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seller's agent failed to disclose our offer until the seller signed another contract

In short, our agent contacted the seller's agent on Monday to express our interest and find out the details on the home we're interested in. He basically told our realtor that our terms sounded great and he thought the seller would be interested. We got our offer together and our agent asked for an opportunity to meet with the seller to present our offer (Wed morning.) Now the selling agent said he actually had a verbal cash offer that had come in Sunday night and they had been throwing it back and forth and he didn't like multiple offer situations so he didn't want our offer in the mix, even though nothing had been signed at that time. Our agent didn't back down and requested he show our offer to his clients again on Thursday- the listing agent stated he would have a signed doc back later that day.
 So now it's Friday and we finally get signed documents back accepting our offer as a backup offer as they had already signed on the other offer. We are under the assumption that the listing agent represents the other buyer (why else would he decide not to deal with us? we offered the listing price!)
Is it legal to fail/delay disclosing an offer until other docs are signed? What legal recourse do we have? My husband and I are heartbroken as it appears we've lost our dream home. Thanks in advance.
  • March 23 2012 - Little Rock
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Answers (5)

Lesson #1:  Don't delay.  If you love the house, chances are that somebody else loves it too.

Lesson #2:  Make your offer as "clean" as possible.  Cash always wins because it's less complicated and has less likelihood of falling through.  

Lesson #3:  Make the expiration on your offer of short duration.  Force the listing agent to give you an answer in a timely manner.  Any good agent will use an existing offer as leverage to motivate other interested parties to submit their offer quickly.  If you give them too much time to respond, you are doing yourself harm.
  • May 03 2012
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I would also add to Michael's post. In cash transactions an appraisal is commonly not performed, however I would always counsel a cash buyer to not waive this right even though there is no loan. Just because it's all cash doesn't mean that the buyer will want to buy a property at the correct market value, and the only real way to ascertain this is by an appraisal.

Regarding your scenario, just because you came in at asking price doesn't mean that was the highest offer. Here in San Diego, certain neighborhoods are hot and get overbid if the listing agent prices it aggressively. For example, my clients put in a full price offer for 799k, 20% down conventional financing. It ended up closing for 900k and the terms of that sale were all cash.
  • March 23 2012
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Profile picture for kapyarets
Very good answer Michael! 
  • March 23 2012
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If you got a signed offer accepted as a back up, the listing agent did present your offer to the seller.  Under real estate law, it is the responsibility of the listing agent to submit any and all offers to the seller, unless the seller expressly instructs the listing agent to only accept certain types of offers in writing.

There is no law governing delaying presenting an offer.  You cannot dictate that the listing agent present your offer first, or accept it prior to the seller reviewing other offers.
  • March 23 2012
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I think you're making a couple of presumptions that may or may not be true.

1. That your offer wasn't presented to the seller. Technically the agent is suppose to present ALL offers to the seller unless the seller specifically states they want to work with one offer at a time. If the listing agent failed to disclose ALL offers, then they broke their fiduciary responsibility to the client - but not to you.

2. That the listing agent is representing both parties. This may not be true.

The next time, if you find the 'home of your dreams' don't wait until two days later to submit an offer. And it's not necessary for your agent to present the offer to the buyers if this will delay getting your offer in more quickly.

3. Because you presented a full price offer, your offer should've beaten out the other offer. You don't know if the cash offer was equal to or greater than your offer.

A cash offer with no contingencies will always trump another offer - unless the other offer is cash too. They are quicker to close and there are no issues with the property appraising.
 
  • March 23 2012
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