Posted on 03/18/2024 8:40:46 AM PDT by where's_the_Outrage?
I call bullshit that realtors successfully sued anyone for not accepting an offer because after seeing offers, the seller decided they could get a better price by waiting. The listing agreement -in no way- obligates the seller to to accept an offer you bring him that meets the terms of the listing.
Your arguments sound line the exact reason the lawsuit and settlement happened... Suing the people you list for, “firing” sellers, etc.
“The other times the owners and I sat down and we negotiated me taking the house back, they were all happy I took the house back.”
In that negotiation you could even agree not to ding their credit as a sweetener.
Hopefully you dodged a bullet with what you identified as needing more inspection.
Maybe not only were you getting hosed by greedy realtors, they were going to slide something by you in inspections!
That's what we went for, when selling my wife's mom's home. Agent wanted 6%, we negotiated with him to agree to a lesser amount, 4-1/2%. Agent was smart, agreed to 4-1/2% unless he sold the home for $200K over asking price then he would get 6%. We had set the asking price, based on what similar homes were selling for in the neighborhood.
Agent did his job well, pulled in offers and dealing with the two top bidders to offer higher bids. Home sold for $250K over asking, which was more that enough to cover the entire 6% commission.
Well...that is not exactly correct.
Every listing contract to which I have ever been a party has contained exactly such terms. It appears to be a standard form in this State and several others.
If the seller receives a full-price unconditional offer they are obliged by listing contract to sell the property and the agent gets their commission once the sale is closed. A seller refusal is a distinct breach of contract, for which the agent may receive some kind of payment. A failure at closing may allow the seller to void the contract if the seller is not at fault for the failure to close. "Conditions" imposed from the buyer may also be grounds for seller refusal.
For residential sales, these terms are usually regulated by State laws and the listing contract may in fact be a required standard form.
"Your milage may very", depending on the State in which you are performing the sale.
In retrospect, I think it was more the Seller wanted as much money as possible. She was apparently known for not liking Buyers using an agent.
Yep, especially with housing costs so high and property selling so quickly in some markets. Does a real estate agent really earn a $30,000 commission on a house that sells the day after it’s listed? I know of at least one agency that has gone to flat fees of about half that.
Be careful of that bullshit. You just stepped in it.
Google has this to say.
If you turn down a full-price offer, you may still have to pay your agent, depending on the contract.
So, they get the same flat fee if they sell it the first day, or if they put in nine months of hard work?
You suggested that the seller realized they underpriced it?
How common is it for a lawsuit to come from turning down a full price offer?
One thing I definitely see is real estate agents encouraging clients to list a house too low. Presumably, they will take the loss of a small part of the commission, just to achieve it quickly.
On two occasions, I have heard sellers tell real estate agents that what they are suggesting as a listing price is too low. The agent tells them something like, that's fine, we'll list it at that price to provoke intertest, and we'll end up selling it for more.
flamberge , Responsibility2nd if the agent said something like that, will it impact the lawsuit? Because they are portraying the asking price as a strategy, and they don't say you will be required to take an offer at this price, no matter what the small print says.
Legal advice from the internet is generally worth what you pay for it. And I am not a lawyer.
Having said that, the short answer is "NO". I expect that the listing contract can be enforced as written, and the agent suggestion that the seller could hold out for more than the listed price is meaningless. Or worse, a deliberate deception. You must get these kinds of assurances written into a contract or they don't exist. But people sign bad contracts all the time based on wishful thinking and deception. It is a bad bet that the courts will get them off the hook.
And I would run, not walk, from an agent who suggested a "lowball price to provoke interest". There is nothing in the real-estate market that works that way. You would need very specific language in a contract to specify a minimum acceptable price, and a lower "bait price" for listing.
Most likely, this would be considered an unlawful and deceptive trade practice, depending on in which State the sale is located. Check with your lawyer if you want to stay out of jail.
What you could do is set up an auction with a specified minimum price and a time period in which the highest offer above that price will be accepted. That works in some markets. It fails in others.
What works in all markets is to set a highball price and then consider lower offers. There is always somebody who wants to play "Let's make a Deal".
Because the buyer attached some expensive conditions to the offer. (Put on a new roof, the old one is at end-of-life). It is not really a full-price offer when that happens, and the seller has an option to refuse the deal. Or make a counterproposal.
You suggested that the seller realized they underpriced it?
Maybe the seller did underprice the house. Too bad for them. But even very experienced real-estate professionals can make large mistakes estimating the value of a property. It is almost always better to close the deal and move on.
If the buyer adds those conditions, then it seems like it doesn't trigger that clause in the contract anyway.
I'm not talking about a mistake, I'm talking about listing low to get a quick sale.
That is simply what most real-estate agents tend to do. All of their incentives line up in that direction. Sometimes they overdo it. That is the mistake.
They screw up their own deals sometimes because it is really hard to estimate the market value of a property either for quick sale or for maximum price. Even the professionals have difficulties. The professionals win more often than they lose, but sometimes they lose big. Then they just move on to the next deal.
The amateurs (which is all the rest of us) do well if we can hit a target price without too much of a haircut on "conditions". We are too emotionally invested in "this deal" and the next one is probably 5-10 years down the road, so we don't remember very much of what we might learn.
I do not see this legal settlement changing much of anything except to improve the income of the lawyers who conducted it. The really big change has been the switch to online listing sites instead of the MLS book that was once accessible only through agents. Also, there are more real-estate agents than there are properties for sale.
The herd is being thinned. No wonder commission rates are "negotiable" these days.
I am unsure if I parse that sentence into what you meant to say.
I am quite sure that if a buyer adds conditions to an offer which are of any substantive and costly nature to the seller, then the offer is not considered a "full-price offer" and may be refused without penalty by the seller. At least in the States where I have bought or sold a residence.
BTDT.
Your State may have different regulations or laws about what is permitted in residential property sales contracts. And commercial property sales contracts have even different rules and limits. It may be wise to check with a real lawyer for definitive answers in a specific circumstance.
The original scenario which started this rant (seller refuses a full-price offer, agent sues and collects a commission on the prospective sale price) is absolutely possible and does happen rarely. The legal costs take up too much of the proceeds and time of the agent, so it is not usually worth pursuing.
I work for clients every day that combined have less than $35.00/hr income. And they get qualified. Usually by lenders working in concert with agents that purport to support their racial demographic. And they’re saddled with usurious interest rates twice that initially offered for a beater house that’s going to eat them alive in maintenance and repair costs. They’re not selling houses....they’re selling FOMO. Hopefully the next year or so, as well as the recent NAR settlement, will be a hard tug on the flush handle so the industry can return to some degree of normality.
Or, as I call it, the “Pound and Pray” method of real estate sales.
Most are out of their element once they sell a house to a sibling and a cousin or 2.
If a house takes 9 months to sell, it is way overpriced for the market.
“depending on the contract.”
LOL, sure sport. No sparky, even if a full price offer comes in, you do not, even if your vaunted google says so. Depending on the contract... lots of daylight there.
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