Profile picture for user7252816

My realtor caused me damages, do I have any recourse in this matter?

I have a pre-approval for $200K.  I saw a home for 200K.  I told my realtor to submit an of $190K.  As we are engaged into negotiations, I'm at 194K and the seller is stuck at 195k, the seller's agent pointed out that there appears to be a pre-approval leter for $200K attached to our offer.  Therefore, my realtor submitted my offers with a pre-approval letter of a higher amount.  Obviously now they (sellers) know how much I can  go up to!  Now we have reached an impasse in the negotiations.  So, I gave the buyers a deadline that I'm stuck at 194K and it is only valid till midnight tonight.  As I'm waiting, do I have any recourse against my realtor who revealed my pre-approval letter of a higher amount.  Please advise.  I keep asking my realtor why did you submit my pre-approval of 200k with 190s offers and he is not responding.
  • January 10 2013 - Memorial
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Answers (16)

Profile picture for sunnyview
The bottom line is that you are either willing to pay the $1000 more for the house or not. You could ask the seller to split the amount or ask the agent if they are willing to offer you a commission rebate. Past that, it's agree or walk.

Your agent may have felt that your letter would not make a difference to the seller. Suing is unlikely to be successful and a complaint to the realtor board is a complete waste of your time. If you are unhappy with how the agent handled submitting this offer, then I would find another agent who suits your style of buying better.
  • January 11 2013
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Dear Memorial User,
It's common for Pre-Approval letters to be at a higher amount then the offered price. This only shows that you can afford the offer you made to the buyer. The buyers highest concern is that the sale will complete escrow.
Let's look at it a little differently:
Say, you are the seller and a buyer came in who could afford "millions" would  that put the buyer in a bad light? No! If you had a buyer worth "millions" you have a very strong buyer.
  • January 11 2013
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First, I apologize for not reading all the answers, I glanced through a few.

You agent didn't do anything wrong.  It's a game.  If I was a listing agent and received a pre-approval letter for the exact amount of the offer, that would make me question it and think that the buyer very likely is approved for a higher amount.

Ii would also question why are you looking at a house that is listed for 200K when you are only pre-approved for 194K?  In today's market? May be Houston's market is different but in DFW, we are constantly in multiple offers right now and inventory is low.

It's a game and we do it all the time.  When we represent buyers, we ask from the lender a letter for the exact amount of the offer.

If you qualified for 300K, does that mean you are going to pay 300K for that house?  no...  The house is worth what YOU think it's worth to you only.

And seriously? You're bickering over $1000? I first thought it was 10K but 1K????  buy it or walk away.

Naima
  • January 11 2013
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OK, so we have established you have not been injured in any way.
You really haven't.
This isn't a game of "guess how much the buyer can really afford to pay" and watch his pre approival letters go up with each offer..

Your pre approval has nothing to do with how much you are willing to pay for a home....only that you can afford the offer you are making.

Truthfully, I think it makes you look stronger as a buyer to show you have the ability to go higher.......it's your right to go up, or not....

That  being said.....will you really walk away from this house for $1,000?
 It translates to less than $5.00 a month towards the mortgage.
  • January 10 2013
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Your agent has not violated any laws and generally the pre-approval letter is always submitted with the offer. You could have gone back to the lender and asked for a new letter with the offer price but overall this is not costing you money.
Negotiations can be a stressful time but it seems you are very close to going under contract.  $1000 is about $8 a month on an average mortgage payment.  I would recommend you split the difference with the seller.  Best of luck to you. 
  • January 10 2013
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I think today's sellers and agents are too savvy for this kind of con. You could have had a pre-app for $190K, but when you were willing to offer $194K, you would've needed a pre-app for that, right?

Short and sweet: you can't make people do anything. If they don't want to sell it for $194K, the only thing you can control is your willingness or lack to pay $195K.

  • January 10 2013
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Profile picture for SoCal Engr
Couple of thoughts (many echoing those of others, but from a consumer vice REA - for whatever that may be worth)...

#1 - You are assuming that you've been damaged. That assumes that the seller would have accepted $194K had they not seen the $200K pre-approval. That'd be very hard to prove.

#2 - I somewhat understand the seller's position. They started a $200K, you at $190K. $195K is midpoint, but you've dug your heels in at $194. This is pretty much the exact same scenario I described in a prior post - the one where I told my REA that I had made a reasonable accomodation and if they were going to hold things up over $1K, that they could take their money and go find someone more desperate than I to sell.

#3 - Since your REA is not responding, why are you "stuck" at $194K? Realistically, what's $1K on a $194K transaction, especially since it's going to be financed? You're talking about killing a $194K transaction over a 0.5% difference, $4 a month - and the seller has already met you halfway. Again, why "stuck" at $194K?

Yes, the REA was a bonehead for submitting the $200K pre-approval, irrespective of how others may try to spin it. But, are you really going to dump a house you apparently like over a $1K my-way-or-the-highway negotiation?
  • January 10 2013
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To answer your question simply, no you don't have any recourse against your agent.

In the future you can get the lender to draw up the pre approval letter without putting a price and just putting a property address. 
  • January 10 2013
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Profile picture for hpvanc
While it may not have been the best posturing, I'm not sure that your agent actually did you harm.  If $194K is your top dollar let it expire, see if they come back with a counter in a few days.  If not move on, if you don't believe this property isn't worth $195K to you. 
  • January 10 2013
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Despite your belief, your agent has NOT caused you any damages.

The fact that you're approved at $200K or 2 million doesn't make a bit of difference...you have placed a value on the home and the seller disagrees with your valuation. 

  • January 10 2013
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thanks for posting your question on Zillow.com!

no, your realtor has not violated any ethics or done anything wrong.  now, he is not a very good negotiator. Just because your proof for 200 how does the seller you know you're not approved for 240? You can simply the deflect the fact that your preapproval is higher by telling them that you are approved for substantially more and if they do not meet your demands, you made look into a higher price range.

I want to address another point with you, you are only 1000 dollars apart & cannot make it work? 1 of you to suggest splitting 1000 dollar difference in half.  if you really like the house I would not lose it for 1000 dollars!

good luck.
  • January 10 2013
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Lets turn the table around and pretend that you're the seller looking at three offers.  All three were written for the same price and terms, but one buyer has a pre approval letter from the lender for $200K and the others at the price that the buyer made an offer.  You as a seller would tend to gravitate towards the letter from the lender that shows $200K.  If you, the seller, were to give a counter offer for a higher sales price, you probably would give it to the buyer with $200K approval since the other two buyers approval letter states that they're only approved to their offer price.  Therefore the other two would lose out. If an offer was submitted without the letter, you the seller, probably would of put it aside and looked at the other two offers that showed that the buyer has preapproved loan.  Because the an approval letter states $200K, doesn't mean that the buyer has to spend that much.

Perhaps the best thing that could of happened is that your agent could of told you the pro and cons of submitting a letter with a certain dollar amount and then let you decide as to which option you wanted to choose.  
  • January 10 2013
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Profile picture for Ofe Polack
You are obviously working with an inexperienced buyer agent.  Even though you provided the agent with the pre approval letter, the agent did not have to submit that letter, he should have requesrted one for the price of the offer.  At this point if I were you I would concentrate on moving on with the offer, if that is what you want to do.  You do not have to use all the $$$ on the pre approval if you do not believe the property is not worth it.    
  • January 10 2013
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Profile picture for SoCal Engr
As a seller, I encountered a similar impasse with a stubborn buyer, and told my REA to let the buyer's REA know that they could take a walk. The buyer's REA decided "some pay was better than zilch", so they reduced their commission to make up the difference (which actually did not require a dollar-for-dollar reduction. Maybe your REA might be similarly inclined, especially since they may be at least partly responsible for the current situation.
  • January 10 2013
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$1000 off!  Split the difference!!!!!  There is not a single reason I can think of not to make this deal work.  
  • January 10 2013
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Profile picture for wetdawgs
If I were in your shoes I'd simply state that  you don't think the house is worth more than $194 k and the pre-approved level puts you in a financially uncomfortable position.    If they don't accept, move on and learn from your mistake - while you may show your agent a pre-approval letter of $200k, give them another one to submit with the offer at the offer number.  

Why not focus on wrapping up the deal rather than wasting time trying to assign blame?   $1000 is so close... but it is your decision.

We have never purchased for more than 50% of our initial pre-approval.   But, we've always had the lender customize the print out to go with the offer.  The lender has been happy to do so, and very quick to respond.

  • January 10 2013
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