question about realestate broker's ethics

9 years ago

a friend of mine recently contacted a real estate co.
to list their home & much improved property.
over the past 5 years they have added fences,
built barns etc. place is now set up to pull up
& unload horses.

the real estate lady didn't list the property price
reflecting the improvements. she listed it at 25K less
that the owners wanted to list for. they've signed a
one year lease.

the next day, she brought a man out to see the
property. he brought his son. turns out...the man
was the real estate broker's husband...and his son..
her son. gig was up when kid called the man dad...
and the real estate lady mom.

from the conversation the owners had with the
real estate lady, she knew what they'd paid when
they bought the property & her husband's bid covered
that cost plus material cost of improvements.
(no labor costs) so his bid reflected the cost &
materials.

is this ethical? seems shady to me that she would
bring her husband to make a bid and try & hide from
sellers that this was her husband.
and that she listed the property for 25K less than
what they wanted it listed for...what's up with that?
and a one year contract?

are these three things kosher?
I don't know much of the selling side of homes/property
so I thought I'd tap into y'all's areas of expertise.
not my property, I don't have a dog in the fight...
just curious as to if this is common practices.

tia

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Comments (20)

Linda
9 years ago
completely unethical. Your friend needs to have that property withdrawn from her immediately. List with someone else!
DLM2000-GW
9 years ago
I completely agree with linda117 and would take it a step further - I'd report it to whatever the state regulatory agency is for realtors. This has to be challenged.
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C Marlin
9 years ago
I agree with other posters, but add, the owner/seller determines the list price.

The price should be current market value, which may or may not reflect owner's investment in the property.

What do you mean they signed a one year lease?
User
9 years ago
Unethical...but.....it's not realistic to think that any improvements to a property attain a 100% payback at resale. Most are lucky to get 50% of the cost of the project added in value to a home. In an area where a home is not like it's surroundings, overdoing the renovations leads to even worse return on the money spent. A million dollar house sometimes is only a 750K house if it's in the middle of rural nowheresville, and a 3M house if it's in the middle of an urban location with a good school district.
Linda
9 years ago
The agent has a duty to inform the homeowner if she has an interest in the property.

The seller has their own responsibility in this situation.

1. They werent happy with the price and signed the contract anyway?

2. They werent happy with a 1 year commitment and signed the contract anyway?

3. Did they interview a few agents to get a few prices and terms?

4.. They do not have to sell for any price they dont want to, however, this could get really sticky, since if the agent offers a full price offer, technically, she could force them to sell it.

In this situation, i dont think she would ever win that because it seems very underhanded but it is just more aggravation than it should be.

She needs to at least call an appraiser immediately to find out the real value of this property. Perhaps the agent is offering fair market value. If she isnt, the seller needs to know!
energy_rater_la
Original Author
9 years ago
they did sign a one year contract with the broker.
I'm noit sure why....

this is horse country, the land was just empty
land with brush & trees. they've built barns,
a small house, fences, shedrows for the horses
etc. stuff that makes it attractive to other horse
people.

this is a small town, so they went with the broker
who has experience with these type properties,
the other broker is more house oriented, not
horse farn savy at all.

I did see their property listed on zillow.

to what agency would one report the unethical
behavior of the broker?

tia.
User
9 years ago
"They do not have to sell for any price they dont want to, however, this could get really sticky, since if the agent offers a full price offer, technically, she could force them to sell it."

Not correct.
rrah
9 years ago
Most states have an agency that issues a real estate license. Start with that. Which agency is different in every state. I would also recommend you friend IMMEDIATELY call the owner/broker of the company (if it's not this woman).
Linda
9 years ago
Salti dawg, this is a forum. Stating, "not correct" doesn't mean a thing to anyone without explanation or more info.

It's called "specific performance ". The seller has a contract to sell for a specific price. They can be held to that if pushed. I did,however, state in this case, it would probably not be enforced because something seems underhanded.

I will further clarify that there are many states and many laws that vary. I don't know where the OP is located. My comment simply stated "she could". Of course it depends on the laws of that particular state.
christopherh
9 years ago
Actually, no broker can force the homeowner to sell even if a full price offer is made. In most states the broker would sue for the commission as s/he fulfilled their part of the contract.

And the contract must have the price that the seller agreed to and signed. If the seller signed the contract with 25K less than they wanted, why did s/he sign it?

On the other hand, if the broker is listing the property for 25K less than the agreed price in the contract, she is automatically voiding the contract.
energy_rater_la
Original Author
9 years ago
"Actually, no broker can force the homeowner to sell even if a full price offer is made. "

that is true? seems to me the ho would have final say on to
whom they sell to...but I wasn't really sure if legally it was so.

I'll get more details next week from the owners.

and linda...this is Louisiana fwiw.

to what agency would one report the unethical
behavior of the broker?
sylviatexas1
9 years ago
Google "(name of state) real estate commission".

Homeowner can get other broker price opinions/market analyses to find out if the list price is indeed too low.
dreamgarden
9 years ago
I wonder what the OP (and/or their friend) decided to do?
Clara123
9 years ago
This is completely unethical I say. And I agree with what Linda says. Your friend need to get the property withdrawn from her immediately. Or she can talk to the principal broker in the same firm. This is happening in most places, especially because of the ones who are not qualified for a real estate license. People need to attend seminars, events related to real estate if they consider to develop their career in that field so that they will never do anything unethical. I think Richard Robins in Ontario are good in conducting such real estate related seminars. Between, are you sure the broker has got a license? I donÃ¢ÂÂt know what can be done in your friendÃ¢ÂÂs case, what has she decided?
User
9 years ago
Board of realtors in your area.
C Marlin
9 years ago
All this is second hand information.
Who knows what really happened?
ncrealestateguy
9 years ago
Definitely more to this story than we know from the OP, IMO.
energy_rater_la
Original Author
9 years ago
you are right. ncrealestateguy.

it was all a big hoax to find out to contact
board of realtors.
great attitude btw.

my nieghbors aren't selling, they've
decided to stay on.

realtor is no longer handeling these
types of property.

thanks to those who provided
the info needed.
dreamgarden
9 years ago
Thanks to the OP for letting us know what happened.
ncrealestateguy
9 years ago
Energy...
Were the sellers at home walking around with the buyers during the showing?
You say the agent told the buyer how much the sellers bought the place for, but the buyers could have easily obtained this info, as it is public knowledge.
You ask if taking a one year listing contract is unethical... No, it is not.
You ask if it is unethical that she listed it at $25000 less than what they wanted to list it at... no, it is not. Somewhere along the line, they both agreed that this would be the listing price, and this is spelled out in the listing agreement that both parties signed.
IF the agent tried to deceive the sellers of the actual market value of someone's home only to swoop in and have her husband purchase it, then yes, this is unethical.
And now they do not want to sell at all... that's a little strange.
And how do you know that the agent is no longer selling this type of property? The RE Commission does not punish a license holder by allowing them to sell anything except horse farms.
I have been doing this for a while now and am getting pretty good at knowing when stories do not quite add up. Especially second hand stories.
It's not that I don't believe YOUR story, it's that I think your neighbors are not telling you the entire story. That's all.

question about realestate broker's ethics

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Linda

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