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Wow.
1) OK, there may actually have been good reason to use a higher priced loan broker. No way to know on a blog post. The other lender may not come through with the quoted rate, your friend's FICO and down payment or job history or any number of things could make the rate something other than the phone quote. The other loan broker may be less experienced and not know how to expedite through underwriting or overcome any potential delays.
It is unlikely the RE agent is getting a kickback. It is more likely that they find a loan broker they work well with and it helps the buyer's transaction that the agent knows the loan broker's processes and has a history of good communication with him. Or, they could be buddies and the RE agent does not care if this loan broker's rates are a bit higher. I hope your friend's loan process is smooth.
2) Does your friend have a Buyer Broker Agreement? If he does, he has actionable proof that the agent did not perform his fiduciary duty to his client. Report his a** to the local association. Not keeping confidences, hurting client's financial position by telling the listing agent the degree of emotional attachment the buyer has for the property.
If your friend did not sign a broker agreement he is SOL. He is what is known as a customer, not a client. RE agent has no duty to him other than some very vague things like don't lie. RE agent works as a subagent of the seller. But, the commission agreement is between seller and his listing agent. The cooperating agent can ask, but won't get, a commission other than what is listed in the MLS.
tclement
2011 Jul 21, 2:26am
Thanks Payoff,
On 1), I should mention that my friend has a perfect credit rating.
tclement
2011 Jul 21, 2:38am
Also, my buddy (who likes this crowd sourcing of this problem) tells me that he does have a Buyer Broker agreement including a mention of the usual 3% rate. We also don't know what the response was from the seller (i.e. whether the seller agreed to pay the additional brokers fee, or whether the sellers agent agreed to 2.5%.)
Although he may have given away the buyer's interest level, a short paragraph like that can and often DOES help the buyer.
In the event where there are 2 offers that are the same, the seller obviously will pick the one that expresses more interest. Money may not always be the bottom line for all sellers. I've learned that the property that we've gotten beat out higher offers because our email contained language expressing how much we wanted the property. But this was a foreclosure.
The seller already accepted the offer. I don't see why the buyer should be mad about the seller knowing how much they wanted the property; unless they were planning to play dirty and haggle while they were in contract.
klarek
2011 Jul 26, 6:03am
I'm pretty sure that if your friend has evidence via email that his agent or broker is violating his/her confidentiality agreements (in addition to a number of other ethical violations), he can nix the deal and have his earnest deposit kept in escrow until the state real estate board can review the case.
In fact, were the board to not rule in your friend's favor, it would still be worth losing $5000 than proceeding with a purchase like that, which could ultimately cost him a lot more due to the likelihood that the agents are fucking him over in a dozen other ways. Just for the sake of not letting a piece of shit realtor or broker earn extra (or any) commission by betraying me, I would risk losing the earnest deposit money. If your friend has some decent evidence to support such a decision, he can probably get that money back.
klarek
2011 Jul 26, 6:03am
Although he may have given away the buyer's interest level, a short paragraph like that can and often DOES help the buyer.
No, it NEVER helps the buyer.
n the event where there are 2 offers that are the same, the seller obviously will pick the one that expresses more interest.
...and goads him into paying more or asking for zero conveyances. It's a lose-lose for the buyer.
tclement
2011 Jul 26, 8:44am
The seller already accepted the offer. I don't see why the buyer should be mad about the seller knowing how much they wanted the property; unless they were planning to play dirty and haggle while they were in contract.
There were, as you saw, plenty of unethical aspects of the buyer's agent here. The small point which you are referring to, that the buyer's agent indicated that the buyer was very excited over the property, taken alone, might not be a big deal. However, if you take it in context with the buyer's agent asking a higher and out of contract commission, then it makes it absolutely clear that the buyer's agent was trying to convey to the seller that they were getting a *really* good deal.
This suggests to me that the buyer's agent did not zealously guard the buyer's interest. Don't know about you, but when someone is acting as my "agent", I expect them to be acting in my interest.
bubblesitter
2011 Jul 26, 9:01am
Why are we still arguing on this? It is very clear from the email that both buyer and sellers agent are joining forces to screw the buyer. An agent is never working for buyer or seller. Case closed.
The real deal ... seems REA dont provide all the facts and certainly overkill on emotions. If your gonna buy, do it with all the facts that can be proved and with a clear head.
the definition of fair market value is found in the United States Supreme Court decision in the Cartwright case:
The fair market value is the price at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or to sell and both having reasonable knowledge of relevant facts. United States v. Cartwright
The fair market value is the price at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or to sell and both having reasonable knowledge of relevant facts. United States v. Cartwright
Under the Cartwright standard, realtorsused house salesmen prevent us from having a fair market, yes. They hide as much information as possible.
MAGA
2011 Jul 27, 11:54am
ethical Realtor?
realtor never gets to kick.
Guys, it's Realtor®!
I can't figure out how to do that "R" thing. I guess NAR is going to sue me.
B.A.C.A.H.
2011 Jul 27, 12:10pm
Note: I had to put a space between each character so that it did not automatically appear to you as ® here is what you do, without the blank spaces in between & reg ;
zzyzzx
2011 Jul 28, 2:40am
If I'm understanding you correctly, that's for a $700,000 house, and they are claiming some sort of bidding war!
I can't figure out how to do that "R" thing. I guess NAR is going to sue me.
It is better not to use the registered trademark symbol. Realtor is more or less a generic term for "real estate agent" now, and it deserves to lose trademark protection. Other similar terms -- Kleenex -- do you ask for "facial tissue" or "Kleenex"?
A close friend of mine has (in spite of knowing my beliefs about the RE market ;)) is in contract to buy a nice house in the east bay. A couple of things have happened that are disturbing in the process. The second is more disturbing than the first, but both are creepy to me:
1) The RE agent recommended a loan broker and said they'd get a good deal. After the loan approval process was underway (appraisals etc.) he discovered that he could get a dramatically better loan on his own. His agent recommended that with only 10 days left before the loan contingency, he should go with the original loan. (The new one will save him .4% interest.) His sense is that she's getting a commission on the original loan referral. He's proceeding with the newer loan, and will have it in plenty of time for the contingency, and it will save him $40k over the course of the loan.
2) He received an email in the course of these discussions that included (lower in the thread) the original email sent by his broker to the sellers agent. In it, his agent said something like this:
"The buyers are completely in love with your property."
"They are putting 40% down."
"They offered more than asking price."
"They will close in 30 days."
Then, the kicker:
"In light of this, I would kindly request that you increase my commission from 3% to 3.5%."
So, tell me, what can or should he do now? My friend wasn't consulted about the request for a commission increase. The RE agent didn't seem to be representing the buyers when she told the seller the buyers were essentially gaga about the property. If my friend was encouraged by his agent to offer over asking (I believe he was), then she is asking for more money for her commission, can he get the difference (it's about $3500). More broadly, what can he do to help police this behavior so other's aren't swindled as well?