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Eagle Realty Complaint - Ethics and Real Estate

Review by JPG on 2008-04-14
ST. PAUL, MINNESOTA -- My wife and I had put an offer of 215K on a home in Metro-area suburb. The listing agent had told our agent that there were no offers currently on the home. After we submitted our offer, the listing agent called back later in the day to say the house had been, sold. She had shopped our offer to anyone that looked at the home, and didn't allow us a chance to match or go higher.

Our agent said he's never seen anything that deceptive before, and would no longer be showing his clients Eagle Realty homes. Look out for this company, and look out for agent [snip]!!
Comments:28 Replies - Latest reply on 2008-04-14
Posted by Hugh_Jorgen on 2008-04-14:
That makes no sense. As an agent gets paid a percentage of the selling price, it's in their best interests that the house sells for as much money as possible.
Posted by BMG on 2008-04-14:
Our agent told us the same thing. Eagle Reality is terrible and I will NEVER look at another house they are representing!
Posted by Principissa on 2008-04-14:
I agree with Hugh, they get paid on commission. The higher the selling price the more money they make. Just be glad you didn't get the house, if that agent was that shady I could only imagine what lengths they go through to hide any issues with the homes they sell.
Posted by FoggyOne on 2008-04-14:
But if Agency A is the listing agency and sells the house they don't share the commission. But if Agency B sells the house then Agency A only gets 1/2 the commission (or what ever is worked out). So if Agency A sells the house for $215,000 and get 6% they get $12,900 but if Agency B sells the house Agency A will only get $6,450. That is my understanding. Shady for sure.
Posted by Anonymous on 2008-04-14:
What are you people even talking about??? I find it hard to believe that any listing agent would report a house sold in todays market that was not sold. Do you think that just maybe someone else submitted a contract before the poster did???
Posted by Slimjim on 2008-04-14:
I think what the poster is saying happened here is they submitted an offer to the listing agent. The listing agent took the offer and presented it to other potential buyers of theirs that they had shown it to, as well as I assume, the seller. The listing agent comes out far ahead if they sell the home to one of their own clients, as all commission is theirs. What then seemed to happen is the poster's offer was used to bait other prospects into making bids, yet because the poster was not a client of the listing agency, they were never given a chance to counter offer. By knocking them out of the bidding, Eagle made substantially more money in commission than would have been obtained by splitting the sale with poster's agency, even at a slightly higher sell price.
Yes, that was a bit unethical and moreover an industry frowned upon move, and can lead to other Realtors refusing to show Eagle listed homes in the future.
Booooooooo!
Posted by Principissa on 2008-04-14:
Dealer, it most certainly could have been under contract. We just bought our first home in December, and as soon as we signed the paper for our offer the house became under contract. If it was under contract they should have been notified by the listing agent that the house was under contract and that even though they submitted an offer it may not be accepted that way they wouldn't have wasted their time on a house they may or may not get. However I agree with Slim. I think that the realtor used their offer to bait others, clients of Eagle realty into making similar higher offers without informing the clients of the other realtor so they could counter offer. It was bad business plain and simple.
Posted by Anonymous on 2008-04-14:
Princi, true but you have know idea how much time elapsed from the time the buyers agent called the listing agent and when the actual contract to purchase was submitted. It is also at the sellers discretion to accept, deny, or counter any offer.
Posted by Principissa on 2008-04-14:
True indeed dealer. If the house had gone under contract within minutes of the offer, which is a completely plausible scenario, then I really see no wrong doing. Even still, the realtor should have told them when they made the offer that there was an offer made on the house already and it may go under contract.
When we bought our house we had an all out bidding war with the people who were selling it. It ended after 4 days. It was four days of non-stop phone calls, sleepless nights, stress, and fights. When I say we won't be moving for 30 years, we won't be moving for 30 years. :)
Posted by Anonymous on 2008-04-14:
Desperation, meet Greed.

There is a reason for everything. We have a very depressed housing market. A similar house may have sold for 260K. Sometimes realtors work in cahoots with speculators (gee). A genuine, potential buyer makes an initial offer of 215K on the house and expects to offer up to 225K and thereby get a bargain. The shady realtor, has knowledge of or is holding an offer of 220K. The realtor goes to the seller and 'advises' them to "Take the 220K offer, the only other one I've gotten is 215K. The desperate seller leaps for the 220K. Later, the buyer 'flips' the property for $250K (perhaps using the same agent). In a depressed market, 25K is a nice sum. The agent gets 1/2 of the full commission for the first sale, and 50% of the commission (rebating the other 50% to the seller under the table) on the second...why not play the game? There is risk in it for the buyer/flipper...but little real work.
Posted by Anonymous on 2008-04-14:
Ghost, you have never flipped a house before in your life. If you had, then you would know that your scenerio does not work
Posted by Anonymous on 2008-04-14:
You are wrong dealer. My brother sat on a civil jury where a realtor did just this. Perhaps you should temper your assumptions. Perhaps your stars were based on number of comments, not accuracy of information. All best!
Posted by Anonymous on 2008-04-14:
By the by, dealer. I flipped two houses in the last ten years...using legal methods and making only a little money. I am always amused by the size of gonads on commentators when they know they can make accusations anonymously and with such venom...calm down dealer...it's just a forum.
Posted by Hugh_Jorgen on 2008-04-14:
Thanks Slimjim, your explanation makes perfect sense. I forgot about the commission being split.
Posted by Anonymous on 2008-04-14:
Your brother never sat in a jury of this case. First of all a listing agents obligation is to the seller, not buyer, and is to get the most for the property as possible. Other than discrimination for race, creed, or ethnicity, a realtor can advise a seller to accept any contract they desire. You proved the whole point (and don't even realize it), if the poster offered 215k and someone else offered 220k, which contract would you accept? As far as flipping goes, after you pay closing cost, realtor fees, and carrying cost there is no money in it for the investor. But hey, if you want to play investor, I have 7 houses right now that I will be happy to let go, just bring your checkbook.
Posted by Anonymous on 2008-04-14:
"Your brother never sat in a jury of this case." and "Ghost, you have never flipped a house before in your life."-Crystal Ball assumptions by dealerdirect

LOL, dealer. What did I have for breakfast?

"Other than discrimination for race, creed, or ethnicity, a realtor can advise a seller to accept any contract they desire." dealerdirect assumes dishonest realtors obey this requirement with diligence!

"First of all a listing agents obligation is to the seller, not buyer, and is to get the most for the property as possible." dealerdirect naively assumes the realtor will not set aside his duty to the seller to serve the interests of the realtor and his investor friend.

But wait...there's more! (Sounds like a late-night infomercial)

1) My brother did not sit on a jury 'of this case'. He sat on a jury regarding a similar case. Realtors don't always play by the rules, dealer.

2) The property could have sold for more than 220k, but the seller was improperly enticed to accept 220k (or even a close offer like 216k), as they relied on information supplied by the realtor that 'the only offer is a lower one at 215k. If the realtor fee (more accurately 'commission') is largely waived by the realtor and closing costs (which may have been shifted to the buyer 'in consideration for the seller accepting a low offer')...the investor can make enough 'cheap money' to make it worth their time.

You seem like a nice sort, dealer, but sometimes you appear to let your anger (and burning desire to be 'right') over-ride your logic.

And, no. Keep your seven houses. I did not do well on the two I flipped. Warm regards.
Posted by Anonymous on 2008-04-14:
Did I miss something??? Did I misread something??? The only assumptions here are the one's who are ready to hang the listing realtor because of why??? because the realtor actually accepted someone else's offer over the posters. Somebody show me where the listing agent did anything wrong.
Posted by JPG on 2008-04-14:
After getting some more info from my agent, he has a gut feeling that the sellers agent represented both parties, which is grounds for an "ethics complaint." However he states: "Probably still hard to make anything stick because most of the “evidence” is intangible, but still…"
Posted by Principissa on 2008-04-14:
I don't mean to sound dumb, but what exactly is "house flipping"?
Posted by Anonymous on 2008-04-14:
dealer...People (and the poster) were asking why a realtor would not return to the folks who made the 215k offer so they could make a counter-offer on the house. Many of the comments offered 'possible' scenarios as to why the realtor did not do so and merely told the poster, "It's been sold." Nobody is certain this realtor did anything wrong...it may have been any number of reasons. "Possible" does not mean 'certain' or even 'likely'. We come here to discuss and learn from each other...not to boost our egos in an effort to always be right. I know you see the point.
Posted by Anonymous on 2008-04-14:
JPG...that is EXACTLY what my possibility was considering. Sadly, it is hard to make it stick...due to plausable deniability by the realtor.

Princi...'flipping' is where one buys property at a low price, makes (or not) some improvements, and re-sells the property at a profit. The real estate market of 2000-2005 made 'flipping' to have reasonable investment potential if done honestly. It is riskier now, since property is declining in value, to attempt to flip property at a profit.
Posted by Anonymous on 2008-04-14:
The seller accepted a higher offer. What's with all the speculation. I agree with the "Did I miss something???". This seems pretty simple to me.
Posted by Anonymous on 2008-04-14:
Ghost, my point being is the listing agent has no obligation to counter offer anything. The offer of 215k could have been insulting to the seller. Now if the seller accepted a lower amount not acknowledging the 215k then you have a ethics issue.
Posted by moneybags on 2008-04-14:
OK....here goes. A buyers agent gets an offer Friday morning on a listing with no offers yet (offer #1). Seller is out of town. Another offer (offer #2) comes in on Sunday. Monday morning BOTH are presented to seller simutaniously - as a multiple offer scenario! No chance to counter offer to Offer #1. Seller accepts 2nd offer even though Offer #1 came in first. Alot depends on state law. Is this fair? NO! Ethical? Depends on state kaw! Legal? Depends on state law.
Posted by Anonymous on 2008-04-14:
Well, I can say I have direct experience with this. My daughter put her condo in NC up for sale last year. The first weekend, she had 5 offers. She chose the highest offer and made $15,000 for a condo she owned for 4 months. The realtor presented her all the offers at the same time and it didn't matter who was first. She wasn't flipping--simply moving to Boston. So I guess it happens all the time and, at least in that state, it was perfectly legal.
Posted by moneybags on 2008-04-14:
Same in Alabama! I'm a Realtor and it's still not fair to the buyer.
Posted by Anonymous on 2008-04-14:
No, moneybags, it isn't fair. But, sometimes people want to sell quickly and the highest bid from a qualified buyer speaks volumes. I would personally try to give everyone a fair chance, but not if I had to sacrifice a sure sale when I was short on time or needed the money.
Posted by Anonymous on 2008-04-14:
"Now if the seller accepted a lower amount not acknowledging the 215k then you have a ethics issue."
This is how I envisioned the potential in this case. See, my friend, we are not so far apart in our logic. I apologize if my ability to be clear misled you and caused our 'disagreement'.

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