.

Even though you will probably not recover anything, there seems to have been some transparancy issues if it all happened as described.

In SC for example I must explain the different types of agency to you at our first meeting. Then if I show you a house that is represented by me I must get in writing permission from you and the seller to work both sides of the negotiation; else suggest another agent. If I show you a house that is represented by another agent in the office I must get your permission and then have all negotiations go through my broker.

Each state has their own laws and traditions so it might be completely different where you are.

Good luck with your new agent.

This message has been edited. Last edited by: Charming,

The licensing board would not adjudicate a claim but would investigate to determine if any of the agents or brokers acted inappropriately. State law would determine if damages or penalties were due.

This is such an unfortunate situation. When trying to buy a house, it is very stressful and there are times when we (as buyers) take risks on spending money - but we always want to KNOW we're taking the risk before we do it. The biggest red flag to me is an agent saying that someone did upgrades 6 years ago and that will add $X to the appraisal. In this day and age, unless you added square footage (and alot of it), that is just simply not true. I'm back to what others asked - did the realtor pull comps, and what were they thinking?? They just seem to have been very illogical in their actions. We are still waiting to hear on our house, but we went ahead and paid for an inspection. Is that money at risk? Yes it is, but we had the luxury of deciding to take that risk, and I don't think you did - you thought you had a solid purchase pending. I would actually let it go because a) I don't think you'll be able to get your money back and b) it is detracting from your hopefully better experience with your new realtor. I actually think your inspection cost was extremely reasonable - have always paid between $400-$500 for an inspection, but I'm with you in that if I had known the condo really wouldn't appraise, I would have wanted that piece of information way up front. Whoever said that your old realtor needs to go back to school is absolutely correct... Sounds like maybe they "learned" from their Mom, and maybe she actually needs to go back to school as well... I just want to hear that you've found a great place, and things are finally working right...!