I am in the process of buying a home. I found a house for purchase and even put a an offer in on it. Well our credit combined checked out good today and we were well on our way to purchasing our first home. The real estate agency requested a pre-cert today and while talking to our lender, the agent indicated that our offer which they accepted 2 days ago was not good enough. However they hadn't yet presented it to the sellers. For some unknown reason my lender disclosed an amount which was higher than our offer. He claims he was trying to be helpful. The agent took the inside information and rejected our first offer without offering it to the seller and then stated that they would only accept our counter offer which we hadn't presented. The agent also confirmed that there is a cash offer on the house in addition to ours as of today. Our offer was with an FHA loan. Long story short, unless we wanted to pay $5000 more than what the house was listed for, we would lose the house. We lost the house. Do we have any recourse? Any advice on this one? I feel like I was taken to the cleaners today and it seems very fishy to me.
Who's agent was talking to your lender? Were you using the selling agent? The lender said you were pre-certed for more than you were offering? Really need more information, and what state are you in?
The seller's agent was talking to our lender. We sat down with the seller's agent and wrote them an offer. They in turn requested for us to get pre-cert. The lender upon hearing that our offer would be rejected offered a pre-cert for a higher amount. I live in MI.
First of all, the agent has to present the offer to the seller. he does not have the right to accept it or reject it. You can complain to his broker about him. As to the house, if there was a higher offer nad it was accepted, then your only chance is to get them to accept your offer as a backup. Then, should the first contract fall through, then you'd be in first position. A contract is only valid when it's signed by both parties. Until that time it's only an offer and not binding.
So an agent cannot do that. Is that just frowned upon or is it actually illegal? So then what is my recourse? Who can I contact about this? And to clarify... There was an written offer signed by us and the seller's agent disclosing the terms. I have copies of it. We had a contract.
Hi Juice, The agent has no right to reject your offer. They're not the ones selling the house. Also when an offer is written up it MUST be presented ASAP to the seller. There is no reason for your agent wait two days before presenting an offer. In MI. as well as everywhere else in the country you have the right to be present when your offer is presented to the seller. You can include in your signed offer that 'Buyer reserves the right to be present when offer is made'......or wording to that effect. One thing you could do is call the board on this realtor. You can also ditch this realtor and work with a buyer's angent. If you have signed an agency agreement with this agent they will still be entitled to a percentage of the commission though. Hope things work out for you. Teejay
File a complaint with the Michigan Division of Real Estate, the agents licensing authority. Don't waste your time talking to the agents broker ...you will get the royal run around and nothing will come of it. Go straight to their licensing division. Try the link below...I think you should be able to submit your complaint online...also while you are there you can read up on a lot of disciplinary actions taken against Michigan agents. Good luck to you! http://www.michigan.gov/cis/0,1607,7-154-10557_14845---,00.html
Juice, Sorry to hear what happened. In TX (I know you're in MI) RE agent must present all offers, whether they know it will be rejected or not. I also think you may have a complaint with the lender. Why were they divulging confidential information? The only thing that should have been relayed to the agent is whether you could get approved or not. What you need to know now, for the future, is to get your own agent. The selling agent's first duty is to the seller. They have a fiduciary duty to a buyer, but will not necessarily look out for your best interests. (Why would they help you negotiate a lower price when their commission is based on the sales price?). Again, I am a RE agent in TX, and laws do vary. But here, any agent can act as a buyer's agent, its the contract you sign with them that is the driving factor in whom they represent. Technically, if I had a buyer that didn't want to sign a contract with me to work exclusively as a buyer's agent, then I became a sub-agent of the selling agent. Check with friends and neighbors that have bought homes, and see whom they recommend, then find an agent that you like, and sign a buyer's rep agreement. I have had them signed for as little as one day, to as long as 60 days. One nervous nilly only agreed to sign one on ONE particular house I was showing them. Good luck!
Okay, that's what I needed to know - whether or not they are obligated to present the offer. As far as the agent goes, I knew they were a seller's agent and I had already decided to go with a buyer's agent, I just didn't enlist one yet. The only reason I contacted the seller's agent was because they were also the listing agent and I needed to submit an offer on the house. I knew they weren't representing me. But I also didn't expect to be screwed by them either. And yes, I also do have a complaint with the lender.
Now, another question for you. Do you KNOW he didn't present the offer? Scenario - RE agent calls the seller, and says look I have an offer, for $xxx, but my good buddy at ABC Realty called me and is about to make an offer for $xxxx. Do you want me to bring this by, or wait it out for a couple of days and see if this other comes through? In MI, is there a time limit within the contract for acceptance or declination? Here, a seller can do nothing, and I have had to withdraw offers in writing, to protect my client, from the seller signing it somewhere down the road.
To my knowledge, per the conversation I had with the agent, they, being the agent, refused the offer before showing it to the seller and stated that I must offer the new offer. The broker had 2 days to obtain written acceptance of the offer.
Interesting. Thanks for the clarification! By all means, file a complaint with your state's governing board. Its agents like that, that give us honest guys a reputation thats just about one step below attorneys.
Juice, The realtor you're dealing with is a unscrupulous scum bag. People like this give realtor's a bad name. This realtor should have presented your offer asap. He/She has no right to reject an offer before it is presented to the seller. I suspect they received this cash offer sometime between when you wrote up your offer and the 48 hours the sellers had to answer your offer. The realtor is simply trying to drive up the price by telling you to offer 5k more. Some sellers (I can only speak for the Boston area) are very hesitant to accept an offer from someone who is FHA approved. Don't get me wrong their's nothing wrong with an FHA mortgage, it's just that they have some stringent inspection guidelines. The realtor could have been trying to make your offer look better than the cash offer by making yours significantly higher. Please report this realtor you your state board. As for the lender I would recommend getting a pre-approval letter for the maximum you are willing to spend. When your ready to make an offer get the lender to give you a new letter for exactly the $$ amount your mortgage would be if the seller accepts your offer. Tell your lender not to do you any more favors. By all means get a buyer's agent.. Good luck. EdG
Greatly appreciate your feedback. Should I tell the realtor that I am reporting them? I have yet to follow up with them beyond turning down the offer and requesting my good faith deposit back.
I wouldn't bother telling the realtor that you're reporting him/her. As far as your good faith deposit they should not have deposited the check into escrow unless you had an accepted offer. Ask for your check back. If they deposited it, they screwed up again. EdG
Its not only that, but an FHA mortgage requires the seller to pay more of the closing costs then a conventional loan. If you put an FHA against a conventional offer side by side, same offer price, the conventional is generally better. Appraisers in TX are very nervous about FHA appraisals because they are almost performing an inspection.
It's not that the FHA mortgage requires the seller to pay more of the closing costs. It's moreso that it allows the buyer to have the seller pay up to 6% as opposed to 3% with a conventional. The option is there for the buyer but it is not a requirement.
Hmmmm well it may have changed, or then again I could be completely wrong. I was aware of the option, but I swear there were still charges that the seller had to pay at closing, that was not necessarily so in a conventional mortgage.
Yes, to my knowledge, the FHA increases the amount of closing costs the buyer can request the seller to cover, but it does not mandate it.
