Ok guys, I want some opinions. I have a good friend who bid on a very nice (and very potentially profitable) piece of property. Within 12 hours she got approved for a mortgage, put in a bid, and even had a meeting with the current owners to do a walk through. It's credit related here: She was approved without contingency (meaning: she didn't have to sell her current house to get the new, very large mortgage). The other party's realtor was very odd and she actually said (before my friend had even seen the house) that she didn't want to take any other bids... she didn't want to get into a bidding war...and that there was a bid being faxed right then so don't bother getting excited about the property. My friend instead went Fri afternoon and looked at the house. The owners were there and they encouraged her to look. She told them she was interested... and asked if she could still bid. They eagerly said yes. She had a mortgage approval on that same day, Fri close of business (a 2 hour approval on a Friday). It was an approval, not a prequalification. Meaning: getting the mortgage was a done deal and the broker faxed and called the other agent telling her so and telling her that my friend would likely bid on the house Sat am...could they meet with the owners for a look again... On a 500k loan, I was amazed it was done so quickly My then made an appt Sat morning to look with the sellers and with her realtor. The sellers told her that they had NOT accepted an offer Fri and they encouraged her to look and to bid. She bid on Sat with her mortgage approval already done and with that clearly being communicated to the sellers realtor. BUT: The other agent told the sellers that my friend was contingent: meaning, they'd have to wait for her to sell her house to close. She wasn't. The sellers then accepted the other offer that also wasn't contingent. She went later that day (Sat) to look at the house again (the offer had just gone out) and she again talked with the sellers. She talked a few terms with them (and I was there as a witness) and my big mouth mentioned I'd never seen someone qualify for so much money (both mortgages) so fast and without contingency. The sellers looked stunned and they acted very oddly. they told us they didn't know she wasn't contingent on selling her current house... they didn't say they'd already accepted the other offer... but we wondered. We later found out they did accept the other offer and it's both our beliefs that they did so because of that misinformation. Keep in mind, the seller's realtor had already expressed an opposition to another offer not only to my friend, but also to her realtor (the sellers were ticked to learn that)... Now, she's the backup offer... and the other guy is first in line. Keep in mind, this is a "fixer upper" in one of the best neighborhoods in Atlanta. no homes in that area completely renovated go for under 800k. Meaning: if she spent 100k or so, she'd gain 250k in appreciation on that house... so this "error"... or purposeful omission may have cost her 250k. She is doing a wait and see for the next 10 days... after all, the inspection may scare the first guy and then she'd have the home of a lifetime... (well, in a year or so after remodeling).... but I'm really mad. (as an aside: the sellers had told us that "she'll really love living here" so it would have taken an outrageous offer to not get the deal (and the sellers actually admitted it was decided on "terms" not on "price"...) She put no terms. She was accepting it as is so the only potential difference was the time frame for closing... This seems VERY purposeful on the part of the realtor. Since it deals with the approval or not of a loan, I'm on the fringe of "credit" here... but, what do you think she should do if she doesn't get it? I know it's covered under "errors and omissions" insurance... but I honestly think the realtor did it purposefully and thus it's fraud... I also know that'd be almost impossible to prove... any suggestions?
Okay, now think... what did the realtor have to gain? Was he/she involved in the other deal. Real estate transactions are public records. Any way to see the paperwork at this point? My guess.... the realtor was in on the deal somehow the other buyer was a relative or friend why else would anyone take a chance like that. BTW E&O does not cover intentional acts. IF this was intentional it is "Take away the license" and he/she gets sued personally.
We actually asked the owners why the agent had such a predisposition against other offers... they had no clue and were irritated to say the least. She had said "I honor the first offer and I don't like bidding wars"... We think the atty who put the offer on the house is somehow related or is giving the realtor business or something... it seemed very fishy all along which is why my friend went directly to the sellers so often (she saw them Fri night, Sat am, Sat afternoon) because all of us were worried the seller's agent would miscommunicate the offer...the attitude wasn't even masked a bit. We asked the sellers if the lawyer wan't using a realtor and thus their agent would get 100 percent commission if he bought it but 50 percent if she bought it with her realtor... we were told no, he had another agent. We always thought there were oddities going on... but to communicate that she was contingent when she wasn't... that just seems so amazing that even I'm surprised (and after all the cra stuff I've seen, it takes a bit to surprise me about human nature now)...
There are 2 agents here but the atty's agent may be getting less than 50% of the commission. Your friends agent probably would have insisted on 50% in the offer made to the seller. I know nothing about Georgia law but the atty's offer may have expired within a day or less so the seller's accepted it immediately.
Well... we were told the atty's real estate agent was on full commission... and my friend's agent actually offered a reduced commission if that would make any difference in the deal. My friend was told by the sellers that there were no other "oddities" going on with regards to why their agent seemed preferential to the atty's offer... The whole thing felt strange from start to finish. My friend knew the odds were stacked against her because of the seller's agent... and I am wondering if that's also discrimination against women (ok, I'll say it b/c I've been thinking it for a while).
