Real Estate Agents Ethics
We are in the process of negotiating a Brownstone in Bedstuy and the process recently came to a standstill. I’m getting a really sketchy vibe because of some of the things that have happened. It should be noted that the agent is acting as a dual agent (which is our own fault i guess).. The…
We are in the process of negotiating a Brownstone in Bedstuy and the process recently came to a standstill. I’m getting a really sketchy vibe because of some of the things that have happened. It should be noted that the agent is acting as a dual agent (which is our own fault i guess).. The first thing was the fact that there were a bunch of things that showed up in the inspection that the RE Agent should have known about due to a previous inspection last year. Mainly about 80 grand in additional renovation costs. Then there were all sorts of renovation costs that he disputed, not because they weren’t valid, but because they would be able to be put off for a year or two. Examples are a 30 y.o. steam boiler that was providing both heat and hot water, plumbing, etc. Then when we put in a revised offer, he contacted our mortgage broker directly to ask him to run the loan at 10k higher, “just to show us that it would only constitute $50 more a month. The last straw was that we made an offer with a sellers concession, which he presented to the seller by tacking the concession on to our offer, making the offer about 35 grand more, despite numerous emails outlining this. Any one of these could be seen as an honest mistake, but the house has been on the market for a year and the RE agent seems a bit desperate to get it done with already. The last sticking point on the concession seems extra underhanded as it appears that he was hoping we wouldnt notice until we were in contract. Is this normal for NY real estate agents? Am I being sensitive? The kicker was that after all of this, he emails me to ask if he can send the inspection report we paid for on to another buyer. WTF?
I’m no RE lawyer but even if appoggiatura is right about the dual agent thing, no one really assumes it to be true for practical purposes. I agree with OP that the agent’s actions are fishy. Agent was trying to extract data from your mortgage broker to persuade you to pay more money. Agent was tweaking the bargain without authority from you, etc.
One thought, though — you are not entitled to a price reduction. It is merely a negotiating point, depending upon the market. Your ability to get the concession you want is dependent entirely on what someone else will pay for the house. Seller ought to factor into the equation that any other buyer is likely to demand the same concession, but it is not required.
That said, a lot of good advice above. Good luck and report back.
And yes, it might be the best 850 we ever spent, but it still sucks to loose the money, when the findings were the same as the initial inspection (which the agent supplied to us) and the repairs were no less urgent. I guess I just wanted reassurance that this was sketchy action. I do think all this talk of other buyers might be a bluff, and we really do like the house despite of all this, so if we do hear back from these people in the near future it helps to know that all of this stuff is not kosher. I wasn’t aware that we could do the renegotiating through the lawyer and that is going to be super helpful if anything comes of it. Thanks everyone.
I think the red flag was that I heard that he had contacted my mortgage broker not from him beforehand, but from my mortgage broker when he wanted to confirm with me. I understand that it’s not the seller’s responsibility to fix things, but it does need to be factored into the price. I think i was just trying to give an overall background to the whole situation. The concession was the kicker, because not only does it seem like a weird way to present it (i.e. an offer that includes a concession is really that offer + 6%), and not only was i super explicit on what was in the offer and what the sellers take away would be, and not only did we have this problem on at least two occasions, but it also makes us look like jackasses to the seller which is super frustrating. It also looks like a convenient mistake that the agent hoped would slip through the lawyer. When we received the initial contracts on the offer, which we held off on signing until after the inspection, the same thing happened. The offer was the concession price, but without any concession. On the surface, it seems like all of this could be just mistakes, but it does seem a bit weird to “forget” all of this, take this quasi-bullying tone, and going behind our back to “show us the way”. It all just seems a little sketchy. It sucks, because I initially had a good vibe about the guy and his bio indicates he’s a good guy (affordable housing work, green housing, etc.).
If there is only one agent involved (1. he represents the seller and 2. you have been dealing with him without using an agent of your own) then yes, he is acting as a dual agent, despite what slopefarm says. Sounds like he disclosed this to you, which I think is required by law.
But the funny thing is that even when there are two agents involved, they BOTH work in the interest of the seller as well, neither of them for the buyer. The exception is if you as a potential homebuyer have retained a buyer’s agent, in which you case you usually pay a flat fee for the work involved until a deal gets done. Very few 1st time buyers understand this, it seems.
Anyway, I would have burned rubber by now, and I would have laughed at the request to turn over the inspection report to another potential buyer. That’s incredibly unprofessional and was likely done to get you “worried” about another buyer getting your place. Why are you in a hurry now anyway? Prices are only going in one direction these days…It might just be the best $850 you ever spent…
I guess I don’t understand much of OP’s lament. Why is it such a red flag to contact the mortgage broker? It’s not as if he can commit you to a higher loan. Stupid, maybe, because anybody with a calculator could recalc-ed the payment in seconds.
What’s wrong with disputing renovation costs? You and I might (and probably will) have serious differences about what, when and how fixes need to be made, why shouldn’t the agent be “conservative?” He might legitimately feel your renovation plans are unrealistic or over-expensive. I guess it depends on his attitude, but iae, you don’t have to listen to him.
And why assume it’s the seller’s responsibility to fix things? That’s a negotiating point, not a given. One can buy a house “as-is”.
I suggest de-sensitizing yourself; the agent is not working for you.
Yeah, this whole thing has been a huge learning experience. We bought a place in Seattle, but NYC is a whole different beast. Oh well.
This is where your lawyer comes in.
1) Definitely (definitely) instruct your mortgage broker to work with you and your lawyer and not the Realtor.
2) Your lawyer can advise you on this, but if you’re still interested in the property go ahead and Pollyanna it and just “clarify” in writing, the “mistake” about the $35K.
3) You showed the inspection report to the Realtor? Way to show all your cards. He didn’t pay for it, he has no right to see it. Especially since he is *not* representing you. Which is fairly normal in NYC but takes some clarity on your part. If he wants to send it to another prospective buyer, what I’d say is “sure, no problem, we just need to be reimbursed for that $850 we spent on it. Then you can show it to whomever you want.” Pollyanna.
And … in general, Realtors have a lot of advice about how to go about thinking through expenses. Usually the advice boils down to “stop worrying and buy.” A Realtor is a salesperson. They sell things. They do not help you make wise financial decisions.
Don’t worry about the $850. Think of that $850 as an investment which could turn out to save you $50-80k, or more.
I had an inspection done on a building in November 07, cost me $1,500. The inspector found water in the walls, the rear wall buckling, facade issues in the front, etc. He found at least $250k worth of needed repairs. We negotiated and the seller wouldn’t budge. So we didn’t buy.
I consider the $1,500 inspection a worth wile expense. It saved me from buying a building that would have needed $250k of immediate renovations (and the building is still for sale).
Get a good attorney, have all communication go through your attorney, stand firm on your points, and don’t be afraid to walk away, sometimes that’s the best thing to do.
Good luck
I agree with Dave…