Profile picture for MaliSareshtedar

Is this collusion? Buyer agent offered my agent the co-listing after the rebuild

Our agent pushed us to accept an offer from a buyer. We've now found out it's because the buyer was a builder who offered to give our agent the listing once the home was renovated and relisted. We didn't want to sell to this particular buyer but were pressured and lied to. The buyer used an agent from the same realty firm so that means our agent and the buyer's agent would co-list the new listing. We have emails from the buyer agent stating they want to give our agent the co-listing to "tip it in their favor." What recourse do we have? THANK YOU! 
  • April 19 2014 - Palo Alto
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Answers (22)

hi, please let us know how this situation is finally resolved...good luck!
  • May 01 2014
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It does sound  like a conflict of interest.. Are you sorry that you sold the property? Do you feel that you were underpaid for it and could have gotten more from another, or a better buyer? I don't think you can go to the broker on this, but you can have a two hour appointment with a Real Estate Attorney. That would probably be your best course of action.
  • April 25 2014
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Profile picture for Louis W
 Your agent has a fiduciary responsibility to you and based on what you state it does not appear that he is acting as such. 

It seems that since the initial offer that you entered into, that the buyer is changing the terms.  It is ok for them to get a mortgage, but if you signed a offer stating that it was not subject to this then it can not appear or be a means for the buyer to get out of the transaction.

If you truly feel as strong as you sound, I would have your attorney send the broker owner of your agents company a letter explaining why you no longer want to proceed with this transaction, as you have multi reasons, ones that the board of licenses would love to hear.

You can not just back out however, it is based on what you signed.  That said, it is a very time consuming and costly process for someone to sue for specific performance and in your case based on what you have stated you would have a strong case.
  • April 22 2014
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Profile picture for Dunes ..
Best of luck getting this resolved user8868836...let us know how it goes
  • April 20 2014
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Profile picture for MaliSareshtedar
Thank you all! Really appreciate your guidance and wisdom.
  • April 20 2014
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Profile picture for Dan Tabit
Thanks for the reply.  I think a few issues need to be raised with an attorney who can answer the questions for you.  One new one is the change from cash to financing.  The type of loan is the buyer's problem, but the change would trigger an issue with the standard contracts I use.  Since you are in California and I don't use the same forms, I can't speak to whether this is an issue for you, but it's one to explore.
Another is assigning the contract without your written consent.  This again is a change in the terms of what you understood and may or may not be allowed based on the terms of your contract. 
As to hoping to sell to a nice family, we can't discriminate against family status.  I tell my clients all the time the only color or status that matters is the color of the money.  If you had multiple offers and had two very competitive, one builder and one you understood to be a family, builders are not a protected class so you would be allowed to elect that one over another, but with only the one offer, assuming you have good information to base a decision on, it may have been wise to move forward. The issue I see is whether your agent truly had your interests at heart when they advised you.  Participating with the new buyer on the future sale does raise questions that deserve exploration. 
So, as we've all been saying, get to a Real Estate attorney immediately tomorrow with copies of the contracts and all the communications you've had with your agent and anyone else involved. 
I can't tell you how this will turn out, but you are not happy with the direction and need answers,  This is the only way to get reliable answers you can make decisions on.  Best of luck and let us know how it goes.
  • April 20 2014
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You should *definitely* seek legal counsel.  That said (and I'm certainly no lawyer) but it sounds like the buyer has changed the terms of the purchase.  If I'm reading correctly, they've added parties to the agreement, changed the financing terms, etc., after the initial agreement was made.  Is that correct?

Does the seller not have to agree to those changes under California rules & regulations?  Have you signed off on any amendments/addenda to the original purchase agreement?  Again, definitely ask your lawyer.
  • April 20 2014
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We can't give you legal advice, you know. Based on what you've told us, I would talk to an attorney tomorrow, and I would strongly consider trying to get out of this deal, get rid of the agent and broker, and re-listing with somebody new.

ll the best,
  • April 20 2014
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Profile picture for MaliSareshtedar
Hi, thanks all. We're sad to say the least. We really wanted to sell to a nice family that really wanted the house. We were told by our agent that the house wouldn't appraise etc and that we must go with this first buyer who was bringing a cash offer and didn't need an appraisal. Now, it turns out everything has changed...cash offer is no more...it's now a loan. Renovation is a tear down. The one buyer turned into two buyers (partners in a new builder business) and now they want to swap out the first buyer completely. It's been a bizarre ride. I hope I never have to sell a house again. :(

One other question...this is a builder but he's getting a personal residential loan. Is that legal?
  • April 20 2014
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Good morning,
A solid real estate attorney will be able to give you the best information.
I'm really sorry to hear about this.  It's impossible to say for sure whether the contract is void - that would be a questions for a judge to answer.  It sounds like the property is still in escrow and hasn't closed escrow yet, is that right?  If so, have you asked your agent/broker if you can cancel the contract?  It's a long shot, tell him/her about the email you now are aware of and let him/her know you believe they have acted unethically and will take it to the next level if they cannot convince the buyer to let you out of the contract.

  • April 20 2014
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You can't just decide not to honor the contract; if you want out, you need an attorney. If you just decide that you're not going to honor the contract, and you go and try to sell to someone else, you will be sued to perform and you will likely lose.

  • April 20 2014
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Profile picture for MaliSareshtedar
Hi Dan, Thank you so much for your input. Do you have any input on whether the entire sales contract is nullified based on this fraud in the inducement?

Kind regards,
Ellie
  • April 20 2014
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Profile picture for Dan Tabit
Having scanned the other answers, here's my two cents worth.
See an attorney for an initial consultation.  Sit down with both agents, their managing broker and tell them what you are feeling and the steps you have taken and intend to take, which would be further action against them legally and through the local board and state licensing office. 
Chances are, unless the attorney tells you different and always take their advice over any of ours here, they will let you out of this deal and avoid the fight.  If not, pursue all options available to you.  Start immediately on Monday morning as time is critical.  Best of luck and let us know how it goes. 
  • April 20 2014
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Thanks for posting your question on Zillow.com & sorry for your problems.

Well, it's been clearly covered, contact a real estate attorney.
  • April 19 2014
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You probably have quite a bit of recourse, actually.

The acts of the agent may make the contract voidable, talk to your attorney. Ethics and licensing boards are not so much "enforcement" entities as they are punitive ones; the agents can be fined and have their licenses suspended or even revoked.
  • April 19 2014
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Profile picture for sunnyview
You need an attorney right now. Based on the evidence you have, I would say that the buyer and the agent crossed the legal line. If they did, you may have an opportunity to cancel the contract or sue them bother for the difference between their shady offer and the higher offers that came after them. Take all the evidence you have to an attorney including all emails and get copies of any later offers right now before they disappear.

File a complaint with the Board immediately, if the attorney says you have to sell then sue later then make sure the agent's entire commission is held in escrow pending the outcome of both the Board complaint and your legal case.

This agent can sit and spin without any commission while you line up your case. Terrible thing to happen and terrible ethics for a professional that you are expected to pay. They should lose their license and be charged with a crime if the emails say what you said they do.
  • April 19 2014
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Profile picture for Dunes ..
Getting legal advice from those actually qualified to give it is always a good idea

You might also consider using one of the things your taxes pay for...
California has one of..if not the best..online systems for information or filing complaints or or or
California Dept of Consumer Affairs...Bureau of Real Estate

You can file a complaint
"We investigate complaints against real estate brokers and salespersons accused of misleading or defrauding consumers. If we can prove a violation of the Real Estate Licensing Law, a formal hearing may be held which could result in the revocation or suspension of the agent's license."

They have an Advocacy Program
"The mission of the Advocacy Program is to respond quickly and informally to concerns of consumers and members of the real estate industry by serving as an informal mediator or facilitator to resolve conflicts and/ or to mitigate or prevent Real Estate Law violations."

Anyway you could also check on the CA. site to see if there have been other complaints, license status & many other things....Just something to consider...

I'll add on that personally I've never had much faith in systems set up so members of an industry police themselves (Talk to the Broker or complain to the local Board of Agents or NAR Code of Ethics)...
It's my opinion it's mostly a PR thing & in reality you get a lot of talk but very little if any actual policing or enforcement
  • April 19 2014
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This is a question for an attorney. Probably going to cost $400-$500 per hour. Harry Price in Los Altos is my go-to attorney: harry@priceslaw.com

You are most likely contractually obligated to complete the sale of your home per the ratified contract.  You might be able to cancel if the buyer does not perform: remove contingencies, close on time, etc. If you don't sell, then the Buyer could sue you for damages and try to make you complete the sale. If you signed the standard mediation/arbitration clause, then this would most likely be settled by the arbitrator.

The attorney can advise on likelihood of success in a civil suit. Maybe you could sue for damages in not selling to one of the other buyers. Probably a lot of money paid to attorneys to agree on some cash settlement.

Lastly, you can file a compliant with the local Realtor Association for unethical behavior. They can review the documentation to see if the agent/broker did not disclose something properly. If the Association finds in your favor, the agent could be fined several thousand dollars. No money to you - that is the role of a civil suit. 

Decide if it is worth a couple of thousand dollars to talk to an attorney.
  • April 19 2014
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Profile picture for MaliSareshtedar
Hi, We simply don't want to sell via this agent and his firm for allowing this kind of behavior.  We are concerned with this buyer in general and don't want to sell to this particular builder because they've been unethical from the start. 

This was the first offer. Our agent pressured and pressured and pressured us saying we had to take this one and that other offers wouldn't qualify and many other reasons why this first offer had to be the one.

And yes, we have had many other offers come in that were significantly higher.

We found out by accident...were forwarded the emails. 
  • April 19 2014
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I would prompt you to sit down with the two agents and their broker to discuss this further.  It might save you legal fees in the long run and you may be able to work something out that will appease you.  Explain to the broker what the situation is and ask for your commission to be reduced in order to allude any further legal action. 

And just to understand the situation further...were their multiple offers on the property?  Were you concerned with the buyers price? How did you find out about the emails?

Good Luck with whichever route you choose :)
  • April 19 2014
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Profile picture for SVRealEstate
I agree with Iris, talk to an attorney that specializes in real estate law.
  • April 19 2014
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I would immediately contact a real estate attorney to see what your options are and proceed from there.

  • April 19 2014
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