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redline 08-31-2006 08:22 AM

What would you do?
 
(Part 1 of a 2 part story )

If a person was in the market to sell their home and listed the house with a real estate agent. The real estate agent gave an appraisel of the property. The real estate agent offered to buy the house at the appraisel amount. The seller signed the offer. The house is sold (closes) and then the real estate agent sells the house to another individual in less than a week at a substanial higher amount.

What are your thoughts on the situation?

(I have already told the first sellers what they should do)

><(((jan(((D> 08-31-2006 01:55 PM

i dont know that the agent had the seller's best interets at hand. there's got to be some ethical code agents go by... thats kind of shady if she knew the house could sell for a higher price yet she bought the house at a lower price... were the seller's in a rush to sell?

but, when it comes down to it (and it sucks) but business is business. the sellers didn't have to sell it to her at the appraised price... if they had done their research and done their own comps, they should have realized that the price was skewed.

J187 08-31-2006 02:15 PM

I'm studying real estate and just about to take my state exam. Let's see, how many levels is this wrong on.

1. Salesperson fiduciary contractual duty
.......Must Give undivided loyalty - means cannot represent seller and buyer at same time. Would require the agent to use ANOTHER broker in order to complete the sale to him or herself.

Under Mass state law, Conflict of interest law - Must hold sellers interest at highest regard. Must act ethically and be honest and forthcoming.

Also under state law here, specific language states - seller may not represent any client while holding special interest, financial or other, in the property to be sold unless informing client in writing PRIOR to the listing agreement.

Also under mass law - automatic loss of license results from : An agent knowingly making a substantial misrepresentation to the client.
....Acted with more than one parties interests in mind without disclosure.



You could sneak in some other areas I guess it would fall under, but its pretty clear to see there is definitely cause for license revokation
and lawsuit.



What they should do first is contact the licensing board. If the board finds fault and suspends or revokes the agents license, that will be very useful in convincing the case in court should it go that far..

KUIPORNG 08-31-2006 02:36 PM

If you said the agent must use a different selling agent in order to buy the house from the owner.... I think this may not be ture... I saw agent buying direct from owner before. I also see one agent being both seller and buyer's agent before and been able to trim a bit on the commission.... I think the rule is not so strict here... and if the law really requires different buying and selling agents, this can be done by calling a buddy to represent him as a selling agent... so the law become useless...

I think this case is still agruable in court and judge has to look at all evidents and factors to make the call... but for sure, the owner should try to sue the agent for sure...

J187 08-31-2006 03:13 PM

Quote:

Originally Posted by KUI****G
If you said the agent must use a different selling agent in order to buy the house from the owner.... I think this may not be ture... I saw agent buying direct from owner before. I also see one agent being both seller and buyer's agent before and been able to trim a bit on the commission.... I think the rule is not so strict here... and if the law really requires different buying and selling agents, this can be done by calling a buddy to represent him as a selling agent... so the law become useless...

I think this case is still agruable in court and judge has to look at all evidents and factors to make the call... but for sure, the owner should try to sue the agent for sure...


First of all, the law is true, it may not exist in some states, but it does here.

You say you have seen agents buying directly from seller - are you certain these agents have signed a LISTING agreement with that seller before hand?

Mass allows dual agency, but requires full disclosure previous to listing agreement signing and requires signatures of seller, agent, broker AND buyer!.

The law is not useless at all. Not everyone has a buddy who is an agent willing to get involved. The key to what I said was it had to be a different broker, not agent. So you couldn't ask someone else in your office working under the same brokerage to do it. Also, if you do have a buddy whos an agent at another brokerage, you are now introducing a second brokerage into the deal, thus nullifying the savings of the commission to the agent whereas the third-party brokerage is entitled to split commissison even if the agent-buddy doesn't want it.

Mostly remember that I specified that I was in MAss and according to Mass law. Everywhere is different, some states - I think Kansas is one, doesn't allow dual agency at all. Either way ALL states have specific laws about freadulant misrepresentation and acting toward the best interest of the client in all of their contract-law.

KUIPORNG 08-31-2006 03:26 PM

yes the law in your state probably very different from what we have here in Toronto, in Toronto... my sister just sold her home to an agent... don't know how she cut the deal.. but I don't think they paid out commission to third parties like a regular deal... don't believe that... there is always ways to route around the law ... for this complicated segment...

J187 08-31-2006 04:18 PM

Right, but the important question is - Was the sale to an agent that she had also signed an agreement with to sell the property for her? Any agent can buy property in any state. But was the agent who bought your sister's house also the agent who agreed in contract to sell it>?

Oh, and yes, the laws are VERY different between the US and Canada. In MA, if you are caught peeing outside in an alley you can be put on a sex offender's list. In Montreal, prostitution is legal....

KUIPORNG 08-31-2006 04:26 PM

the problem is I probably will never find out the details as me and my sister is at a very difficult fight.... somthing like if I am somewhere, she and her family won't be and vice versa...

redline 09-01-2006 09:00 AM

Quote:

Originally Posted by J187
I'm studying real estate and just about to take my state exam. Let's see, how many levels is this wrong on.

1. Salesperson fiduciary contractual duty
.......Must Give undivided loyalty - means cannot represent seller and buyer at same time. Would require the agent to use ANOTHER broker in order to complete the sale to him or herself.

Under Mass state law, Conflict of interest law - Must hold sellers interest at highest regard. Must act ethically and be honest and forthcoming.

Also under state law here, specific language states - seller may not represent any client while holding special interest, financial or other, in the property to be sold unless informing client in writing PRIOR to the listing agreement.

Also under mass law - automatic loss of license results from : An agent knowingly making a substantial misrepresentation to the client.
....Acted with more than one parties interests in mind without disclosure.



You could sneak in some other areas I guess it would fall under, but its pretty clear to see there is definitely cause for license revokation
and lawsuit.



What they should do first is contact the licensing board. If the board finds fault and suspends or revokes the agents license, that will be very useful in convincing the case in court should it go that far..

It is wrong on many levels. The license should be removed and just compensation should be awarded.

The first buyer was not in a hurry to sell, just wanted a fair price.

J187 09-01-2006 03:40 PM

Quote:

Originally Posted by redline
It is wrong on many levels. The license should be removed and just compensation should be awarded.

The first buyer was not in a hurry to sell, just wanted a fair price.


Is this what you told the people?


Also, is there still a second part to the story?

slickshift 09-01-2006 08:41 PM

Quote:

Originally Posted by redline
...a person was in the market to sell their home
The real estate agent gave an appraisel
The real estate agent (bought the house)
The real estate agent sells the house to another individual in less than a week at a substanial higher amount.

What are your thoughts on the situation?

Unethical on the RE's part, perhaps against the law
But as far as I'm concerned, the seller sold and signed
There should be no recourse

I'd never go by the buyer's appraisal of real estate
That's a giant mistake on the seller's part
Sorry to sound cold, but what were they thinking?

Not Sure 09-01-2006 08:52 PM

And, what about part 2 of the story?

redline 09-10-2006 07:41 AM

Quote:

Originally Posted by slickshift (Post 17275)
But as far as I'm concerned, the seller sold and signed
There should be no recourse

I'd never go by the buyer's appraisal of real estate
That's a giant mistake on the seller's part
Sorry to sound cold, but what were they thinking?

If the real estate agent represents that the house is worth X amount but it is actually worth much more then X amount then is the real estate agent violating the fiduciary responsiblity to the their cleint(seller)?


If the real estate agent re-sold the house in less than a week without any improvements for $80,000 more, then did the real estate agent have the sellers "best interest at hand"?

joasis 09-10-2006 09:35 AM

The perception that a real estate agent is also an appraiser of fair value is wrong, no matter where you are. Oklahoma licenses appraisers, in addition to real estate agents. I notice on many shows like "Property Ladder" and "Flip This House" , the REA will tell the person doing the "flip" what the home should list for, based on "comps" or homes that are "comparable" to the property and have sold recently in that market area or locale. Lots of people are influenced by what they see, what their friends tell them, and generally mis-informed. Anytime anyone is considering a transaction involving large money (real estate), it would be well advised to spend a little money and seek a lawyer's opinion....


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