Profile picture for johnlpageiii

Ethics question...

I found a 'Make Me Move' listing, and was in contact with the owner to eventually come by and take a look. Nothing serious...the price was too high but the owner suggested some wiggle room, and we want to look at as many places as we can to get a feel for the area. I let my buying agent know about the property and asked if he'd accompany us to look at it. Three days later, the price increased. My agent stopped by and told him he was selling too low and recommended he increase his asking price (making it out of our preferred price range). What do I make of this??
  • February 01 2014 - US
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Answers (16)

Best Answer

Your agent must work for you, not against you. A "position of honesty" is not a satisfactory defense in this situation.

In my opinion, if an agent believes that they need to somehow protect the seller - let's say it's a $400,000 property with a Make Me Move of $200,000 - then I think the agent has an ethical and legal obligation to inform you, in writing, that they cannot represent you in a transaction with the seller at $200,000. They would also be obliged to maintain confidentiality on your behalf.

Some agents would argue that they are obliged to help you buy the property for $200,000; others might take the position that their duty to treat the public "fairly" takes precedence.

When your agent told the seller that their property was worth more than you were considering making an offer for, I think he acted improperly.

I trust that you are shopping for a new agent.

All the best,
  • February 02 2014
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Profile picture for johnlpageiii
Pasadenan -- Relax! I'm not planning taking any recourse you seem to be suggesting. I'm brand new to the real estate game, and felt like going to the house I was interested in behind my back and suggesting to the owner to increase the price was wrong. I just wanted to get everyone's opinion. 

Josh Barnett -- He said that he was being honest with him, and to keep the prices as high as he can to benefit the neighborhood, suggested he was selling too low. There's no way that house would appraise for even close to what he thought, so I was very confused.
  • February 03 2014
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Profile picture for JoshBarnettREIB
Check with your attorney and what did the agent say when he was asked why he recommend the price increase? 
  • February 02 2014
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Profile picture for blank screen EXILED
By the way, it is quite likely that the MMM was set assuming "net" and not accounting for Realtor Commissions.

And Realtors have been brainwashed by NAR into believing that sellers net more when Realtors are involved, so of course a Realtor that is expecting a commission is going to try to make sure that the sold price is at least 7% above what the property would sell for without agents.  After all, that is what NAR tells them they are supposed to do.  NAR tells them that the NET to the seller is supposed to be 10% to 15% above what the seller would net when the agents are skipped.  That is why they tell you that buyers are "supposed" to have an agent representing them for "FREE"  . . .  so that you as a buyer can pay 15% more for the exact same property for absolutely no benefit.
  • February 02 2014
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If you didn't sign any agreements with your agent, the agent may be under the impression that they are acting as "duel agent" under the case that the buyer is "unrepresented".  If you signed "nothing", the agent has absolutely no legal nor moral obligation to you of any kind.

You have absolutely no case with the local board of Realtors nor with the state licensing department.  Even if you did sign an agency agreement, you can't prove to a board nor a court that the agent purposely acted against your interests.

How can you expect the NAR Realtor Code of Ethics to protect you when the entire Realtor Code of Ethics is "unethical" and only designed to protect the interest of Realtors?

The local board and the state licensing department will side with the Realtors every time, even if you do spend 80 hours at hearings.

Ever wonder why Real Estate Agents' Errors and Omissions premiums are so low compared to any other liability insurance?  It is because they never pay out any claims, because licensed sales agents are responsible for "nothing".

Don't believe it?  Check with a Real Estate attorney.  You don't have a case.  A large portion of Realtors are unethical simply because the unethical NAR Realtor Code of Ethics encourages them to be unethical.
  • February 02 2014
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Profile picture for sunnyview
Your agent breached his professional duty to you. Sparkling reputation or not, I would find a new agent. This one did not do right by you so why risk another "slip" when there are many loyal agents that will work hard for your interests alone.
  • February 02 2014
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Profile picture for johnlpageiii
I contacted the seller stating we were no longer interested after I noticed the price increase. He said he was sorry but his wife was pregnant and would be hard to convince to move. He also said that a local realtor stopped by to look at the house and suggested to increase the price. I said we were "shopping around" for a realtor and asked who it was that stopped by. He named my agent. My agent said he was operating from a position of honesty to the seller...not sure if the seller asked my agent's opinion, or if he was the one who initiated. The owner already stated he did not want to list the house, so there's no way my agent is going to be representing him.
  • February 02 2014
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Profile picture for hpvanc
"Basically he said he was worried about having a property sell below it's value and affecting other properties in the neighborhood."

Was it your agent that said this or the seller? If it was your agent drop him like a hot potato and report him to the state licensing authority. Interview very carefully if you decide to use another agent, unfortunately what you experienced seems to be fairly typical i.e. the "buyer's" agent a.k.a. the Selling Agent doing what they consider their job to be, representing sellers in general over the buyer they are implicitly or contractually to be working for. The primary and possibly only advantage (for the vast majority of agents) of contacting with a "buyer's" agent is the convenience of a single point of contact.
  • February 02 2014
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Profile picture for dan hill
He works on commission. My guess is He is afraid if values are lowered in the area, so will his potential future commission. He does not want that as a comparable sale for possible  future transactions. See if He is now the listing agent for this house.  I would suggest reporting the situation as well. If you want an independent value estimate, contact an appraiser, they do not work on commission.
  • February 01 2014
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Maybe it didn't happen that way? Maybe the seller has a story that isn't consistent with the facts?
  • February 01 2014
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Thank you for all your responses. Basically he said he was worried about having a property sell below it's value and affecting other properties in the neighborhood. The price, to me, wasn't low when compared to similar properties on the street. This is all based on what I could gather from Zillow's value estimations so take it with a grain of salt. We have not entered into a buyer's agreement, though his reputation is sparkling and I was referred by a close family member. I'm assuming what happened was he wanted to look at the property himself and let it slip that he thought he was selling too low. Why he went there without me, or how he could let that out is strange given his standing in the community. 
  • February 01 2014
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As others have mentioned, this agent did NOT have YOUR best interest in mind.

I would suggest you report this agent to your Local Board of Realtor's and give them a Statement. Hopefully the Board President, will at least call this agent.
  • February 01 2014
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Profile picture for sunnyview
"What do I make of this??"

Perhaps your agent did you a favor by showing their colors before you entered a contract to buy. Make the decision to talk to your agent. Tell them that you feel that they threw you under the bus for a commission and/or possible FSBO listing.

After you have that conversation, I would tell them so long and start interviewing other buyer's agents.
  • February 01 2014
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Realtors® Code of Ethics, Article 1 
When representing a buyer, seller, landlord, tenant, or other client as an agent, REALTORS® pledge themselves to protect and promote the interests of their client.

State agency law almost certainly reinforces this.
  • February 01 2014
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With or without a buyer's agreement the agent was wrong but I can't think of any violations but it should be
  • February 01 2014
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Do you have a signed Buyer's Agent Agreement? If yes, Agent has agreed to represent your interest, so I would ask him or her to explain to you how their actions were in your best interest. You obviously have other recourse through Agents local association if Realtor and/or state licensing authority. In addition sounds like Agent "shot themselves in the foot" with loss of a possible sale.........
  • February 01 2014
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